How will the recession impact on farming?
We've had some discussions in the office this week about this and are picking up quite a bit of conflicting information. On the one hand, there is talk from the retailers of consumers trading down. One farmer told us that one major store group claimed it could sell mountains of mince and cheaper cuts of meat but premium legs of lamb and joints of beef were harder to shift.
On the other hand, reseaarch by the Institute of Grocery Distribution claims that shoppers may be economising but they are not compromising on their values. They have evidence that more people are buying local food, Fairtrade products or lines that promise high animal welfare standards. Smart shoppers are putting more effort into maintaining the quality of what they eat. This must be good news for farmers.
Certainly, while food shopping last weekend I didn't notice any big customer rejection of expensive joints of meat. Although I did spot a couple of comments from men telling their wives they thought the meat on display was too pricey but isn't that the norm? I'm not convinced that is just about attitudes to the looming recession.
Anyway, the FW team willl be watching this closely and collecting examples of how the downturn is impacting on farmers. We are currently working on a story about the attitude of the banks at the moment and concern that Barclays has put up overdraft rates without much prior warning.
Our Management Matters farmer Martin Howlett was one of those affected. His overdraft margin was increased by 0.5% to 2.75% over base. Others have seen increases of 1-1.5%. Martin was rightly concerned because of the impersonal way Barclays wrote to him. They sent an unnamed letter and did not discuss it beforehand. It's always the little guys that get hit the hardest........