Conference Presentation at Profiting from Sustainability in York (UK) Dec 2014

1. Agriculture Looking For A
Sustainable Profit
Richard Pearson
NFU Regional Director
December 2014

2. Population Up

3. Food Consumption Up

4. Life Expectancy Up

5. An industry with growing economic
contribution
£ million Increasing economic contribution: Gross
2000
2001
2002
2003
Value Added (GVA)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
Source: Defa, Agricultural Accounts 2013
• Agriculture’s contribution to the
economy as measured by GVA (Gross
Value Added) was £9.2 billion. This
has grown by £2.3 billion in the five
years to 2013 – a 34 per cent
increase.
• At the same time farm output has
grown by 31 per cent, to £25.7
billion.
• An impressive performance
compared with wider economic
picture.

6. Food and drink exports continues to grow
in 2014
Jan-June 2013
(£ bn)
Jan-June 2014
(£bn)
%
change
Total
Exports 6.2 6.5 4.8
EU 28 4.7 4.8 2.5
Non -EU 1.5 1.7 12
EU% share 75.6 73 -1.7
Non -EU %
share 24.5 26.2 1.7
Trade
balance -12.6 -12 -4.9
Source: Food and Drink Federation (FDF)
Food and non-alcoholic drink exports (£m)
£12.8bn
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Exports £m
Source: Food and Drink Federation (FDF)

7. Future Demand Looks Strong
What Is The Reality On Farm

8. Price falls across the board
Commodity Prices
Oct 2014
Prices
Prices a
year ago
% change
y-o-y
Dairy (ppl) 30.8 33.0 -6.6%
Deadweight Cattle (p/kg) 349.0 391.3 -10.8%
Deadweight Sheep (p/kg) 355.2 392.1 -9.4%
Deadweight Pigs (p/kg) 152.6 171.9 -11.2%
Feed Wheat (£/t) 111.3 160.5 -30.6%
Potatoes (£/t) 126.5 160.67 -21.3%
Source: AHDB/DairyCo/Bpex/Eblex/HGCA/PCL
• 2014 has been the year where across commodities, the industry has
seen falling farmgate prices.
• A combination of global supply and demand factors and continued
intense competition at a retail end has put a downward pressure on
beef, dairy and cereal sectors.

11. It’s all about volatility….

12. Basket of Commodities
0.0
50.0
100.0
150.0
200.0
250.0
300.0
1/1990
1/1991
1/1992
1/1993
1/1994
1/1995
1/1996
1/1997
1/1998
1/1999
1/2000
1/2001
1/2002
1/2003
1/2004
1/2005
1/2006
1/2007
1/2008
1/2009
1/2010
1/2011
1/2012
1/2013
1/2014
FAO - Food Price Index

13. UK Feed Wheat
25 230.0 210.0
190.0
0123 1201 2195 2034 170.0
150.0
130.0
110.0
90.0
70.0
50.0
3112 0280 1267 2022 1209 1087 2164 0231 1209 0167 1245 1092 2078 0146 1224 0210 2066 1043 2121 3108 0274 0113 0290 1278 2035 0112 0280 1268 0254 3100 1087 2165 2023 1218 0157 1234 210 2069 0145 1213 1391 0287 1043 Oct
ASeupg Juany M MFeabr M Jaonv N AOucgt J M A M Juunl Aparr DFeebc NSeopv Juugl Aapyr Jaanr DOecct ASeupg Juany M FAepbr Jaonv N SOecpt J A M M M J Juunl MMaayr DFeebc NOocvt Juugl Aapyr Jaanr NDoevc ASeupg Juany FAepbr DJaenc SOecpt Juunl MMaayr DFeebc NOocvt A AJupnr Jaanr M Juugl NDoevc ASeupg 2M Jauyl FAepbr DJaenc SOecpt J Juunl MMaayr FJeabn 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

14. Yorkshire Region

16. This Region Has
• 17% of cereal area
• 36% of pig herd
• 18% of cattle herd
• 27% of sheep flock
• Directly employs 41,371 people
• Agri Food Manufacturing base
• Research / Universities / Colleges

17. • There is no lack of advice to famers.
• Complex challenges ,Conflicting
messages
• Farm businesses often resource and time
poor
• Low confidence and high risk
• Personal motivation

18. • Stand still / self sufficiency will fall…
• Research, Innovation, Growth
• Growing home and global demand…
• What potential --- world market player?
• Opportunity…

20. Nothing is Impossible