Boring about Pigs?

I kept a few pigs before the last foot and mouth outbreak. I used to buy a weaned litter or two and fatten them on a mix of spare milk and some 16% protein dairy feed. This is grossly inefficient but was quite profitable because I was having them killed at a local abattoir. Then they were cut up for me by an excellent local butcher who always bought a couple of them. Then the rest were sold direct to consumers (or very rarely the hotel trade). But the more who went to the consumer direct the better. They left a profit as opposed to just sort of covering their costs.

The problem is that the pig industry is really efficient. The major retailers got their teeth into it a lot of years ago and have bled the profit out of it. Back in 1971, loin with bone, was 77p a kilo. Now it is apparently £6.08 per kilo. But if we allow for inflation, it should be £11.13 a kilo.

Bleeding this sort of money out of an industry has knock on effects. The farmers producing the product have to get bigger and ‘more industrial’ and efficient. The abattoirs have to get more efficient and cut costs. Those in between who haul pigs or pork about have to get more efficient and cut costs. One part of that cutting cost is wages. Given the level of hygiene and welfare inspection we have in this country, designed to keep standards up, wages is one of the few areas where you can cut costs. Everybody in the chain, from the person who feeds the pigs through to the person who cuts them up for distribution, ends up being paid less. But if you import cheap labour, it’s possible to push down the wages of your fellow citizens. But it’s worth it, the consumer will get cheap pork which allows them to spend more of their income on the fun stuff, rather than food. I remember going round an abattoir in the early 1970s. Everybody working there was from ‘the United Kingdom or Ireland.’ I went into an abattoir in about 2010 to sort problems. All the notices were in Afrikaans and Polish and the only ‘native English speakers’ were the ladies in the office.

And now the system is starting to unravel. There isn’t the cheap labour. We have a population who rather expect a fair day’s pay for a fair day’s work. There’s also the problem of job satisfaction. Heaven help us if the labouring classes expect to feel fulfilled and valued at work.

It’s interesting that this isn’t just a UK phenomenon. I was listening to BBC Radio 4 yesterday morning when I was in the car. They sent a reporter to Rumania to see if Rumanian lorry drivers wanted to come and work in the UK. What they were told is that Rumania has a shortage of drivers and they’re trying to recruit in Vietnam and Pakistan. And why weren’t Rumanians coming to the UK? They admitted the money was starting to look good, but the hours were long, the working conditions poor, and they wanted to see their families. For owner drivers they also commented that the increase bureaucracy on the frontiers meant delays and they weren’t paid for the time they spend sitting waiting for paperwork to arrive.

But stepping back a little, the pig industry in Europe generally is taking a kicking. Reuters reported that Germans are eating less pork. Then there was a big loss of sales due to a poor summer meaning a poor barbecue season. Then coronavirus restrictions hit restaurant sales. On top of it all, there have been major import bans after African Swine Fever was found in Germany.  

Julia Kloeckner, the German agriculture minister was quoted as saying “The economic situation of farms is dramatic. We have extremely low prices for pigs and piglets which you cannot make a living from.”

Apparently Germany has about 260,000 tonnes of unsold pork, German pig prices are around 1.25 euros a kilo, which is down from 1.42 euros in July and 1.47 euros before the first case of ASF was discovered in Germany in September 2020.

https://www.thepigsite.com/news/2021/09/germany-needs-new-pig-farming-strategy-to-counter-low-prices

African Swine Fever is perhaps a bigger threat to our pig industry than a labour shortage. In Germany, the number of confirmed outbreaks in the wild boar population has reached 2,096. Poland has had over a hundred confirmed outbreaks of ASF in domestic pig herds. (Transmitted from wild boar which carry the disease) This year, ten European countries have registered ASF outbreaks in domestic pig herds, and the wild boar of much of Eastern Europe (Russia, Poland, Hungary, Germany, Slovakia, Romania, Latvia, Bulgaria, Lithuania, and Estonia.) carry the disease.

https://www.feedstrategy.com/african-swine-fever/asf-german-pig-industry-situation-precarious/ For the UK, nobody really knows how many wild boar we have. Estimates vary between a very outdated 500, and a more current figure of 4,000. Estimates very rapidly go out of date. Forestry England produced the following figures for Wild Boar in the Forest of Dean

https://www.forestryengland.uk/article/more-information-about-wild-boar

Given that we no longer have ‘free movement’ there is a hope that we might be able to keep African Swine Fever out of the UK. So far the UK has managed to avoid the disease. We’ve never had it. But it’s a virus, can be carried by people on their shoes or clothing. It can be transported in meat that has been illegally imported, and to keep it out we need proper biosecurity at our ports of entry. To be fair, given the priority government has given to this area since the 2001 FMD outbreak, we’re probably screwed.

But seriously, if people think the pig industry is in trouble at the moment, it’s a walk in the park compared to what happens if we get African Swine Fever in our wild boar population.

To be fair, the wild boar problem has a solution. Have you ever tasted wild boar and apple sausages? They are fabulous.

♥♥♥♥

There again, what do I know. Speak to the experts

In paperback or on kindle

And from everybody else as an ebook

https://books2read.com/u/3yearv

As a reviewer commented, “Jim Webster’s recollections, reflections and comments, about life as a Farmer, are always worth reading, not only for information, but also for entertainment and shrewd comments about UK government agencies (and politicians).
One of the many observations that demonstrate his wryness, is as follows:
There was a comment in the paper the other day. Here in the UK, clowns are starting to complain that politicians are being called clowns. The clowns point out that being a clown is damned hard work, demands considerable fitness, great timing and the ability to work closely with others as part of a well drilled team!”

The law of unintended consequences

I don’t often apologise to the government of the People’s Republic of China but I confess I have been somewhat sceptical about their sincerity when it comes to cutting carbon emissions. But apparently they are trying. The government laid down strict limits on the amount of energy that could be used in various provinces. But when lockdown ended, there were a lot of orders to fulfil and a big backlog to clear. So in a lot of places they went gung-ho to get production back on track. After all, the lackeys of the imperialist running dogs needed their cheap clothes and trainers. They were obviously worried we might have to go naked into the coming winter. But their self-sacrifice was for nothing.  It appears that twenty of the thirty provinces and regions in China massively increased their energy consumption.

The National Development and Reform Commission which monitors these things is cracking down. Local officials will be held responsible (now that is an enlightened attitude that could do with spreading) and in some places plants have been ordered to close. A lot of other plants are working at a lot lower throughput, using less energy.

https://www.reuters.com/world/china/china-strike-harder-against-regions-that-fail-curb-energy-use-2021-09-16/

This sort of thing knocks on through the world economy in two ways. On a facebook group I sort of follow, somebody posted a photo of empty shelves in a shop selling the spray paints that he uses for his craft work. He is from Michigan. The people joining in the discussion came from around the English speaking world and the EU. All had noticed the same shortage. But then the paints probably came from the same factory.

Given that the Chinese aren’t selling, they’re also cutting back on their buying. German exports to China have fallen. China was Germany’s second largest market (after the EU) so this is serious. Fortunately for the Germans, sales to the USA increased, making the USA Germany’s second largest market. The cynic wonders whether this change will knock-on into foreign policy. Watch out for the new chancellor saying something positive about the importance of NATO?

There is another knock-on as well. The drive for greener energy means that the Chinese are moving away from coal, so they’ve been shifting to gas. Apparently, “Chinese state media quoted Premier Li Keqiang on Thursday as saying the country will secure its energy and power supplies following a series of blackouts and shortages that have forced a large number of companies to restrict output.”

https://www.ft.com/content/73c5aeb7-3d55-4405-97d5-ff44057855cc

It seems that word has come down from above that state-owned energy companies are to secure supplies for this winter at all costs. So if you’re worried about the cost of your gas central heating, the price of gas isn’t going to fall at any point in the near future.

But this web of interconnectivity links us all. Chatham House is doing some interesting work.

https://www.chathamhouse.org/about-us/our-departments/environment-and-society-programme/chokepoints-and-vulnerabilities-global

A lot of our food not only travels a long way, but passes through a lot of choke points where it could be seriously delayed. Whilst our grain might not pass through the Suez Canal or the Bosporus, should something block them for any length of time, the countries who do rely on that grain are going to be scrabbling round trying to ensure they don’t go hungry. They’re going to be in the market, bidding the price up to ensure people don’t starve. It’s not going to be pretty.

But then the World Bank said

https://www.worldbank.org/en/topic/agriculture/brief/food-security-and-covid-19

“Global food security relies increasingly on international trade. Production of grain is highly concentrated in just a handful of regions – principally the US Midwest, the Black Sea region, and Brazil.

Together, these breadbaskets supply the majority of the world’s wheat, maize and soybean and, crucially, provide the principal source of staple food supply in the most food-insecure countries of the Middle East, North Africa and East Africa.”

Things are getting fragile. Unfortunately it seems that when faced with covid, received wisdom meant the governments just switched the economy off and switched it back on again. It might work with a computer, but it takes a world economy a lot longer to boot up that even windows 10. Not only that but it looks as if it’s going to reboot in a subtly different format.

I think it’s probably time for people to adopt a more global view and realise that the problems are not caused by the political party they dislike in the country where they happen to live.

♥♥♥♥

There again, what do I know? Speak to the experts

Look what the cat brought in

As an ebook from everybody but Amazon

https://books2read.com/u/md7XEX

And from Amazon, should they even get round to linking to wordpress

But here is is using the old classic block system https://www.amazon.co.uk/gp/product/B092TV6X9S/

As a reviewer commented, “Another gentle and entertaining read about the pros and cons of Farming, ably assisted by Sal the collie dog and Billy the feral farm cat.
As always, I’m amazed Farmers make enough money to keep their farms and families going, given the ‘guidance’ given by the ‘experts’ in government and the Civil Service…

As a reviewer commented, “Another gentle and entertaining read about the pros and cons of Farming, ably assisted by Sal the collie dog and Billy the feral farm cat.
As always, I’m amazed Farmers make enough money to keep their farms and families going, given the ‘guidance’ given by the ‘experts’ in government and the Civil Service…”

Milking it

I’ve spent a lot of time with milk cows. Milking them isn’t a cheap hobby. A lot of dairy farms have a business model which resembles a hosepipe. You get in quite a lot of money from the milk cheque but then it moves down the hosepipe at speed, and sprays the money out to your suppliers and the bank. Hopefully enough sticks to the sides of the hosepipe for you to live off.

Thanks to the pressures on dairy farms over the last generation (the consumer pays less for milk than they did back in 1996) dairy farms are as a rule pretty efficient. Certainly I’d challenge any other industry to produce at 1996 prices (or government departments to run on their 1996 budget.)

At the moment things aren’t looking too bad for dairy farmers. Whilst costs are going up, the price is also moving up. The results from GDT Auctions have been positive. As an aside, for those not in the industry, GDT is ‘Global Dairy Trade’ which allows buyers and sellers to trade milk and milk products globally. As you can see from the graph, prices are back up to levels last seen in 2013. But still in agriculture, that is counted as good news.

But this is starting to create problems for processors. They have a lot of skilled staff. Can they hang on to them? Not so long ago a lot of companies were paying lorry drivers about £550 a week. Now Waitrose is advertising for HGV drivers at over £1000 a week. As an aside, this may be what ‘levelling up’ looks like. The wages for those working in the building trade have also gone up.
So are the dairy processors going to pay higher wages to keep their staff? But they face a dilemma. It’s not just staff. A lot of other costs have gone up. Apparently the four pint plastic containers so popular in supermarkets have gone up about 2p. At the same time processors are going to face increased energy and fuel costs. Yet they cannot just cut the price they pay farmers for milk, as farmers will just move to supplying better companies.
Or alternatively the farmers might just stop milking altogether. There will soon be no more Basic Payment Scheme. But you can get money for entering environmental schemes. Now I’ve looked at the schemes. Let us assume you are an owner occupier and decide to put your small or even medium sized dairy farm into them. Whilst you could no longer run a dairy herd, it might be possible to get a sum pretty close to what you were getting from Basic Payment. But you’d get out of dairy. You could retire, stay on the farm, take the environmental payments and manage the land by being paid to take sheep over winter, and then take more cattle or sheep through the summer. It would nicely pad out the pension.

For the tenant it doesn’t look as tempting, but if enough owner occupiers do get out, there’s going to be fewer suppliers and the dairy processors might even have to compete for them.

But if dairy processors cannot just cut the price they pay farmers, where are they going to get their money from? Basically that leaves the customers. Now in 1995 government statistics say that the retail price for milk was 36per pint, which equates to 63.35ppl. Currently Tesco is selling milk at £0.51 a litre. So just allowing for inflation, the price the consumer should be paying per litre is about £1.20. So obviously there is room here for an increase. But are the retailers ready to put prices up?
They too face a squeeze, not only can they not just import cheap labour to keep their costs down, they cannot import cheap produce either. Firstly there isn’t any cheap produce. As I mentioned, GDT Auctions are global. Secondly, since the Brexit referendum, the pound has been at a more reasonable rate against the euro. This makes our exports cheaper (so lamb and beef have done well this last couple of years, in spite of, or perhaps because of, Brexit) and it makes our imports more expensive. So major retailers cannot even convincingly threaten to import milk to force prices down.

ratio of the Pound Sterling to the Euro

I honestly don’t think that the retailers have an option. I suspect they’ll have to start putting the price up, or they might struggle to get supplies. After all, if they try to drive the price down, the companies that process for retail will just fail, and the companies that make cheese and similar that can be sold around the world at world prices, will take the milk instead.

I know that milk is one of the products that supermarkets traditionally try and keep cheap. It’s rumoured to one of those staples, like bread and baked beans that everybody knows the price of. But I suspect even the major retailers are going to struggle to hold the price down for much longer.

♥♥♥♥

There again, what do I know. Talk to the experts.

Available in paperback and on kindle from

and from everybody else as an ebook at

https://books2read.com/u/bwooxP

As a reviewer commented, “This book charts a year in the life of a Cumbrian sheep farmer. It’s sprinkled with anecdotes and memories of other years. Some parts (especially when featuring Sal, the Border Collie) were so funny as to cause me to have to read them out loud to my husband. It’s very interesting to read these things from the pen of the man who is actually out there doing it – usually in the rain! A very good read.”