Richard Pearson NFU Profiting from Sustainability Conference York Dec 2014

Agriculture Looking For A

Sustainable Profit

Richard Pearson

NFU Regional Director

December 2014

Population Up

Food Consumption Up

Life Expectancy Up

An industry with growing economic

contribution 2

00

0

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

Source: Defa, Agricultural Accounts 2013

£ millionIncreasing economic contribution: Gross

Value Added (GVA)

• Agriculture’s contribution to the

economy as measured by GVA (Gross

Value Added) was £9.2 billion. This

has grown by £2.3 billion in the five

years to 2013 – a 34 per cent

increase.

• At the same time farm output has

grown by 31 per cent, to £25.7

billion.

• An impressive performance

compared with wider economic

picture.

Food and drink exports continues to grow

in 2014

Jan-June 2013

(£ bn)

Jan-June 2014

(£bn)

%

change

Total

Exports 6.2 6.5 4.8

EU 28 4.7 4.8 2.5

Non -EU 1.5 1.7 12

EU% share 75.6 73 -1.7

Non -EU %

share 24.5 26.2 1.7

Trade

balance -12.6 -12 -4.9

Source: Food and Drink Federation (FDF)

£12.8bn

0

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14,000

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07

20

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20

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20

10

20

11

20

12

20

13

Exports £m

Source: Food and Drink Federation (FDF)

Food and non-alcoholic drink exports (£m)

Future Demand Looks Strong

What Is The Reality On Farm

Price falls across the board

Commodity Prices

Oct 2014

Prices

Prices a

year ago

% change

y-o-y

Dairy (ppl) 30.8 33.0 -6.6%

Deadweight Cattle (p/kg) 349.0 391.3 -10.8%

Deadweight Sheep (p/kg) 355.2 392.1 -9.4%

Deadweight Pigs (p/kg) 152.6 171.9 -11.2%

Feed Wheat (£/t) 111.3 160.5 -30.6%

Potatoes (£/t) 126.5 160.67 -21.3%Source: AHDB/DairyCo/Bpex/Eblex/HGCA/PCL

• 2014 has been the year where across commodities, the industry has

seen falling farmgate prices.

• A combination of global supply and demand factors and continued

intense competition at a retail end has put a downward pressure on

beef, dairy and cereal sectors.

It’s all about volatility….

Basket of Commodities

0.0

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FAO - Food Price Index

UK Feed Wheat

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3 J

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Oct

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Yorkshire Region

This Region Has

• 17% of cereal area

• 36% of pig herd

• 18% of cattle herd

• 27% of sheep flock

• Directly employs 41,371 people

• Agri Food Manufacturing base

• Research / Universities / Colleges

• There is no lack of advice to famers.

• Complex challenges ,Conflicting messages

• Farm businesses often resource and time poor

• Low confidence and high risk

• Personal motivation

• Stand still / self sufficiency will fall…

• Research, Innovation, Growth

• Growing home and global demand…

• What potential --- world market player?

• Opportunity…

Nothing is Impossible