Retail giants need to waken up

That is the reality they will be facing in the near future. Three months ago, when this column predicted 20% inflation for agriculture and the Bank of England suggested it would be 2%, I wondered in what world these so-called experts, were living!

Now, the Bank of England, having awakened, is predicting 7%. The last time we had inflation on this scale, was back at the end of the 1970s and early ‘80s and what did Mrs. Thatcher do to curb inflation? She raised interest rates to almost 20%!

There’s a whole generation now in business who have only known interest rates in single figures, with even as low as 0.25%. There are many of my generation still alive who can remember paying in excess of 20% on our overdrafts.

If that were to happen today to curb inflation, half of farmers would be out of business pretty quickly! Let’s not forget that history has a nasty habit of repeating itself!

I can well remember back then when 19 farmers in the North-east went out of business (as it reported in this publication). Let’s hope that does not happen again.

Read more: Jim Brown: Inflation will be farming's next cross to bear

So, how do we prevent it? For a long time I’ve been saying that food is too cheap. Well, the boss at Tesco confirmed that on TV last week, maintaining that only 9% of household income was spent on food, compared to double that figure 50 years ago.

This leads me back to beef which plays a large part of our diets in one form or another. For the past 20 years, I have been doing a very crude survey of the price of beef in a handful of supermarkets.

The last one was in April when I published the figures which confirmed that beef prices had hardly risen over the past 10 years, and little change from the previous 10 years. I compared the following cuts in Asda, Aldi, Sainsbury, Morrisons and M and S – fillet, sirloin, rib-eye and mince, in the past 10 days.

With all the talk of food inflation, what was the difference? All steaks were Scotch assured – sirloin, £17.60 per kg last April, £17.58 last week; rib-eye, £18.90, now £21.37; fillet, £25.24, now £32.29; mince, £7.56, now £6.93.

At the top end of the scale Marks and Spencer, last April had sirloin at £21.50, last week, £34; rib-eye, £21 now £23; fillet, £40, the same. Aberdeen-Angus Fillet at M and S was £50 and mince was £7.75 last April and now £9.50.

If I take the average across Aldi, Asda, Tesco and M and S, it comes to plus £2.06 per kg since April, 2021, which was the same as 10 years ago. My conclusion from my crude survey is clear that over the past 10 years beef has had little effect on food inflation. Since April, 2021, it has gone up by an average of £2.06p per kg for the four supermarkets.

This begs the question, who is in control of food production? With the UK having the highest density of supermarkets per head of population in the world, I’m afraid the answer lies at the door of the big retailers and their policy of continually squeezing the supplier who, in turn, squeezes the primary producer.

There is only time when this changes and that’s when there is a shortage of product. In my lifetime there has only been three occasions when I can recall serious shortages that led to farmers making some real money.

First was 1976, due to drought potatoes reaching previously unheard of values; 1984 when the EU introduced milk quotas, in which I played a part, when milk rose by 5p/litre overnight and feed costs for Gold Label cake dropped by £60 per tonne.

We made money milking cows to the extent that we concreted the whole farm yard. The third occasion was in 2013, when we had ‘Horse Gate’ and beef returns hit levels that no one living had ever experienced with 424p/kg being the highest I had ever received. Barley was £80 per tonne and stock-feed tatties £5.

None of us have a clue as to what the future holds for the beef sector – or any other sector for that matter. The cost of fertiliser will dictate the outcome and it appears that a dictator called Putin is in control.

The world, and particularly the west, have been duped by this Russian leader who wants to recreate the Soviet Union, helped by our dumb politicians who do not want to extract the billions of barrels of oil and gas in the North Sea off the shores of Scotland.

As for the clown in No 10, one would think he had slept in his shirt! His untidiness is a disgrace and an embarrassment and he looks totally out of kilter alongside other world leaders.

Back to beef. It appears the Scottish premium has gone for the foreseeable future, with the line for premium beef moved half way down England, or maybe to Northern Ireland. Historically, there had been just a trickle of cattle moving south for slaughter – that has increased significantly recently.

This means that there is a larger customer base for quality beef, and it is not only in the prime sector. Just take note of the ever increasing number of quality store cattle going south for finishing which I assume will no longer carry the Scottish label.

Historically, England was our largest export market and will be for as long as we produce beef. What is not helping is the increasing political viciousness between Scotland and Westminster.

All my life there has been friendly banter, none more so than on the rugby field this past week. It worries me when I hear that there is a reluctance to Scotch beef in England that is linked to this vicious political world that has emerged in recent times.

The following beef stats cover the average paid in Scotland, excluding any breed premium, from 2012.

All pence per kg

• 2012 354.6
• 2013 399.3
• 2014 359.8
• 2015 360.5
• 2016 351.1
• 2017 372.9
• 2018 373.1
• 2019 339-6
• 2020 363.4
• 2021 406.1

I have to congratulate Emma Harper MSP on getting her Bill through parliament on increased fines for livestock worrying. If you farm in the industrial belt, it is a continuous threat and it is horrible to see sheep torn apart by dogs out of control. It is a much needed change in the law.

Sorry to hear of another good lass that this publication is about to lose. Claire Taylor is off to pastures new for a change of experience.

I do not know her parents, but many of my generation, in the dairy industry will remember her grandfather, Dr Malcolm Castle. For a long time he was head of the Hannah Dairy Institute, at Ayr, where he did lots of work on cow nutrition, long before anyone thought about it!

I recall a visit to the Hannah where he had tanks fitted to cows, measuring rumen function and what reactions different diets had on dairy cows. He enthralled many with his theories on how cows functioned.

Claire has certainly inherited some of her grandfather’s genes. I wish her well in broadening her knowledge.

Now to beleaguered QMS. I am not sure whether or not I should welcome Sarah Millar to what appears to be a poisoned chalice. She certainly has a challenge ahead.

Last time I suggested QMS returned to its core principles of promotion and marketing. If you do not know what marketing means, do as I did and take a course at Cranfield University, in London, when I was chairman of the Scottish Dairy Council.

Alan Wiseman was my vice-chairman and as a team we worked well. We had two of a staff and hired outside bodies to tender for every promotion, advertising and marketing required.

Maybe QMS should study how the dairy council worked. Is there a case for a merger with James Withers' Scotland Food and Drink? We certainly need the levy spent more wisely, otherwise, he who pays the piper might start to call the tune.

Finally, my snowdrops are nodding and daffodils are pushing out of the grass (ready for a first cut) and we are only mid-way through February! The days are lengthening and I am still alive – which is a bonus.