UK: M&S predicts price hike as weather hits crops
Unfavourable weather has meant crops have either stopped growing or have not developed properly
Marks and Spencer has said it expects the extreme weather conditions in the UK are likely to have an affect on crops, potentially leading to a spike in prices.
The weather in the UK has fluctuated in recent months with unseasonably high temperatures in the spring causing crops to start growing earlier than usual. This has been followed by a plummet in temperatures and persistent rain, which has meant crops have either stopped growing or have not developed properly, according to a number of reports.
Speaking to just-food at yesterday's (10 July) Great Yorkshire Show in Harrogate, in the north of the UK, Steve McClean, head of agriculture & fisheries for M&S said the agricultural industry is beginning to notice the effects of the poor weather conditions.
"The weather throughout the UK has been unusually variable and we are starting to see some fairly major effects to the various supply chains and that's not just about crops that are grown but crops that are grown as animal feeds too and there'll be an impact through the back end and winter.
He added: "It's going to affect everybody and will have an impact on prices. It's difficult to see how it won't when you consider how the effects on yield are going to happen. So I think we will see some price spikes as a result of the weather."
McClean was speaking as UK retailers Asda and Morrisons were targeted by local dairy farmers who were protesting over cuts to milk prices on the first day of the show. The two retailers were singled out because although they pay a premium to their farmers for their milk, their farmers' price is linked to the price the processor pays.
McClean, however, said M&S is in a "privileged" position with regard to milk prices by operating its own supply chain model, through which it is currently paying one of the highest prices for liquid milk on the high street.
"At M&S we're in a very privileged position," Steve McClean, head of agriculture & fisheries for M&S told just-food. "Over 12 years ago we established our own dedicated milk supply chain [Milk Pledge] and we have four regional pools of farmers that supply liquid milk into the M&S business. We recognised way way back that farmers needed to have a sustainable price, that gave them and their bankers to invest in the business, that allowed them to improve their animal welfare and farm production standards because that's what our customers expect.
He added: "So M&S introduced Milk Pledge and we're very proud to be in a position where we are currently paying 32.46ppl, which is the highest price paid in the high street today. That price isn't just dreamed out of the air, we have an independent model that takes into account producers costs of production, takes into account in particular, fuel, fertiliser and animal feed costs and ensures that we actually set a price that allows farmers to invest, so there is a lot of noise around milk pricing, quite justifiable noise, but it's not around M&S' supply."
The cuts have caused widespread anger amongst dairy farmers who are facing a reduction in the price paid for their milk from some of the country's largest dairy processors.
Dairy farmers from across the UK will be making their way to London today for a meeting at the city's Westminster Central Hall. The two-hour meeting is expected to highlight the despair felt at the recent price cuts, which have resulted in an outcry from dairy farmers, with the NFU calling the situation "catastrophic".
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