One of the biggest challenges facing us all is learning to cope with volatile markets. It's a subject that has come up a lot in discussions in the FW office in the last week or so in meetings with Mcdonalds, Dairy UK and The Grocer magazine and website.
If farmers can survive the market peaks and troughs better than they can certainly benefit long term from the great opportunities that lurk around the corner as we come out of this recession and take advantage of global demographics.
The dairy sector is probably the best example of this. Jim Begg, Director General of Dairy UK, is worried that some in the sector are in danger of talking themselves into an early grave over pricing. As more dairy farms decide to exit, it is clear that we're in danger of losing a lot of critical mass if we are not careful. This would be a tragedy as the longer term prospects for British dairy products are very good if we can just be more resiliant through the tough times.
Jim Begg believes there is more Farmers Weekly can do to build farmer confidence in sticking with it and seeing the opportunities that lie ahead. I agree that there is a future if only dairy businesses can ride out the tough times like now. We have to report the angst that's going on about milk prices here and now but we should do it in the context of the bigger picture. Global demand for milk is on a massive trajectory but we have to find new approaches to helping producers cope with the ups and downs. All ideas welcome.
It's certainly not all doom and gloom. Global population growth and economic expansion mean that demand for dairy products will remain strong. Weaker sterling means higher single farm payments and more competitive commodity production. With low interest rates, finance is cheaper than it's ever been and input costs like fuel and power are falling. UK consumers make up one of the most developed markets for food anywhere in the world. So there's more reasons for optimism than many might think.
To help you make sense of volatile markets, look out for Phil Clarke's business blog http://www.fwi.co.uk/blogs/agribusiness/2009/04/alarm-bells-ringing-despite-buoyant-meat-prices.html