Uncertainty has led to price volatility, which in turn requires greater vigilance when it comes to grain contracts, as well as detecting any fraud – be it in short-delivered goods, fuel theft or by ‘fortifying’ commodities.
In the latest Government Food Strategy for England paper, there was a comment that referred to the ‘critical importance of UK food producers to our national resilience’, says Open eld’s head of compliance, shipping & research, Cecilia Pryce. The context was broad and complementary to the sector as a whole, while also reminding the reader that 75% of what we consume domestically is homemade or home grown while reiterating that food manufacturing is the biggest manufacturing sector in the UK. I do feel the importance of ‘UK Agriculture PLC’ has finally hit home, but I also feel it’s only a direct result of the wake-up call caused by the war in Ukraine. This current scenario was certainly not anticipated in the initial National Food Strategy document and, if anything, chapter 14 was concerned about climate change and crop disasters matched with supply chain failures – and the comment that, if there was an issue, we would be better off than we were last time rationing was introduced! The question now is, how do we keep the focus on what we all do and educate the public that farming and food matter?
The environmental issues raised in the various documents haven’t disappeared overnight, but the luxury of cheap food and energy prices has been replaced by uncertainty. This uncertainty has created price volatility, increasing prices for many products which many manufacturers are struggling to push to reluctant end consumers, unsure of the consumers’ reaction. How many ‘nice to have’ products will suddenly stay on the shelf, and will this supply shock actually change the way we eat? There may be some health positives to this issue but there is also going to be a mountain of pain for some as they try to make ends meet. Higher prices can also readily lead to fraud. Many may think cereals and oilseeds won’t fit into this category, but I urge you to think again. Please think before you load a lorry or sign for a delivery – check the number of bags of fertiliser, check the hauliers’ paperwork, and if in doubt please phone your merchant and check anything that doesn’t look right. Harvest is a very busy time and an ideal opportunity for those who may want to take advantage. Similarly, check your farm security systems, be that your diesel tank or your grain silos, and never be tempted to ‘blend’ or ‘fortify’ your commodities with added extras, as that’s called fraud! I would also urge you to keep a very close eye on your grain contracts and please take the time to read and understand them. Disputes are luckily very rare in this industry. That is because most contract terms and wording have been tried and tested, but you need to check your confirmations including price, position, tonnage and assume nothing – but check everything. If it’s not right, get it corrected in a timely manner. Every grain trading year is unique, but never forget that what you do is of national importance. It may not feel like it at times, but the government has now been reminded and it’s time to keep reminding them that you need certain tools to be able to continue to farm and feed the nation. Similarly, remember that markets move both ways and a supply shock can be reversed quickly if the will is there.
On 8th June 2022, CF Fertilisers announced the permanent closure of its plant at Ince following a shutdown since September 2021 due to the sharp rise in natural gas costs, says Openfield’s fertiliser manager, Lucy Hassall. The Ince plant had capacity to produce around one million tonnes of fertiliser per annum made up of nitrogen, nitrogen sulphur, and compound NPKs. The company believes that the Billingham facility is better positioned for long-term sustainability as it has sufficient capacity to meet all of its forecasted domestic demand for AN. This will, however, mean that its nitrogen sulphur grades and NPK compounds will no longer be available, and the industry will need to look for alternatives for regular buyers of these grades. It is well understood that sulphur is an important nutrient for plant growth and development, and plays a vital part in nitrogen use efficiency. Whilst there are other options, there is likely to be
a lack of availability.