FOB Chief Executive’s Weekly News for 25th October 2021

UK Millers  Harvest Briefing – 20 October 2021

Overview

• Strong global demand for cereals, other raw materials and utilities, as well as tightness in the UK wheat and haulage markets has led to a range of inflationary pressures.
• Whilst the UK wheat crop is estimated at approximately 48% higher than in 2020, prices remain elevated owing to strong domestic demand and global pressures, with quoted October prices for delivered breadmaking wheat (North West – same month) standing at £268/t, £49.50/t higher than equivalent quotation in 2020.
• UK breadmaking wheat quality and condition is lower year on year resulting in higher premiums over feed wheat prices, now standing £27-32/t higher than at the same point in 2020.
• At a global level, weather concerns and strong demand for grains have kept prices high. Severe drought has significantly reduced Canadian wheat production resulting in an increase in pricing of 46% year-on-year.
• Freight costs for bulk wheat and commodities have risen up to 80% from 2020 which also impacts many other raw material input costs.
• Utility prices have also escalated substantially year on year with increases in gas (+140%) and electricity (+54%)
• The lack of HGV drivers has also impacted our sector in both flour and wheat.

Government has published its response to the public consultation on the regulation of genetic technologies in England. The main outcomes are:

• A Statutory Instrument to be laid by the end of 2021 to make it easier to use gene editing in the research and development of plants.
• Primary legislation to amend regulatory definitions of a GMO to exclude organisms that have genetic changes that could occur through traditional breeding methods or arise naturally (no timeframe provided).
• Consideration of measures required to enable gene edited products to be brought to market including traceability and consumer choice issues.
• The initial focus from Government is on plants, with no proposed changes to the current regulations surrounding research using animals. It is not currently its intention to alter the regulatory requirements for microorganisms.

Campaign urges vitamin D supplements during winter
Food Standards Scotland has launched a campaign urging people all ages to take a daily 10-microgram vitamin D supplement this winter. The promotional effort will run until February 2022, and aims to raise awareness of the important role vitamin D plays in supporting bone and muscle health.

EU: New Farm to Fork Strategy: MEPs adopted a resolution (452 votes in favour, 170 against and 76 abstentions) on the Farm to Fork strategy. MEPs welcomed the strategy but called for:

• mandatory EU front-of-pack nutritional labels
• highly processed foods with high salt, sugar and fat content to be addressed by setting maximum intake levels
• evaluating animal welfare legislation
• only allowing Non-EU animal products, if their standards are EU-aligned

New Trade and Agriculture Commission launched
The Government has announced the launch of the new Trade and Agriculture Commission (TAC), as part of the Government’s response to the previous Commission’s recommendations. Chaired by Lord Bartels, the new TAC will provide expert scrutiny of new trade deals once they reach the signature stage. The Government will also set out more detail on measures being introduced to support farmers, in response to recommendations in the original TAC report. They include a new cohort of international ‘agri-food attachés’ who will work to promote export opportunities for UK farmers and producers. There will also be a new Food and Drink Export Council to work in collaboration with industry and governments in Scotland, Wales and Northern Ireland to promote exports from all parts of the UK.

Government’s Net Zero Strategy published
On the 19 October, the Government published the long-awaited Net Zero Strategy. The Strategy was published alongside HMT’s Net Zero Review Final Report and Heat and Buildings Strategy as well as new guidance, consultations and consultation responses (totally almost 2,000 pages!).
Within the Strategy, the Government referenced:

• The upcoming National Food Strategy as means for supporting the delivery of Net Zero, nature recovery, and biodiversity commitments. They stated that they are committed to exploring options to reduce carbon emissions from food production, support innovation in the sector, incentivise land use change to sequester carbon, and preserve natural resources.
• There are several explicit references related to the agricultural sector – this includes a commitment to explore the monitorinag, reporting and verification of emissions from agriculture.
• A principle on empowering people and businesses to make their own choices which states that government will continue to explore the evidence base for environmental labelling within food production and disposal.
• They will provide funding to help local authorities in England prepare to implement free separate food waste collections from households from 2025. This section also referenced consistent collections, DRS, plastic packaging and the work being undertaken within WRAP’s Courtuald 2030 programme.

M5 launch long-term strategy to maximise potential of UK manufacturing
This week, the Manufacturing Five (M5) – a collaboration between the Association of the British Pharmaceutical Industry (ABPI), ADS Group, the Chemical Industries Association (CIA), the Society of Motor Manufacturers and Traders (SMMT), and the FDF – published a report entitled ‘Investing in advanced manufacturing is investing in levelling up’. This is the first joint report by the M5 which sets out a long-term strategy that puts manufacturing at the heart of the domestic and global agenda. The report sets out recommendations to the Government to maximise the potential of UK manufacturing to generate and sustain high value jobs and growth, focusing on five key areas including:

• Levelling up the whole United Kingdom – Develop the infrastructure, skills and incentives to develop new clusters of advanced manufacturing across the UK
• Achieving Net Zero – Enhance the industrial energy transformation fund to progress towards Net Zero
• Designing and maintain world class regulatory frameworks – Establish a coherent strategy for the UK’s regulatory approach for manufacturing sectors, that delivers a level playing field and maintains the highest standards of quality and safety
• Supporting international leadership and Global Britain – Place advanced manufacturing at the forefront of a long-term Export Strategy, developed with industry
• Building a science superpower – Expand incentives to attract significant R&D investment