Scotland-Farming a general picture and experts opinion.

FROM Melrose to Inverurie during last week presented a grand opportunity gauge the physical state of Scottish farming at this critical time of the year. My impression is that the vast majority of spring barley is now in the ground, but I suspect that the crop area may be down as farmers react to the uncertainty of prices.

The malting trade has been reluctant to come up with meaningful contracts and, despite fertiliser prices having fallen from ridiculous levels, there will be little profit in a crop of spring barley. Better, some argue, just to leave the land fallow.

Lambing is now under way and while some ewes are a shade on the lean side, initial reports suggest a decent crop will ensue. For those producers still selling last year’s lambs, prices have boomed and the very best are making over £100 per head with some fit old ewes not far behind that level.

But I still suspect that we are heading for a further reduction in the national flock. The lack of labour is certainly an issue for many, but that is as nothing compared with the proposals from Brussels that every sheep will have to be electronically identified from the end of this year.

The issue was discussed at last week’s council of agriculture ministers, but only under the heading of any other business – something of an insult to British and Irish farmers for whom this topic is of immense importance. Nothing concrete was agreed, but the proposal remains on the table. Firm decisions will have to be made soon. The cost of tagging and having the appropriate technology will be considerable, but it is the nonsense of insisting on EID, which is the real problem.

The industry cannot go back to the days prior to the disastrous 2001 foot-and-mouth epidemic, when the disease rapidly spread throughout the country and even to mainland Europe because there was no system of traceability in place. That has all changed and a perfectly robust batch system of sheep tracing is working well. Why saddle the sheep sector with a new system which may not be foolproof?

THE purpose of my trip to Inverurie was to attend a briefing at which Brian Pack, the chief executive of the ANM Group – Scotland’s largest farmer-owned business – revealed the results for the last financial year. The trading profit at £909,000 was well down on the previous year and the £1.7 million posted in 2007. But Pack was content with the figures and quick to point out that, in difficult times, an additional £410,000 had been added to the reserves. I tend to agree. The big problem in the past year for ANM has been the dramatic increase in the value of cattle at point of slaughter.

This has been largely driven by a shortage of supplies and it certainly did not help Scotch Premier Meat, which posted a loss of almost £200,000 against a profit of £379,000 in the previous year. That is a massive turnaround in the fortunes of a well-managed business at the premium end of the market.

One obvious solution is to pay less for cattle, but that just will not happen because competition in the abattoir sector is intense and plants are keen to maintain throughput.

The second answer is to persuade supermarkets to pay more, but that will be extremely difficult. Scotch Premier will survive and prosper once more, but I would not be too surprised if there was not at least one major casualty in the meat processing sector before many months elapse.

As for Pack himself, retirement looms in April after 19 years at the helm of ANM. He is a remarkable character and an astute businessman.

When he became chief executive, the company was little more than an auctioneering business with an interest in the meat trade operating from a brand new centre at Thainstone on the outskirts of Inverurie.

The transformation has been nothing short of phenomenal with the development of a wide range subsidiaries. Thainstone has become the hub of the rural economy in the North-east, where something always seems to be happening.

I well recall back in 1990 making a Landward programme for BBC Scotland featuring Thainstone and the new United Auctions premises in Perth, both of which opened around the same date. I did not say it on screen, but I thought then than Thainstone, though less aesthetically pleasing, was a superior design. Time has vindicated that opinion.

Perth will close later this summer and all business will be transferred to new premises outside Stirling. Incidentally, I am reliably informed that work on the new centre is on schedule and the design is well suited to the industry’s needs .

And so its goodbye, but certainly not farewell, to Brian Pack. The industry has greatly admired his vision and his ability to consider all options.

One thing is certain: his retirement will not be of the conventional nature. He is building a new office at his home from where I suspect he will soon be acting as a consultant.