‘The beck is blocked.’

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Now things are starting to unravel at speed. Looking at livestock, which is what I know best, sheep prices have tanked. In simple terms because like us the French and the rest of our customers are locked down, they’re not dining out and the amount of lamb they’re eating has dropped.

Beef is the same. Butchers are struggling to shift the better hindquarter cuts, the steaks and roasts. This is because a lot of people eat them, but they eat them in carveries and other catering outlets.

Milk is in deep trouble. The big hit comes from Costa and the other cafes closing. In this town, one not especially large coffee shop used 50 litres of (cows’) milk a day. I know some of their customers and contacted some of them. They’re drinking the same amount of coffee but they’re not having the number of lattes they used to.

Obviously there are other factors causing the dislocation, people with stockpiles of milk in their freezer, people who cannot get out to buy milk, and all these things are bouncing off each other making things worse.

The spot price for milk was running at 30p a litre before places like Costa were closed. It then dropped sharply to 15ppl. I heard today prices at 5ppl and 10ppl. Apparently skimmed milk powder and skimmed milk are being poured into anaerobic digesters.

To quote Ian Potter, who knows a fair bit more about this side of things than I do,

 

“Processors cash flow budgets have been blown up and whilst some are clearly very worried over long term farm supply base, they either take mitigation steps in conjunction with their farmers or risk shutting up shop. Most liquid processors Ian has spoken to are having to ditch the code one-month price movement notice period and review the situation almost on a daily basis with several stating “I am working to avoid the Freshways approach”. For sure, sadly some businesses will be casualties.”

 

” This will have very serious long-term consequences and it is starting to feel very painful and time to buckle up and sadly for some it won’t be a case of can I find a new milk purchaser, more can I find a buyer for my cows.”

 

Another issue is that apparently a lot of companies are talking about ‘delaying payment’.

Now I know I’ve got a lot of non-farmers reading this. But ‘milk cheque day’ is sacrosanct. Dairy farmers get paid for their milk a month in arrears. So you’ll get you cheque for March about the 18th of April. (Depends on weekends etc.)All companies seem to stick with the same day they inherited from the Milk Marketing Board. This is one of the underpinnings of the industry. A lot of supply companies try to send the bill out, not at the month end, but so it lands on the kitchen table the day before the milk cheque. Also a large proportion of dairy farmers will have a lot of standing orders/payments which go out two or three days after ‘milk cheque day’. This can take anywhere from 25% upwards of the milk cheque. So if the company delays payment the farmer has to contact finance companies and others to frantically delay payments or get an unapproved extra overdraft. But for a lot of tenants, the overdraft is fixed at twice the milk cheque. So if the price of milk falls, so does the overdraft the bank is willing to lend. This is known as lending you an umbrella but taking it away when it starts to rain. A lot of dairy farmers could be in trouble very rapidly. For some the midden could hit the windmill about the middle of this month.

 

Now what’s the issue? In reality the problem isn’t the virus as such. I’ve probably had it, my lady wife certainly has. The problem is the necessary steps taken to cope with the virus. I’m not knocking the shutdown. We have to keep the number of cases down to a level that the NHS can cope with. If you read the modelling, to cope with this virus without the sort of shutdown we’re experiencing we’d need to run with about 275 critical care beds per 100,000 population. Europe averages about 11.

And remember that you are advised to have 7 critical care nurses per ICU bed. So the Europe (in its geographical not political sense,) has about 600,000 appropriately trained nurses. To match the number of critical care beds we’d need to go through this illness without lockdown, we’d need something over 14 million intensive care nurses, properly trained. To put this in proportion, that’s pretty much like saying every man, woman and child in Norway and Sweden have to be intensive care nurses.

The problem is that our usual routes to market are blocked. It’s like the picture above where a stream was blocked. Food is building up at one side of the blockage, and eventually it’ll get short at the other side. But just as when the beck gets blocked, water does eventually find a way around. In a while the water finds its way round the obstacle and largely goes back into its old course.

Our problem is that the workarounds are going to be less good than the old route to market. If the price of hindquarter beef falls, are more consumers going to be tempted to cook it at home? Will they turn to lamb, or drink more milk in their tea?

The obvious solution is actually to get the beck unblocked as soon as possible, or we’re going to be left with a nasty muddy mess as everybody paddles about in the muck trying to sort things out.

♥♥♥♥

There again what do I know?
Wisdom now available in paperback or as an ebook!

 

As a reviewer commented, “This is the third collection of farmer Jim Webster’s anecdotes about his sheep, cattle and dogs. This one had added information on the Lake District’s World Heritage status. This largely depends upon the work of around 200 small family farms. Small may not always be beautiful but it can be jolly important. If you want to know the different skills needed by a sheep dog and a cow dog, or to hear tales of some of the old time travelling sales persons – read on! This is real life, Jim, but not as I know it.”

 

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24 thoughts on “‘The beck is blocked.’

  1. xantilor April 5, 2020 at 11:02 am Reply

    I think Sweden has the right idea. We need shops, bars and restaurants to re-open as soon as possible. The ramifications of the lockdown and its horrendous cost to each one of us are barely being discussed.

    • jwebster2 April 5, 2020 at 11:57 am Reply

      I can see how the Swedish model would work, but would the 1.5 million vulnerable people stay locked down whilst the rest of us carry on as usual?
      But I agree, the lockdown is not a long term answer to anything

  2. Doug Jacquier April 5, 2020 at 12:08 pm Reply

    Yes, I’ve read about the Swedish approach. https://www.stuff.co.nz/national/health/coronavirus/120805778/coronavirus-to-swedes-its-the-rest-of-the-world-engaging-in-a-reckless-experiment?fbclid=IwAR3k0Ku26hgkEq0JNCU0nk_v_LTBI46dE8zyEJNopG58Mz7obUKcMcj6dAc

    I contacted a Swedish friend of mine for his thoughts.

    “Thanks for the article! The “Swedish way” is getting some attention, and Swedes like to read about ourselves in international media . Our government relies very heavily on the national epidemiologist and the public health bureau, who relies heavily on research. Some lockdown procedures in other countries has been motivated more by signals than effectiveness if I read things correctly.
    However, we know very little about this virus, and it’s a moving target, so we’ll see what we learn from this. I’m sure there are some things we do better, and some things we should have done differently. And I’m certain that people will cherry pick certain data points to show that we did a terrible job. Your thoughts?”

    To which I replied:

    “There are no data points left in my brain to make the relevant calculations on this matter. However I predict the backlash is coming to the severe restrictions in Australia and it will not be pleasant. One irony about the Swedish approach is that it seems to be an intelligent choice to do what Tump has advocated unintelligently all along.”

    He responded:

    “That has struck me also, but I’m not telling.”

    • jwebster2 April 5, 2020 at 12:45 pm Reply

      thanks for that, very interesting

  3. xantilor April 5, 2020 at 12:11 pm Reply

    Well, if vulnerable people are given good support, and choose not to self-isolate, I’d say that’s their choice and should be respected. Just as we allow people to do dangerous sports, or travel to unsafe countries, or overeat to the point they become ill or disabled.

  4. Doug Jacquier April 5, 2020 at 12:16 pm Reply

    Except the choice they make to not self-isolate affects us all, unlike bungee jumping, trekking in Nepal or pigging out.

    • xantilor April 5, 2020 at 12:22 pm Reply

      Not really, since for the overwhelming majority Covid-19 is either trivial or no worse than flu. And I would argue that since diabetes type 2 now absorbs nearly 10% of the NHS’s resources, this entirely preventable condition DOES affect us all.

      • Doug Jacquier April 5, 2020 at 12:40 pm

        It does indeed, including the 4,500 plus Britons now dead. Never mind, probably deserved it.

  5. Eddy Winko April 5, 2020 at 12:50 pm Reply

    It does bring into question what will happen in future? Is the solution to go back to a smaller business model, be it a farm, a manufacturer, power generator or a coffee shop? Would having more localised services cushion the blow to society when things go wrong? Is the interdependency of everything on everting the biggest downfall of globalisation?
    I guess I’ll wait and see, but for now I’ll make cheese with my spare milk (but then I only have 10 litres) 🙂

    • jwebster2 April 5, 2020 at 1:57 pm Reply

      It is a difficult question. A lot of farmers were encouraged to diversify into tourism, retail or catering. A lot of them have been seriously hit by this because they’ve had to invest an awful lot of money as well. Certainly producing more things nearer home seems like a good idea

  6. M T McGuire April 5, 2020 at 2:26 pm Reply

    Thought provoking.

    Smaller more local suppliers has always struck me as a better idea. They are more nimble and able to react to events more quickly. This is especially true of they link themselves into partnerships with others. So they can act to greater challenges as a large group but still have the freedom to individually as best bits their particular part of the country.

    I hope they unblock the beck soon.

    Cheers

    MTM

    • jwebster2 April 5, 2020 at 4:15 pm Reply

      yes some of those who’re selling direct to the public are doing better. But unfortunately the regulatory hoops you have to jump through to sell milk direct to consumers are a nightmare 😦

      • M T McGuire April 5, 2020 at 7:52 pm

        Yeah. I can believe that.

      • M T McGuire April 5, 2020 at 7:52 pm

        Or so depends on where you live as well. Easier in Oxfordshire than where you are I’d guess.

      • jwebster2 April 6, 2020 at 5:19 am

        I learned this the tough way when I used to sell meat. I’ll sell a lamb, half a pig or an eighth of a bullock (jointed and ready wrapped to go straight into the freezer, with mince and everything)
        In this area there weren’t many people with freezers that could take that much meat, or many people whose weekly pay packet could stand that much money out in a lump

        But if I’d farmed thirty or forty miles east in the Kendal, Westmoreland area, I’d have had a lot bigger market and could have built it into a serious business

      • M T McGuire April 11, 2020 at 3:47 pm

        That’s a pisser. I can see how the taking it to farmers market becomes almost as much of the business, sometimes more, than the production of the meat.

      • jwebster2 April 11, 2020 at 5:03 pm

        It is. The problem with diversification is that the asset you’re really using when you diversify is your time. The big risk is that you give so much time to the new enterprise the other one suffers so much that you’re no better off.
        And the other problem is that your diversified enterprise is supposed to help pay your current costs, so you are going to struggle to pay an extra wage for staff to help run it all

      • M T McGuire April 12, 2020 at 3:47 pm

        Yeh. I can imagine … bit of a catch 22. 🥺

      • jwebster2 April 12, 2020 at 4:02 pm

        yes if you have the time and money to diversify you probably don’t need to 🙂
        The most popular form of diversification is the wife going out to work

      • M T McGuire April 12, 2020 at 6:54 pm

        I can believe that.

  7. Doug Jacquier April 5, 2020 at 6:51 pm Reply

    Jim, there are obvious differences between the UK and Australia but farmers getting the rough end of the pineapple sounds very familiar. I understand how restaurants, cafes etc closing has slashed the market for high end products but, from my observations here, it appears meat and dairy products are flying off the supermarket shelves and the displays of independent butchers. Any and all enlightenment appreciated.

    • jwebster2 April 5, 2020 at 7:46 pm Reply

      Based anecdotally local butchers doing quite well. Apparently corner shops and similar getting a boost because people are avoiding supermarkets (The queues to get in because of ‘social distancing’ are often phenomenal )
      (as an aside somebody told me supermarket wasn’t as cheap as it had been because no two for 1 offers or similar but I’m not been in one for over a week so cannot comment)
      Those farms offering veg boxes or delivery seem to be doing well.

  8. patriciaruthsusan April 6, 2020 at 9:47 am Reply

    Reblogged this on Musings on Life & Experience and commented:
    Problems caused by the Pandemic’s effects on the markets. Also, a book by Jim Webster involving cow dogs and sheepdog, the Lake District’s World Heritage status, and the work of small family farms.

  9. Jack Eason April 12, 2020 at 5:48 am Reply

    Reblogged this on Have We Had Help? and commented:
    More from our Jim

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