SPRING is the season of renewal in the countryside. Crops are planted, lambs and calves arrive, and farmers, apart from the hardcore cynics, look forward with a sense of optimism as the days become progressively longer.
The past decade has been a particularly tough time for the industry, with escalating costs and static, if not falling, returns. However, I genuinely believe that better days lie ahead and that farmers are cautiously optimistic that their efforts are
now being more widely appreciated by the general public.
Talking to farmers only serves to reinforce that opinion.
Too many forget that the food and drink industry is Scotland's leading export earner, with annual sales nudging towards £3 billion. Farmers are the stewards of 75 per cent of the Scottish land mass, while livestock production accounts for 57 per cent of gross agricultural output.
This is a big industry and one that is showing signs of revival after many years of depression.
There have been a lot of positives during the past 12 months, not the least the reopening of the beef export market. That was never going to be an easy nut to crack, but since last May, export sales of Scotch beef have topped the £10 million mark. That is still a long way short of the £120m annual trade before the ban was imposed in 1996.
But progress is being made and the market will continue to grow. Having travelled extensively in Europe during the past year, I can aver that the reputation of Scotch beef stands supreme.
I also believe that beef producers are now better at addressing market demands than they were ten years ago. The product is generally much more consistent.
Of course, they would like higher prices, and that may come sooner rather than later as the realisation dawns that global production is struggling to meet demand, especially in the emerging economies of the Far East. The world's population is set to reach nine billion by 2045 and by then it is reckoned that Brazil will be the only country with an exportable surplus of beef. It is easy to forget that as living standards rise consumers want to eat more meat and that beef is close to the top of the menu.
Arable farmers have planted their crops in recent weeks with a degree of confidence lacking for many years. World stocks of cereals are at their lowest in living memory.
However, the real driver in the grain market is the rush to produce biofuels to ease the pain of importing expensive oil from the volatile Middle East.
Few traders are willing to stick their necks out and predict just how much a tonne of wheat will be worth come harvest time. The only certainty is that it will be higher than last September.
Even the malting trade has finally grasped the fact that unless farmers are offered a decent trade then very little barley will be grown. This spring has seen many farmers who packed in growing malting barley a few years ago return to producing a crop that ranks among the very highest quality in the world.
Scots may drink less whisky than in former times as the younger generation turn to white spirits, but the overseas demand for a dram or three is booming.
Dairy farmers have not had their troubles to seek in recent times and the total number of active producers has more than halved in the last two decades.
Low prices have forced many out of production, but the reality is that there has been remarkably little change in the number of cows being milked. Scotland now has by some margin the highest average herd size in the EU, with that figure in the region of 135 cows.
Recent modest increases in the ex-farm price of milk could well be an indicator of a brighter future, but the gap between what the farmer is paid and the price demanded of consumers in supermarkets remains far too great. If farmers were to receive an additional 3p for every litre they produce I doubt that consumers would even notice.
The intensive pig and poultry sectors are now in relatively few hands. Returns have been reasonable, but the problem producers now face is the rising cost of feed. A sharp climb expected in coming months will put a squeeze on margins unless retail prices rise to compensate for this added burden. My guess is that they will, if supplies are to be maintained.
The national sheep flock remains in decline in numerical terms, but those producers who have departed the scene tended to operate on some of the least productive Scottish acres. However, prices will tend to rise, especially considering that the decline in the total EU sheep flock has been even more pronounced than that of the UK.
But perhaps the most remarkable feature of the past year has been the phenomenal rise in land prices. Savills, the estate agents, recently said the price of an average Scottish acre has increased by 17 per cent since last spring and that the majority of buyers have been farmers, albeit with a fair number migrating across the Irish Sea. Land is a great investment simply because the supply is finite, but tenant farmers will be hoping that their landlords do not use this as an excuse to jack up rents.
The fortunes of the farming industry tend to come round in cycles, usually of about 20 years in duration. The past 12 months has been a better period for most and there is no reason to suppose that this trend will not continue - so let us all enjoy this spring.
The full article contains 956 words and appears in The Scotsman newspaper.
