Winners and losers in wake of Brexit and Covid
The effects of Covid 19 on restaurants and the hospitality sectors saw a knockback for some areas of farm production, but most of the staple foods saw a rise in overall demand over the course of 2020, according to figures released yesterday.
And with home cooking focusing on old favourites, the humble potato stood to the forefront of the winners in resurgent demand – with the growth in shop sales more than compensating for any fall due to the closure of sit-in eateries.
Statistics released in the Agricultural and Horticultural Development Board’s Agri-market Outlook revealed that Scottish and British beef also fared well, with considerably more making its way into consumers’ shopping basket over the course of the year.
And the three per cent increase in sales for beef was matched by similar rise for lamb across a year when lockdown saw people eating more in the home due to home-working and school-closures, with the loss of school dinners.
Intended to give those in agricultural businesses a heads-up on how trends were developing, Phil Bicknell, market intelligence director at AHDB, said that the Outlook report had been one of the most challenging AHDB to draw up, given the huge impact of Covid on both domestic demand and the economies of key markets.
He said this had been further complicated by disruptions to trade following the end of the Brexit transition period.
“As 2021 gathers pace, the ongoing impact of Covid means that uncertainty is again the backdrop as we take our regular look ahead at our farming sectors.”
However, he said that pockets of clarity had emerged - particularly in relation to some headline policy areas impacting the industry - such as the continuation of tariff-free and quota-free trade between the UK and EU.
“That has been a critical issue for agriculture – the EU-27 is both the UK’S biggest customer and biggest supplier of a range of agricultural products.”
Head of strategic development at AHDB, David Swales admitted that there had been problems at ports and borders.
He said teething problems were not unexpected and were far less than would have been the case with a trade block.
But Bicknell said that while policy impacted farming, the fundamentals of supply and demand remained key drivers.
“These are increasingly international in their scope and impact,” he said. “I have no doubt that our future outside the EU will bring both opportunities and competition but I’m also conscious that it will bring increased exposure to market volatility.”
On the grain front, the organisation’s Vicki Campbell said that while there had been a 23 per cent rebound in the wheat area after the sub-10 million tonne harvest of 2020, even if the 2021 crop returned high yields, with stocks extremely low, there was unlikely to be any major surplus in 2021.
But with malting barley usage slumping by 12.5% due to reduced beer and spirits sales as a result of pub closures, and a considerable carry-over from 2020, the outlook was less cheery.