Last week I made the point that the massive concentration of the farming and food industry (and I use the word ‘industry’ deliberately) into fewer and fewer hands – a trend that has been steadily accelerating since the Second World War – has greatly exacerbated the insecurity which everyone is currently experiencing in relation to their food supplies.
Since then, I have participated in a couple of telephone conference calls hosted by Minette Batters, president of the NFU (UK), bringing together around 25 people in a range of leadership roles in the farming and food community. All that I heard in that call reinforced these concerns.
The closure of the restaurant and food service sector, which accounts for nearly half of all the food that is eaten, continues to have fairly disastrous consequences for anyone who is dependent on those outlets.
By contrast, supermarkets have doubled their sales and are in a position to capitalise on the situation, deliberately or otherwise. As an example, prices for lamb and beef have gone down due to the oversupply caused by the shutdown of the catering sector, and supermarkets will be able to benefit from that.
I had a couple of conversations with supermarkets over the last week urging them to help these beleaguered producers by sourcing local products for their stores, and the NFU are doing the same. However, the likelihood that they are going to bailout the large number of farming businesses that are affected seems pretty small, not least because the supermarkets are struggling to cope with the increased demand and their attention is focused on this.
During the call, the dairy sector was highlighted as one of the casualties of these developments, so I thought it would be appropriate to reflect on dairy through the prism of cheese as a case study, not least because I am directly affected as a dairy farmer.
It’s been a very tough week for the artisan cheese community. Jasper Hill, one of the most successful and prominent cheesemaking operations in the United States are having to sell their Ayrshire herd due to a dramatic decline in cheese sales. Closer to home, I watched a heart-wrenching video from Carwyn Adams of Caws Cenarth, who has been forced to more or less give away the entire contents of his soft cheese store and lay off his 20 staff due to a complete collapse in his sales.
Many specialist cheese retailers are also finding it really challenging, with prominent companies, such as Neal’s Yard Dairy, whose founder Randolph Hodgson was arguably responsible for the renaissance of the UK artisan cheese community, and several others having to temporarily close some of their outlets.
To add insult to injury, cheese sales through the restaurant and food service market have disappeared, the export market has dried up and many farmers’ markets, upon which some cheese producers had a heavy dependency, have closed.
Add all this up, and for many small-scale cheesemakers there isn’t much left, unless you happen to be lucky enough to have a foothold in a supermarket, supply a delicatessen or you have already developed an online or mail order presence.
Taking our own Holden Farm Dairy cheesemaking operation as an example, we estimate that our Hafod cheese sales have declined by around 75% in the last two weeks. We’ve already taken some emergency actions, including furloughing two of our staff, moving to once a day milking (the first time this has happened on our farm for 47 years), and launching Hafod Direct a couple of days ago, through which we hope to sell some cheeses and half cheeses by mail order. We are also hoping to supply some of the emergent internet-based food hubs. Time will tell, whether these direct sales will go anywhere near compensating for the trade that we have lost, but I suspect that it won’t.
Nevertheless, we are one of the lucky ones, since we are making a hard cheese which has a shelf life of up to a year after it is first saleable, which puts us in a very strong position indeed compared to producers making soft cheese. However, since it is cheese sales that provide the income upon which the whole farm economy depends, we are still very vulnerable and could very quickly run out of cash if we are not careful.
Of course we’ve thought of selling all our milk to Calon Wen, the Welsh organic milk co-op, who normally take our surplus milk requirements, but they too are suffering dramatically from the pandemic. The lion’s share of their sales were to Pret-a-Manger and Leon and, with those outlets lost, they will be forced to sell on the so-called ‘spot’ milk market with prices likely to drop as low as 19 pence per litre, less than half the normal organic price.
The factors I have mentioned above would be enough in their own right to explain why the specialist cheesemakers have been hit so hard by the virus, but there is a further contributing cause, namely the combination of the economics of scale and the absence of the polluter pays principle that is applied to commodity cheese, whose presence dominates the shelves of the supermarkets.
Taking the example of Hafod cheese and trying to make a comparison with the cheddar that is sold in Sainsbury’s, the price that we charge our wholesale customers is substantially more than their retail price, so by the time the cheese has a retail mark-up, it is more or less out of reach of the normal cheese market.
Some of this price differential can be accounted for by the economics of scale – Sainsbury’s block cheddar is manufactured in huge quantities from the milk of ever larger dairy herds, which of course brings cost savings all the way down the chain. Some of these savings would apply whether the milk was produced organically or using conventional dairy farming methods, but there is another factor.
If the farmers selling milk from intensively managed dairy herds, which now account for half the milk produced in the UK, were required to be financially accountable for the negative impact of their farming practices on the environment, natural capital and public health, the price that the creamery would have to pay for the milk would go up significantly.
We are talking here about air and water pollution and damage to public health caused by nitrogen fertiliser use, deforestation and environmental damage from corn and soya production to make concentrate feed for cows, antibiotic resistance, and a whole range of social and cultural costs resulting from the industrialisation of dairy farming, including reduced rural employment, with all the knock-on implications for regional and local economies.
An appropriate comparison here was encapsulated in an animation we made several years ago called A Tale of Two Chickens, comparing the price of an organic and pasture-fed chicken on sale in a supermarket in Northern California with its factory-farmed equivalent. There was a four-fold price difference between the two birds.
In making this point I have no wish to criticise the conventional dairy farming community; many of those farmers are personal friends and they have had little choice but to follow the best business case which has resulted in them becoming ever more intensive. In the circumstances – in other words in the absence of the application of the polluter pays principle – the opportunity to produce a relatively expensive artisan cheddar accessible to a committed niche customer base will inevitably be limited.
Writing this, I have absolutely no idea how things are going to play out during the next few months. The worst-case scenario is that a very significant percentage of the wonderful community of artisan cheese-makers could be forced out of business.
An alternative scenario, and the one that I obviously would prefer, would be for an upsurge of citizen commitment to purchasing local, sustainable and artisanal foods, motivated by the shock of the sudden interruption that we are all experiencing right now of our globalised food system.
The likelihood of this outcome could be significantly enhanced by some kind of government intervention, perhaps initially through price support for these producers and afterwards through the introduction of the polluter pays principle, the redirection of subsidies to support sustainable and artisan producers, mirrored by a massive commitment to preferential purchase of sustainably produced food for all meals served on the public plate, including schools, hospitals, care homes and prisons.
Realistically, none of those interventions are likely to happen in the short or even the medium term, so we will be left with the only really potent vehicle for change, namely citizen action. Of course, this needs to be combined with actions from the producers themselves, including a switch to online and mail order marketing, pop-up farm shops, food distribution hubs, and a list of innovations that will expand in direct response to the ingenuity of the food producing community. We at the Sustainable Food Trust will do everything we can to encourage and support the citizen-based renaissance of sustainable food sourcing using all the channels I have described.