In spite of the steady increase in average size of farm business over the past few decades, the vast majority would still be classified as SMEs – small to medium enterprises – in the jargon of banking and the financial pages.
In fact, most farms would be towards the small end of the SME classification for turnover.
The point of mentioning that is that these small-scale individual businesses have to deal with the buying power of a handful of supermarkets, a steadily declining number of outlets for beef cattle, sheep, pigs and grain, and the selling power of a handful of giant fertiliser and chemical companies.
For dairy farmers, the problem has just become more concentrated with the takeover of Robert Wiseman’s Dairies by the German company Muller. A business built up by the Wiseman family from a producer-retailer milk round at East Kilbride just over half a century ago now processes about a third of all liquid milk sold in Britain and has been sold for about £280 million.
Good news for the Wiseman brothers Robert, Alan and Gavin, who will get about £49 million, £35 million and £6 million respectively from the deal; worrying for the 1,100 dairy farmers who supply Wiseman’s six dairies and 14 depots from Aberdeen to Somerset.
Wiseman management and Muller have made encouraging noises about “no change” for their milk suppliers and, inevitably, “a good deal for both sides”. Dairy farmers longing for nothing more than a settled market at decent prices will have to wait and see.
As with beef and sheep farmers, there are fewer of them to do that. The number of dairy farmers in Scotland dropped again last year, down 24 to 1,027. But unlike beef and sheep farming, – animal numbers fell on most farms – dairy herds continue to get bigger.
The number of cows increased by 1,046 to 162,952 and the average herd size increased to 159. It’s a lot to think about milking twice a day, 365 days a year, but only a decimal point followed by many zeroes percentage of Muller’s milk intake. When it comes to setting prices there’s only going to be one winner and as the major supermarkets scrap it out by trying to offer the lowest prices to customers there can only be one winner there too as far as squeezed suppliers are concerned.
With the countryside looking exceptionally good for the time of year – at time of writing – and grain growers in the earlier areas getting twitchy as ploughed fields dry out, the annual question arises of how much spring barley will be sown in the next two or three months?
Whatever the total, farmers shouldn’t be afraid to grow the crop for malting said SAC rural consultant Julian Bell at a recent college/ Home-Grown Cereals Authority conference at Carfraemill. “You can be confident about malting barley,” he told several dozen grain growers. I thought how Sir Humphrey of Yes, Prime Minister fame might have said “That’s a brave statement, Mr Bell.”
Brave, because of all relationships in farming – and too many can still be tenuous and tricky – that between growers and maltsters is one of the most fraught. Nothing is ever quite as it seems, but Mr Bell based his prediction on a shortfall in world production and steady, even increasing, demand for whisky.
“Maltsters and distillers need your barley,” he said. They certainly did last harvest when malting barley comfortably topped £200 a tonne. But it’s not certain prices will do that this year while at the same time growers face increased fertiliser and chemical costs.
Written contracts have become more common in recent years, although growers that can be a two-edged sword. What looked a good basis for a forward contract has more than once in recent years produced a much lower price than a grower could have had from the open market spot price.
It’s never an easy decision for a grower to take, for malting barley or any other crop. Co-operation and central storage is one way to cut risk, as is selling half of estimated production on contract and taking the spot price, good or bad, for the rest. On-farm storage capacity has a lot to do with it.
So has the urge to get sowing in spring sunshine. It’s tempting today, but I think we’re probably a long way from a general start.
The dangers to farm livestock of burning paper lanterns coming to earth from parties and festivities are of increasing concern to farmers. With the start of the Chinese New Year – it’s now the Year of the Dragon – this week, NFU Scotland has again voiced concerns.
The problem is that party lanterns are held together by thin wire or bamboo that can be taken in by animals while grazing, or picked up by machinery to re-appear in hay or silage, while burning lanterns present an obvious hazard to stored hay and straw and buildings.
Let’s hope party and festivity organisers take heed.