Change is coming: How livestock farmers can prepare for the challenges ahead

It’s fair to say that between Covid-19, Brexit and last year’s severe wet weather causing one of the worst harvests in decades, agriculture has faced the most challenging years in decades. As we go into a second national lockdown, we take a look at the impacts of the last lockdown, and how farmers can mitigate the challenges ahead.

With the second national lockdown looming on 5th November, it’s difficult to say what the impacts might be, but despite fears earlier in the year, it appears that agriculture was not hit as hard as expected in March.

For beef in particular, AHDB’s lead analyst for livestock Duncan Wyatt says: “After 2019 when prices were low for beef farmers and there was talk of a beef price crisis, beef prices have actually recovered during the pandemic. One thing that has been really interesting is that there has been a real focus on British meat in supermarkets. The food service sector tends to over index on imported meat, whereas retail is where British meat does particularly well in terms of its share.”

National Beef Association CEO Neil Shand agrees that while there was a “short sharp shock” in the last week of March and first two weeks of April, farm gate prices have more or less risen to a five-year high and are about “14 per cent of where we were last year”. Predominantly this has been driven by the closure of the food service sector, which relies more heavily on imported meat, driving demand to the supermarkets.

“Cattle numbers are tight at the moment and I don’t see anything other than demand for home grown British beef right to the end of the year,” he adds.

South Yorkshire pig farmer Stephen Thompson similarly reports that despite supplying around 50 restaurants before the first lockdown, local shop and supermarket sales rose when cafes and restaurants closed – and whilst the farm’s planned expansion did not take place, they have remained stable.

During the first lockdown, he says he joined up with an initiative called CityGrab that works with taxis to pick up and deliver takeaways. In the first two days of lockdown the initiative earned the farm £1,200. This dropped to a few hundred pounds a week once restrictions eased, but still provides extra income and was a “godsend” during lockdown.

Meanwhile, for beef and sheep farmer Rachael Madeley Davies, who farms in North Wales, facing current challenges has been about “controlling what you can control”, with a greater focus on costs and gathering data than ever before this year. “It’s a combination of two things – managing the uncertainty going ahead the best we can and utilising what we have got. Monitoring our stock performance has become more focused, as there are so many uncertainties and things out of our control.”

Other challenges

Speaking to farmers across the UK, the picture that emerges is that other challenges have been more impactful than Covid-19 – for egg producers, feed prices are rising and egg prices are low due to oversupply as a result of increased free range egg production. Contracts also meant many farmers did not benefit from the spike in egg sales during lockdown, explains Suffolk poultry and arable farmer Daniel Brown. To help mitigate this, Daniel’s farm has invested in a mill so they can produce their own chicken feed, which saves around £10-20/t. Whilst the farm drives down costs as much as possible, “it’s still not really enough,” he says.

For Powys dairy farmer Fraser Jones, unfair milk contracts and bovine TB remain the biggest challenges facing the sector. During lockdown the farm’s milk production was reduced by 3 per cent due to the oversupply, however Fraser says: “You’ve got to look at it as an industry whole; we all needed to play our part. For those who were having to throw milk away, I can’t even imagine what that must have been like. It must have been the most awful position to be in so it’s good that other farmers were doing things like reducing production to try and help.”

He adds: “There are always going to be challenges, that’s just something we’ve got to accept and move in whatever direction taken by the consumer. And we’ve got to adapt to that.”

Despite being overshadowed in the news of late, climate change of course remains another key issue for the industry, with the NFU aiming for the industry to reach net zero by 2040. Derbyshire dairy farmer Robert Thornhill says that one of the biggest challenges will be overturning the misconceptions about farming’s impact on the environment, as the industry has proved to be a “useful scapegoat”.

Deal or no deal

Brexit and concerns over future trade deals are, of course, another significant concern. With uncertainty over a deal ongoing, again, it is hard to predict what the impact may be, but Duncan Wyatt says that whatever happens, there is potential for logistical issues and trading with Europe may not be as straightforward as it once was. “I’d be thinking about making contingency plans for potentially not being able to move animals as quickly as normal,” he says.

Whilst farmers will have been preparing for Brexit for some time, Duncan says it is worth talking to processors, as “communication is going to be really key at this point”. Potential hold ups at the port could have a concertina effect down the supply chain and abattoirs may not be able to take animals as regularly before, which is likely to impact some species, such as sows, more significantly, he explains.

With feed prices going up, there will be a challenge regardless, Duncan says. In the case of a no-deal Brexit, farm gate prices for pork and beef will likely rise, but sheep farmers are known to be vulnerable to a no-deal scenario. Whilst it is impossible to predict, AHDB analysis and forecasting is hopeful of a deal, however.

Another key challenge will be how the industry transitions from direct subsidies to ‘public money for public goods’. This, Duncan says, will come down to cost management and providing a product that consumers want.

Ainsley Baker, of Kite Consulting, similarly underlines the importance of consumer demand and “positive messaging from our industry to consumers on the work that farmers are doing to reduce the carbon footprint of dairy and beef products, the improvements they’re making on animal health and welfare, improving biodiversity of the land that they manage, reducing plastic use and the health benefits of what they produce.”

For more advice on planning for the future, read the AHDB ‘Preparing for Change’ report: https://ahdb.org.uk/knowledge-library/horizon-preparing-for-change-the-characteristics-of-top-performing-farms