Input free farming and the cost of living
As we scan supermarket shelves we see rising prices in response to increased costs at the farm level.
For most livestock farms the biggest input costs are a combination of the three 'F's
Fuel - Feed - Fertiliser
In recent times the global political situation, most notably the war in Ukraine has caused these three input costs to increase significantly, we will look at them individually and explain how we believe we can mitigate the risk by farming without them.
Below in italics taken from The Agriculture and Horticulture Development Board (AHDB) website here
Fuel
World oil demand is forecast to surpass pre-pandemic levels, with higher demand from refiners and supply disruptions underpinning price increases. Consumption remains robust, especially in advanced economies, with continued recovery in travel, transportation, leisure, and hospitality.
World oil markets could rebalance if production does increase, and demand starts to stabilise. However, tighter sanctions may force Russia to shut more wells, leading to continued supply shortages if capacity is insufficient to offset this production elsewhere. Under this scenario, shortages could persist with a resultant upward pressure on prices.
However, there remain risks to supply resulting from ongoing geopolitical tensions and the impact of the pandemic, aggravated supply chain issues, high sovereign debt levels in many regions and expected monetary tightening by central banks in the US, the UK, Japan, and the Euro-zone.
So how can farmers farm without fuel?
The three F's of feed fuel and fertiliser are rather interlinked as we will see. When no fertiliser is used on the land there is no need for farmers to use large machinery to spread it, the same is true of feed, however, it would be foolish to suggest that a farmer doesn't need any form of transportation to move across the land.
Reported in The Scottish Farmer in June this year was the frightening statistic that: Running a tractor in a field now costs double what it did 12 months ago, with the price of fuel for a tractor ploughing now over £220 per day. Link here
A couple of our farmers have forgone the red diesel powered tractors and swapped them out for a more future proof way of moving across the land.
A new wave of electrically powered quad bikes can handle the job adequately in this case, bikes such as the sub £5k Explorer GT from Eco Rider offer great performance and can potentially be charged with solar panels making it not just emission free transportation but also gives the means to move without being subject to rising costs.
Feed
Below in italics taken from The Agriculture and Horticulture Development Board (AHDB) website here
Feed wheat
Feed wheat prices remain underpinned by the war between Russia and Ukraine. UK feed wheat futures (nearby) reached their peak at £361.00/t on 16 May. Since then, prices have seen some downward pressure, though remain at historical highs. Price volatility is expected to continue looking ahead this year on a tight supply and demand picture.
Despite a deal being struck for a Ukrainian grain export corridor, Russian bombings of Ukrainian ports continue. Questions remain about the quality of Ukrainian grain stored at port, though room will need to be made for new season supplies.
At the same time, global demand remains strong despite a worsening economic climate. European origin demand is especially strong, considering Black Sea supply disruption.
Feed barley
Feed barley prices continue to track wider global grain markets. Domestically, we enter this season (2022/23) with a tight balance of barley. Winter barley harvest progress in the UK has been exceptionally rapid with 69% of the English, Welsh and Scottish harvest already complete to 19 July. Early yield indications from the South look to be slightly ahead of the 5-year average. Though some lighter soils have suffered drought stress at grainfill.
Given the supported global wheat and maize price outlook, this will likely keep barley prices supported this season.
Maize
Maize prices have remained high on a tighter global maize supply picture. Availability of Ukrainian supply remains uncertain, adding to short term price volatility. For the EU, a key origin for UK imports, yields have been trimmed following hot and dry conditions. In top global exporter the US, area is estimated down year-on-year. Hot and dry weather forecasted for August, during a key development stage, remains a watchpoint for yields.
To note, the UK agreed to lift the tariff on US maize imports from 1 June 2022.
Soybeans
Global supply is forecasted this season up year-on-year, mostly on account of increased production in the US and South America. Brazilian soybeans are currently competitively priced, picking up global demand. Chinese buying remains a watchpoint to price support this season, considering COVID lockdowns ongoing. Though global domestic crush is forecasted to be strong across this season. With an increased supply outlook for soybeans, we could see some bearish market tones looking forward in the season, especially when the US crop arrives September/October.
Though high energy prices look to support the wider oilseed complex.
The solution:
Grazing animal feed:
The simple solution to remove feed from our farming systems in order to gain security from a volatile market is to grow it ourselves, either on the farm as a crop, or in the case of the grazing animals, simply as pasture, as our suppliers do.
Non grazing animal feed:
With the monogastrics (or non grazing animals) it's not so easy but there are ways of drastically reducing the cost. The most obvious way is simply to keep the animals in a natural systems where they can derive some of their nutritional needs from the land, in the case of our soy-free chicken farmer Mark Chapple estimates that his chickens gain as much as 40% of their feed from the plants, roots and bugs on the land they're moved across, the rest of their feed is of course soy-free and is made up from locally grown grains and seed meal after cold pressing rapeseed oil making use of a waste product.
Fertiliser
Below in italics taken from The Agriculture and Horticulture Development Board (AHDB) website here
With India tendering for 500,000t of urea recently, this could highlight the potential for limited global urea availability and consolidate current price trends, although Europe does have various supply options. AHDB monthly fertiliser prices indicate prices have fallen slightly on the back of decreasing demand, but it is unlikely, given the surrounding circumstances in the energy market, that these will continue a downward trend over the coming months unless the energy market eases.
Just because cattle can be described as 'grass fed' doesn't automatically mean that no fertilisers are used, it is common even in grass only systems to apply NPK fertiliser (that is a fertiliser containing the elements Nitrogen Potassium and Phosphorus) to encourage the crop of grass to grow, however, there is another way, the way our farmers do it.
With regenerative agriculture the cattle create and apply the fertiliser, as one of our farmers Neil Harley of Mywood stated, "A cow is a fabulous thing, it has a lawn mower at the front and a muck spread at the the back."
When correctly managed by using tools such as rotational grazing plans the biodiversity of a system starts to increase and the system moves towards becoming self sustaining as nutrient recycling speeds up, this means that no fertiliser as required as the grazing animals provide this function.
The implication of input cost on food prices
As the crisis deepens we will see the price of cheap food rising more quickly than higher priced foods as cheap foods are be more reliant on these inputs for their production and the margins are tight so they have no choice but to pass these costs on to the consumer.
We know the food we sell is not supermarket cheap but we have managed to not make any price increases in light of the cost of living crisis because as close as possible our farmers are learning to move to the free inputs of nature that are simply sunlight and rainwater.