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Welcome to the latest agri-market outlook – February 2024
AHDB’s annual agricultural market outlook aims to give a snapshot of market conditions and prospects across our sectors and for key input markets.
Staying abreast of market conditions is vital for modern farming and post farm gate businesses as the presence and threat of volatility can quickly change commercial circumstances.
Our outlooks across sectors and input markets have been designed to point to the key factors expected to influence prices through the coming year. New this year are our outlooks for fertiliser, animal feed and straw markets.
Overview
One definition of the word 'outlook' is "the prospect for the future". Over the past decade there has been a strong focus on short-termism, influenced by the Brexit vote, followed by no-deal planning, new trade deals, changes to farm support schemes, global pandemics and conflicts leading to a highly charged period of inflation.
Add into this wider government policy on food. The nature of election cycles does not match well with the long-term requirements of agriculture and farm planning, especially in election years such as 2024 where there is a strong possibility of a change in government, if you believe the current opinion polls.
So, what do all of these elements give us for a longer-term picture?
Society seems hooked on cheap, instant and generally highly processed food driven by modern consumerism stemming from digital technology and social media driving an "anything can be yours now" culture. This is coupled with supermarkets ferociously competing against each other for market share of this ravenous spend.
I have a lingering question in my mind on the matter of food security. Are we gambling with the loss of productive farmland versus supporting self-sufficiency?
An environmental, public-good-inspired support scheme in England through the new SFI scheme may yet remove productive land out of our self-sufficiency aims.
We have also seen a considerable increase in the costs of both business inputs and outputs food more recently, which is changing those consumer habits for a large proportion of the population who are now struggling to achieve something that would represent a healthy balanced diet built around affordable nutritious food.
Ultimately, this is a picture of the demand pattern being stretched and being met with a domestic supply side under risk of erosion from unpredictable climate, higher costs and environmental schemes implemented in isolation from food production.
Something must give.
Unfortunately, it is likely the poorest in society, both from an income but also nutrition perspective that will be made to pay. As wealth inequality becomes more polarised in society, will food?
So what is the prospect for the future? Is it bleak or, is it an opportunity for the farming sector to combine all these factors into a positive force that can provide a true public good: domestic, sustainable, nutritious and affordable food.
This leads nicely to another definition of the word 'outlook’' which is "vantage point". A point where we stop, reflect, set plans and find a route. What will we want to say in 10 years from now looking back?
That we used this vantage point as a reference to change, or we looked, saw and allowed the prospects for the future to define us, rather than us define them?
Sector outlooks
Farm inputs outlook
Economic outlook
The UK saw significant economic unrest in 2023 with high inflation and interest rates, while the cost-of-living crisis was a major concern for consumers and businesses. Are we to expect better news in 2024?
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It should be noted that the information in these outlook reports is based on information currently available but still involves risks, variables and uncertainties. Agricultural markets are highly volatile, often unpredictable, and unforeseen factors can have a major impact on production and prices. Consequently, no guarantee is given to the accuracy of the outlooks, but they are simply put forward as our best estimates at the time of publication.