Farmer news
Retailer asked how it can balance stable consumer prices with sustainable margins for producers
Tesco has come under fire from farmers and growers who claim guaranteeing stable prices to consumers is pushing volatility in the market back down the supply chain.
Speaking in a workshop session on ‘future-proofing your business for volatility’, at the NFU Conference this week, Tesco’s agriculture director Tom Hind said the retailer’s move to become closer to its suppliers through direct sourcing models has helped minimise volatility.
“We are working closer to our suppliers in order to manage volatility. We believe there are other opportunities in producer contracts and increasingly we’ve been able to extend relationships at farm level. Secondly we are asking, how can the retailer help to manage risk by forward buying?” he said.
But Hind came under pressure from the floor, after one questioner asked how Tesco can balance stable prices for both consumers and producers.
“You have hinted that Tesco wants to offer stable prices to customers – now what that means is you want to push volatility back down the supply chain,” one farmer asked.
“Can Tesco give its customers stable prices and its producers stable margins? You talk the talk but we need to see evidence that you can support us, because your profits always look better than mine,” he continued.
Hind replied: “You’re losing sight of the bigger issues here, which are consumption and competition. We need to focus on quality, and ensuring the product remains relatively affordable faced with the competition.”
He added that Tesco has worked with key top fruit suppliers to help them maximise packing facilities outside of the British season, using fruit from overseas.
Elsewhere in the session, HSBC’s agriculture manager, Allan Wilkinson, warned that businesses’ should look to internal management skills in order to ride out difficult market conditions.
“Management improvement and cutting costs of operation are the most important aspects, and will enable you to thrive once the prices go back up,” he said.
“What we know about volatility is that prices will go back up, we just don’t know when. One year’s loss doesn’t make a bad business,” he continued.
Another panelist stressed that management skills are crucial to helping a business through difficult times.
Managing director of arable farming group Brixworth Farming, Charles Matts, said: “To me, it’s really important that any farm manager has good management skills that extend beyond their technical ability.”
A young Devon farmer is preparing to embark on a 39-day tour of Europe to campaign for clearer poultry labelling – and is doing it dressed as a chicken.
Tamsin French will be costumed as a chicken called ‘Rosa’ and will travel through 21 EU member states in 39 days, which is apparently the average lifespan of an intensively farmed meat chicken. Rosa the chicken is calling for clear and mandatory labelling so that consumers can see how their chicken has been kept. The 39Days4Rosa tour is taking place as the European Commission reviews poultry meat labelling this summer.
French’s family farms a 22,000 strong, Freedom Food-assured broiler flock in Devon. She said: “Our free-range chickens live for 56 days, and from the moment they’re old enough to go outside, they can range through tree-covered, landscaped fields where they can express natural habitual behaviour. It’s important that consumers can accurately and easily identify the farm system used to rear their chicken meat. The labelling term ‘free range’ accurately reflects the life of our free-range chickens.”
She will be joined on the trip by Johanna Olsson, an Animal Science student from Berkshire, and Sam White, an animal welfare campaigner from Essex.