Brian Henderson: Taking the biscuit, the whisky and the chips

Last week, it flagged up that the price of one of Britain’s favourite biccies – which Wikipedia describes as a 'flapjack-biscuit hybrid', first launched in 1985 – would, along with many other sweet treats and other foodstuffs, have to rise in the New Year after big manufacturers had been doing us all the favour of absorbing higher costs in the run up to Christmas.

But rather than simply let this crumb of misinformation stick in our throat like a hastily devoured bite, let’s instead take a quick look at the maths before we hold our hands up admit responsibility for fuelling inflation in the nation’s daily ration.

Currently retailing at around £1 for a 300g pack, that means Hobnobs on the supermarket shelves are selling for around £3333 per tonne.

Looking at the ingredients list we find that Hobnobs contain: rolled oats (40%), wholemeal wheat flour (24%), vegetable oil (palm), sugar, partially inverted sugar syrup, raising agents (sodium bicarbonate, ammonium bicarbonate) and salt.

So, wheat flour accounts for around 24% of the product – so there will be around 240kg of wheat in each tonne. Even if you put biscuit grade wheat at £250 a tonne, that’s roughly around £60 worth of wheat in every tonne of biscuits, leaving £3273 for all the other ingredients, packaging, processing, baking, transport, depreciation, capital outlay – and probably greatest of all, advertising.

Or, putting it in per biscuit terms, with a nominal 20 biscuits in every 300g pack (well, somebody had to do the research…) the average Hobnob weighs in at around 15g and costs 5p.

By my calculation, then, 66,666 Hobnobs will contain around £60 worth of wheat – and making the maths as rough as the whole-grain texture of these cookies, that means there’s less than 0.1p worth of wheat in every biscuit – which works out at less than 2% of the overall cost of having something decent to dunk in your tea.

So, to lay even a portion of the blame on what is pretty close to a negligible cost in these fly-cuppa treats seems to take a bit of a nerve.

Interestingly enough, though, for a biscuit which is marketed on its 'oatiness' the price of oats – the majority of which would have been sold at a price well below the current recent highs seen for wheat – never even got a mention.

So, no need to hang your head in shame when the Hogmanay ‘Zoom’ celebrations get round to the inevitable discussions on the price of life’s staples.

But, while we’re on the subject t of Hogmanay (and life’s staples), some similarly ‘rough guide’ figures on the costs and benefits of the grain which we grow going for distilling have been produced across the course of the year – and in terms of hard cash, they outline what the farmer gets and what ends up in the pocket of the exchequer.

In his well-received address to the NFUS’s autumn conference, Berwickshire grower, Neil White, highlighted some of the figures which he had impressed upon rural affairs secretary, Mairi Gougeon, when she had visited his farm earlier in the year to get the low down on the arable side of the job.

He had pointed out to the cabinet secretary that 1kg of distilled wheat provided a possible £4.50 in duty and tax to Government, while he received around 20p for all his efforts – adding that this was at the cost of less than 1p in the form of support from the taxpayer.

So, at a return rate of more than 400:1 (or, putting it another way, 40,000%), that represents excellent value for money, whichever way you look at it.

Just before the COP26 conference in Glasgow, NFUS president Martin Kennedy took to the internet to deliver a personal video message which, amongst other things, pointed to the earning potential which the arable sector of Scottish agriculture provided for the Government.

We probably shouldn’t be surprised but there was once again a focus on whisky. Martin calculated that every tonne of malting barley grown in Scotland could produce somewhere in the region of 1300 standard 70cl bottles of whisky – and even after allowing a generous loss of 300 bottles for the Angels' Share he stated that this left at least 1000 bottles available for sale from each tonne.

He estimated that with Government getting its hands on around £10.50 from each bottle, a three tonne to the acre crop over 100 acres could see almost £3.2m contributed to the Treasury’s coffers. Yet, the support paid to the farmer for the same area was considerably less than £8000 – rather neatly confirming that the return rate on the tax-payer’s investment in the sector was more than 400:1.

It’s also reassuring to realise that as we crack open a bottle to celebrate as the Bells (other whisky brands are available!) approach – albeit in reduced, socially distanced numbers – that we’re doing our own bit for the country and ensuring a true circular economy.

But as we look beyond those self-same bells and look forward to getting to grips with the shiny brand New Year of 2022, there’s no getting away from the fact that there will be more than a few challenges to address as the year progresses.

While we’ve probably heard enough about the big threat of spiralling fertiliser costs and the knock on consequences this is likely to have on our bottom line, it’s not going to be the only area in which inflation rears what has in recent times become a bit of a largely forgotten – if still ugly – head.

As Andersons farm consultants pointed out recently, while we’re probably all preparing ourselves for the return of inflation across many of our variable costs, including sprays as well as fertilisers, it’s a big mistake to let slightly higher commodity prices blind us to the dangers of rising fixed costs.

Machinery price inflation has been another scarily stark statistic over the past year – with the cost of steel and other components rising sharply, while a world-wide shortage of many of the important widgets, microchips and other key electronic components have caused long waiting lists for everything from entire tractors and combines all the way down to the most modest of spares which we need to keep even the oldest of machines going.

Speaking to a sales manager of one of the country’s big machinery dealerships recently it looks like it’ll be a close run thing to get a lot of next year’s big buy items – like new combines or tattie harvesters – manufactured and delivered before they’re needed next autumn.

However, even if the shiny new equipment does arrive in time, it would appear that some of the more old-fashioned skills which have somewhat gone out of fashion in recent year might be needed to guide it around the fields –for GPS and auto-steer units seem to be suffering particularly badly from the lack of micro-chips and other key pieces of circuitry.

It’s been a phenomenon of recent years which has been particularly noticeable in the tattie sector, where a whole fleet of tractors often descend at the one time to get a field planted up – and then the same at harvest time.

Whereas in years gone by it would be the most experienced tractor driver with hundreds of acres of practice under his belt who would draw up the first drills as a field was being set up. But, in more recent times, it’s often been the youngest member of the team, only recently weaned off his Nintendo or X-Box who have the dextrous skills to twirl the dials to input the required information into the GPS system that allows the on-board computer take the strain of producing inch-perfect dreels.

But, regardless of the bells and whistles which are fitted to new equipment, while there’s been something like a 70% increase in the price of items like tractors over the past 10 years, the current shortage of supply has not only pushed the price of new units up by a further 10, 20 or even 30% over the past year, but it is also having a dramatic effect on the second hand sector.

Again this market is also seeing a drop in the availability of machines as well because people aren’t turning over their machines as they can’t get hold of the new ones. This is happening just at the same time as demand for the few which do come onto the market has grown substantially – those who can’t get hold of new machines finding themselves competing in the ‘almost new’ end of the market just to make sure they have the equipment to do the job!

All of this leaves me wondering that if we round 2021’s arable pages off by writing about biscuits, whisky and chips, just where exactly 2022 will take us?

But whatever it holds, all the very best for the New Year.