EU Exit Perspectives: 2020 – A memorable year for all the wrong reasons?

Tuesday, 22 December 2020

In this week’s blog, our market intelligence director Phil Bicknell takes a look at the range of challenges we have had to deal with in 2020 and how the industry has weathered the storm in the eyes of our consumers.

There’s no avoiding the big event of 2020 – Covid. It has changed the way we live and work. And it’s changed what, where and how we eat. With the emergence of an effective vaccine, Covid will, we hope, eventually become a thing of the past. Unlike Brexit - The history books will no doubt also focus on 2020 as the year that the UK left the European Union. The transition period means the impacts are yet to emerge. Even though uncertainty over our future trading relationship remains, at the time of writing, change is coming.

One of those key changes relates to future farm support, particularly as farming policy is a devolved issue. Again, many will point to uncertainty here, but the future farming policy picture is becoming clearer, certainly in England. Yes, we all want to know the detail but knowing the timeline for phasing out of direct payments and knowing that it will be 2024 before environmental schemes are ramped up at least lets me plan accordingly.

On farm, I’m certain that diaries and accounts will capture how weather hit many farming businesses in 2020. Wheat production barely scraped above the 10 million tonne mark and dropped a staggering 38 per cent on 2019 levels. Earlier in the year, conditions seemed to flip from very wet to very dry incredibly quickly. And it wasn’t just arable production that impacted – livestock producers had to contend with the lowest grass growth, in dry matter terms, since 2014.

Viewing 2020 in the round, our industry has faced a host of challenges. But it also feels appropriate to pull out the positives too.

We saw short-term imbalance in supply and demand in March and that caused some specific challenges in some sectors. But all things considered, our industry responded incredibly well, especially when compared to other sectors of the economy. Once again, our responsiveness and resilience has been to the fore. In fact, the enforced switch away from foodservice to retail has been positive for some products, given retailers’ focus on domestic product.

Also, it has given our supply chain an opportunity to demonstrate where they are supporting consumers and to build trust. Some 74 per cent of respondents to our market research believe farmers have been doing a good job producing food during the pandemic, cementing farmers’ position as by far the most trusted part of the supply chain. This is due to your expertise, as well as your care for animals and the planet. There’s no doubt that sustainability has become a critical issue right across the supply chain but we shouldn’t forget we start from a strong position. Shoppers feel much more positively about the impact of farming on the environment in the UK, with 44 per cent feeling positive and only 15 per cent feeling negative.

To what extent that is impacted in future environmental initiatives will be of key interest to farmers. We know consumers are interested in issues like non-plastic packaging on food and sustainability labelling. However, tree and hedgerow planting, greater efficiency and helping the soil to absorb carbon are also of interest for consumers. Many will be hoping they offer genuine revenue streams as part of future policy measures.

One positive that I’ll certainly take from 2020 has been AHDB’s ability to help the industry amid great uncertainty. We’ve seen more levy payers drawing on our insight and our services, all triggered by the much greater interest in the market dynamics and how that impacts farmers. We’ve helped support the industry with targeted campaigns in meat and dairy, designed specifically to address the short term drops in demand. And as digital has become the default, AHDB webinars and podcasts have reached a new audience.

Change is constant and farmers are no strangers to change. However, that change accelerated in 2020 and will continue in the coming years as the industry adapts to the new normal. As Darwin proved, those most adaptable to change are the most likely to survive and thrive. Our focus is to help our industry adapt to that change, maximise the new opportunities and manage the inevitable challenges.  

Happy Christmas

EU exit: food, farming and agriculture