Urban Food Chains

the links between diet and power

olives
Olive oil stocks under pressure
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Spain, the world’s largest producer of olive oil, faces the prospect of running out of extra virgin olive oil in the coming months. According to industry figures seen by Urban Food Chains, forecasts for worldwide consumption of olive oil are expected to drop from 3.1 million tonnes to 2.9 million tonnes in the current campaign. There is a potential shortfall of 745,000 tonnes worldwide.

The Spanish industry invested heavily in extensive tree plantings around the turn of the century, with enough trees and crushing capacity to produce one and a half million tonnes of olive oil in a season. But the 2022-3 crop was a poor crop and down by over 50 percent against the previous campaign. This year a lot of flowers set on the trees, but like last year, the trees are stressed and are shedding the fruit.

With total olive oil stocks  across the Spanish industry hovering at just over 607,000 tonnes, the sector faces empty tanks later this year. Domestic consumer demand is strong and April sales in Spain topped 63,000 tonnes. With at least six months to go before the next harvest comes onstream, Spanish consumers will be competing with exporters for physical stocks of olive oil.

Demand is strong and prices are high but expected to go up even further. Assuming that Spanish consumers ease up on their purchases of olive oil, which is not a given, a 5% drop in month on month sales volumes would represent a requirement of just over 277,000 tonnes between now and the next crop. The Spanish industry delivers shiploads of olive oil around the world and all over Europe by tanker truck. Exports as of around 50,000 tonnes a month would empty the country’s remaining stocks by November.

data source: International Olive Oil Coouncil

Like any other crop-driven commodity, there is a numbers game in play and prices will rise steeply to head off strong demand. Retail margins will come under pressure as physical product becomes harder to obtain. The EU has trade deals with north African producers, who can ship quota  tonnages that member states can draw down with zero duty. Should any of this third country olive oil be packed for the UK market, even in a blended product, Rules Of Origin (ROO) would apply on arrival at the UK frontier, where duty would be charged on the non-EU content.

But the underlying concern has to be the drying out of water tables across a huge swathe of southern Europe and the Mediterranean basin. Olive trees have deep roots, but not deep enough, it might seem. In Spain, the planting of thousands of trees has propped up crop yields most years, but not all. This year’s forecast being a case in point.

Background notes about olive oil.

retail
Retail watchdog
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The Groceries Code Adjudicator is tasked with ensuring fair play between market forces and retailers trying to manipulate things. There were many dubious practices in play at the end of the twentieth century and with retailers holding the whip hand over suppliers, an external agency was long overdue. The position of Groceries Code Adjudicator was first discussed in 2009 and it was long in the making. Its terms of reference are here. The Groceries Code Adjudicator Act of 2013 set up the retail watchdog, which operates out of one of London’s dockland office blocks.

Answerable to what was then the Department for Business, Energy and Industrial Strategy, the adjudicator had a handful of seconded secretarial staff. Just over a dozen retailers with annual sales of more than one billion pounds and now including Amazon, have compliance officers. These are members of the retailers’ management staff, charged with enforcing the provisions of the Act.

There is one major shortcoming with the framing of the act, though. While there are many links in a supply chain, only the retailer and the supplier who is paid by the retailer are covered by the legislation. As yet, there is no attempt to legislate for the more complex structures and working relationships that exist in the food industry.

retail
Blunt instrument
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Tesco has tried to revive shelf money for its online retail operation. At the end of the 2022-3 financial year the multiple announced its plan to impose two flat rate “fulfillment fees” : 12p/unit for branded goods, 5p/unit for own label lines. Short for Stock Keeping Unit (SKU), a unit is an item offered for sale. This incredibly blunt instrument was to be applied and charged to suppliers with threats of punitive retribution in the event of non-co-operation.

In practice it is not even remotely level-handed: suppliers of a £12 bottle of wine would face a one percent margin haircut, while companies supplying goods with a £1 price point face a 12 percent total margin wipeout. Not surprisingly, no-one is playing ball. The Grocery Code Adjudicator faces a major challenge, even though Tesco is out of order in this case. Watch this space.

NFU president Minette Batters told Urban Food Chains: “This move from Tesco is a stark demonstration of the lack of fairness within the supply chain. At a time when crippling production costs mean many farmers and growers can’t afford to continue producing food at scale, resulting in supermarket shortages of fruit, salads and eggs, the food industry desperately needs fairness and collaboration, not further erosion of trust.

customs clearance key concept
Line for line
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The product descriptions that appear alongside customs codes in a schedule are set in stone. The whole point of the Harmonised System (HS) is that at any given time, specifications are the same from one trading bloc to the next. When classifying carcases, for example, there is no adjustment to be made for organic product over intensively-raised. The existence of additional input costs is of no concern when filling in customs declarations. Every market has its own mechanisms for assigning values and prices, which are separate from fiscal liability.

Asia cultivation haulage plantation ship
Squeezing money from geography
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Travel often brings with it a taste for foods that consumers encounter while they are away from home. This broader view of food and drink gained momentum in the latter half of the 20th century, as shoppers started asking for avocado pears, a wider range of pizza and pasta products, not to mention a tidal wave of Asian foods that have been greeted with open arms and either adopted or adapted to British tastes. Many Indian foods have found their way to Britain over the centuries and some, like tea, became national institutions.

It is time to look at the historical context of moving food around the world and look at the topics of food security and self sufficiency. During the latter years of the twentieth century, Britain was about 50% self sufficient: the official headline figure was closer to 65%, but since UK food manufacturers import a variable proportion of their ingredients, these shipments should be taken into account. The impact of two world wars on the domestic economy of Britain leaves a residual malaise and feeling that the UK “…ought to do better…” at producing its own food, notably among older generations.

There is an array of variables that define the economic environment in which food is produced, some of which can be covered now. The first is the colonial plantation paradigm in which overseas territories are ruled and exploited solely to produce commodity crops for colonial powers. Britain, Holland, Spain and Portugal come to mind as historic colonisers, shipping plant material and slave labour in to strategic locations, usually between the tropics. Feeding the work force was a low priority, but was usually a part of the operational model.

Down the intervening centuries this practice continued, developing into what is now referred to as landgrabbing. The topic is extensively documented by Fred Pearce, author of The Land Grabber. The 2012 book can be bought as a paperback or a download here. As the name suggests, land is bought or leased and fenced off. This has been practiced by countries such as China and a number of Arab states. The enclosed land is brought into cultivation usually by nationals from the states concerned and the crops are shipped to these countries as they are harvested. Local populations are excluded from these holdings, which are often of the highest quality available locally.

While this is a modern, pernicious practice, it is not without historical precedent. Irish Quaker and philanthropist Joseph Fisher was a poor law commissioner during the Irish potato famines of the 1840s. From his family home, overlooking the approach to Cork harbour, Fisher recalled seeing ships setting sail bound for English ports. These vessels were laden with grain grown and harvested by starving labourers in the surrounding counties. Fisher went on to write the 1865 book Where Shall We Get Meat? As it happened, shiploads of cheap grain started crossing the Atlantic, as the American railroad system reached the eastern seaboard and started a sea change in European livestock sectors. The entire history of North America to that point is itself dominated by a high profile land grab in which indigenous American peoples were marginalised by settlers and farmers.

The buying power of remote markets can have an immediate impact on the food security of rural populations. This is a measure not of aggregate harvests, but their availability for local communities.

key concept
Third country
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Despite the inference that there could be multiple options, being a third country is a binary opposite of a member state in European parlance. The possible source of ambiguity in this distinction is that there are two implied alternatives to being a third country. Between themselves, EU member states use the term third country to refer to countries which are not EU members, in much the same way a verb might be conjugated. To complete the analogy, the first person is the member state speaking, the second person refers to the other member states on an equal footing, while the third person is identified as a separate, external non-member.

Unlike other areas of European policymaking, in which a wide spectrum of buying-in is accepted without argument, the distinction between being a member state and a third country is fundamentally indivisible. The UK negotiators failed to gain any traction in their attempts to carve out a halfway quasi-membership status that might have opened the way to feathering a cuckoo’s nest of a la carte patronage for British interests. The choice of Michel Barnier to lead Brexit talks for the European Union reflected his commitment to the indivisible membership of a European community that was used to accommodating consensus policymaking in specific areas and contexts.

Brexit's legacy customs clearance haulage lorry raw
Westminster faces customs stalemate
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The Scottish parliament is accusing Westminster of intransigence over the halted building work at the Scottish car ferryport of Cairnryan. Work to build a Border Controls Post (BCP) started after getting a government green light last year. Since then, construction has ground to a halt, as Westminster has refused to give a binding commitment to fund the BCP in full.

Sailings from Stranraer were transferred to the nearby Dumfries and Galloway port of Craigryan back in 2012, for operational reasons. Wholly-owned by Larne Harbour Ltd, Craigryan is a part of the P&O landside portfolio. It can operate up to 16 sailings a day, serving destinations in Northern Ireland.

While Brexit negotiations were in progress, Westminster was committed to funding border infrastructure in full. The Scottish parliament is concerned that it may end up footing part of the bill for port infrastructure on a privately-owned facility. There are also political sensitivities about a requirement for customs facilities on what is currently an internal border.

The implementation of Sanitary and PhytoSanitary (SPS) checks that are the reason for building a BCP in the first place has not happened. Successive start dates in 2021 and 2022 were announced and cancelled: Westminster is currently planning to start SPS checks on livestock and animal products in July, although the BCP site at Cairnryan might not be operational by then.

From a commercial point of view, ferry traffic patterns have changed since Brexit, making the business case and the requirement for a BCP a moot point. The introduction of inbound SPS checks for the UK cannot be evaded forever.

dairy livestock
Between a rock and a hard place
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Hampshire tenant farmer Oliver Neagle was forced to cull 18 of his cows after water supplies to his farm were cut. The dairy farmer pays for water as part of his rent, however he endured breaks in his supply in December and February. Southern Water laid on bottled water for consumers, but had no solution to offer Neagle’s livestock. The number of lactating cows on his farm has gone down from 110 head to 82. With fewer milking cows, the business is compromised and faces harder times. You can read the BBC’s account of what happened here.

This story is an example of the sort of public interest reporting carried out by local BBC journalists that would not have had any traction for commercial broadcasters. Neagle’s story must not be allowed to go down the back of the sofa, no more than the importance of fearless public sector journalism should be undervalued or misunderstood. 

City life cultivation food production
City life 2.1
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Is the writing on the wall for hydroponics? Vertical Farming Daily reports on trials for aeroponics in an adapted hydroponics line. The new technology has to fit in with existing installations to stand a cat in hell’s chance of being considered, but rises to the challenge of producing crops faster using less water. The plug and play modification showed increased yields of just over 20% in trials organised by aeroponics developer Lettus Grow, using the firm’s Aeroponics Rolling Beds (ARB).

These replacement growing trays keep seedlings suspended in the air, receiving nutrients in a carefully controlled fine mist at fixed intervals. To eliminate any risk of blocked nozzles, the Lettus system uses ultrasonic technology to shake droplets of growing solution into the roots of the crop, generating a fine mist.

The application of the nutrient mist can be very closely controlled, keeping the growing medium dry and making the crop easier to manage. The technology is being trialled in widely varying situations. Farming family business GH Dean & Co Ltd in Kent is partnering with grower Ro-Gro in a bid to speed up the development of a new revenue stream, redefining the rate at which a return can be earned on a new agricultural activity.

HM Prison Hewell is using aeroponics to train inmates in the new techniques. As well as growing fresh food for inmates there is enough to sell outside the establishment, too. Local action group Cultivate is creating a local food network to feed communities around Newtown, Powys, while Grow It York is looking to develop food strategy with aeroponics.

Vertical farming has much to commend it. By focussing on one stage of plant development it is easy to miss one important detail, though. Since it does not complete the plants’ life cycle, it does not generate seed stock for further crops. This remains as an input in the sector’s otherwise admirable environmental credentials.

datacrumb
Poultry producers face challenging market
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Since February 2021, liveweight prices for finished chickens have risen by 11% in the UK, while chicken feed costs have risen by up to 30%. Over the same period, UK exports of poultrymeat to the EU have fallen by 25% to 208,000 tonnes, while EU shipments of poultrymeat rose by 2.3% year on year to 275,000 tonnes in calendar year 2022. UK consumers buy white chicken meat and not the dark meat on the carcase, which UK poultry producers used to export to balance demand for their output. Without an export market for the dark poultrymeat and facing competition from increased volumes of imported product, the UK poultry sector is between a rock and a hard place.