Clicks & Country

26:24Here's what Kath and Sarah made of what they heard. First of all, I did welcome the apology from both officials and I did get the feeling that that was heartfelt and meaningful, which was really welcome. For me personally, I didn't get any assurance that my case would be looked at. It genuinely appears that Kathar had a complete lack of understanding of what they were inheriting. From my perspective, although it doesn't necessarily include me, I think their focus is absolutely on the right things in terms of the priority cases and dealing with the death in service and the ill health retirements and those in hardship.

27:00It remains completely unclear when I'll receive my quote, possibly at the end of March, but I don't know if that's the case. Sir Geoffrey Clifton-Brown, the Conservative Chair of the Public Accounts Committee, told Moneybox a lot is riding on Capita, turning this around quickly. I think the only way that Capita can restore trust, and that's what it's all about, is by actually delivering on these promises and getting the systems that they say are up and running by the end of February and the others up and by the end of March. If we're still here in three or four months' time, I think that will create a dreadful, dreadful impression.

27:35So Capita now have a real challenge to get the trust of these pensioners back. That was Dan Whitworth from Moneybox with that report. Wake Up To Money from BBC Radio 5 Live. Hello, thank you for tuning back in to Wake Up To Money. If you've been up with us since 5am, if you've only woken up and you've tuned in, that's okay as well. That's fine. We'll let you give you a pass. As long as you're listening to Wake Up To Money, we are happy. With me this morning is Julian Boite, founder of health and beauty brand Yandy Skin and Zoe Gillespie, investment manager for Orr BC Brewing Dolphin. Now, we are going to be talking about the Royal Mail a little bit later on in the programme.

28:14We'll be taking a look at what's been going on at the Royal Mail. Hundreds of you have been contacting the BBC about Post being late and that missed appointments and important correspondence. She got a text in here saying, I just paid£9.25 for Royal Mail guaranteed next day delivery. Important sign documents. Delivery never made so far after. We kept to start all over again. What a joke, Dave and Brum. Well, Dave, listen, we're going to be talking about that a little bit on. You can get in touch with us. text 85058 or WhatsApp 08085 909693. And if you're listening to us on BBC Sounds or the podcast, just use the hashtag WakeUpToMoney on social media.

28:56Julian, that has been a problem for you, you were saying earlier, but you use different providers, not just the Royal Mail all the time. Yeah, yeah. So typically when we first started the brand, we wanted to give customers the opportunity to actually choose their provider, but just found that it was a little bit of a logistical nightmare, especially online we want people to pick the products that they want to buy online and check out immediately so we opted into just stand a standard mail being what we would use for royal mail but i think what we're seeing is we're witnessing the decline of the letter so royal mail is effectively saying if you want it fast you have to pay a first class premium so by moving you know second class to every single day we're kind of admitting that the 500 year old daily delivery model is financially dead.

29:41And I think that's what kind of we're seeing, even from a business perspective, that just customers need things. The Amazon kind of model has really broken things. People need things quickly. So it just doesn't work anymore, I'm finding. Yeah, maybe we need to reduce our expectations, perhaps. Well, Julian, listen, we're going to get to that later on in the programme. We're going to talk about farming now because weeks of wet weather has been taking its toll on arable farmers across the UK who've been left with land underwater and ruined crops. And that misery comes as dairy farmers are facing further cuts to milk prices and that's following a global oversupply issue.

30:20Let's first speak to cattle and sheep farmer Cameron Farquharson in Pendle and Trent Hyde in Dorset about what problems the rain is causing. Cameron, good morning. Good morning. How are you? Good. How are your fields coping with the rain? Oh, it's mud bath. That's all I can say at the moment. We've had up till Thursday 41 continuous days of rain since Christmas on these fields. And it's just a mud bath. The grass is just sat in a bath of cold water. The cows, we've got natives, we've got Highlanders, Highland cattle. And the cows, you can see they're just kind of sick of it. You know, there's constantly rain.

31:01and same with the sheep. We've started lambing a little bit early than we wanted to, but these things happen and we're having to bring them in to look after these lambs because the fields are just sodden. That's all I can describe. It's just like thick mud. Yeah, I mean, it's quite the opposite from the summer scorcher we had last year. And it's interesting, farmers are probably looking for rain, but this is just too much. Yeah, of course. You need the water levels to come back from that extreme heat that we had last year, which again, the grass got affected because it got burnt off. We didn't have, in peril, we had no rain from the 27th of February till the beginning of September.

31:43So we had six months with no rain on the farm. And of course, that affected the grass. The grass growth. We couldn't get the cuts in the field. We got one cut and that was it. So any haylage that we did make was used up in the summer months on the cattle and on the sheep for feeding. My biggest concern now is... Oh, I think we may have lost Cameron there for a second. Zoe, I'm going to bring you in on this. If UK crops fall because of flooding, does that automatically mean higher food prices sometimes? Well, I think it does potentially lead to higher food prices because, as you say, the input costs then become more expensive.

32:26And we have seen that certainly in the last few years when crop prices do go up, it has led to food inflation. So it can be a worry if something like this is longer term instead of just a temporary issue. And do we know how exposed British supermarkets are to domestic production shocks like that? I think we've seen that certainly throughout not just the UK and certainly, but other kind of if there's something that kicks into Europe as well. And I think we've seen weather fronts just through European countries too. So how exposed we are would probably be product to product. But certainly, given that we've just had high inflation, and certainly from a consumer's perspective, if we start seeing higher food prices, then it does impact the cost of living.

33:10So it is something that can be quite a widespread problem if it does actually start to materialise. Well, I think we have Cameron back now. Cameron, you haven't been swept away by the weather, have you? No, that was me just building the ark. Listen, let me on. Let me on. It's really been a horrible couple of weeks in terms of rain. I mean, you were just talking before you got cut off about how to feed your cows and sheep. Well, actually, how are you feeding the cows and sheep? Because you're not getting those crops. No, we're not getting the crops at all. Like I was saying before there, the grass that is there is obviously underwater at the moment.

33:50So we're feeding haylage. And I'll give you an example of prices. So this time last year, we were paying£27 for a four-string bale of hailage. Now we're up... Oh no, Cameron! No! Oh, listen, I think maybe we'll bring in Zoe again. I mean, from a market's perspective, when you've got climate volatility like that, because a lot of people are saying like this is the new normal. Are we just looking at higher prices in general? well we have actually seen uh certainly inflation in the last four years being a dominant factor we haven't seen prices coming back down we've just seen the rate of growth slowing so i think higher prices and certain products are here to stay and i think if you go shopping and you look back to what we're paying for certain items um you know less than a decade ago you can see a material uplift in prices and i think that is something that um as you say with this volatility and climate, these things are going to be more exposed, our costs are going to be more exposed to these extreme weather events.

34:51Well, let's talk about prices for dairy farmers because dairy farmers across the UK, they continue to face further price cuts, actually, as an oversupply of milk continues both at home and abroad. Major dairy buyers like Arla and Muller, they've cut their prices to around 34 pence per litre. That's an average price this time last year, which is around 45 pence. And last month we spoke to Paul Tompkins, Dairy Board Chair at the National Farmers Union. The vast majority of dairy farms at the moment are being paid less than it costs to produce milk. On my farm, every day that I milk my cows, I lose about£1 ,000.

35:31That's a significant amount of money to be swallowing each and every day and something that can't continue. I'm joined now by Becky Ray, head of UK corporate at Kite Consulting, a UK-based agricultural consultancy specialising in the dairy sector. Becky, good morning. Morning. Thanks for having me on. Is it fair to say volatility, it's increased fairly quickly? I suppose volatility is not necessarily something new for farmers. So whilst it's incredibly difficult for farmers to manage volatility in the business and for the wider dairy sector as a whole, it's not something that we're new to managing.

36:13Now, comparing the price from this time last year, I mean, those swings, how do dairy farmers deal with that? Even though you're saying volatility is quite normal for them, but surely that has to affect their bottom line. It does indeed affect the bottom line. You know, anybody who's managed a business and listening to Paul earlier, I know Paul pretty well, it's really difficult to manage a business through a loss making period. And we can't just, farmers can't just turn the cows on and off but they can adjust certain dials which sort of impact the profitability of the business or the milk output of the cows.

36:54And so we have to start pulling some of those levers at times like these. What about this upcoming spring flush this year? This is historically a time when milk production is at its fullest. Is there a risk that farmers will end up throwing milk away or letting it go to waste because of that? We certainly hope not. And you're exactly right. Spring is the year or the time of year when we tend to have, as a GB, higher production than some of the other times of year. but I suppose we don't also have stainless steel or tanker drivers or personnel just sat in the wings. You know we're in a time of substantial overproduction like we've not really seen all that often and so it's going to be really tight for processing capacity this spring.

37:49Now little Birdie has just told me that Cameron Farquharson is back with us. Now Cameron you're a cattle and sheep farmer, but can you relate maybe to what's going on with the dairy or are you just completely the opposite? No, we can relate to what's happening in the dairy sector. I mean those guys are going through the mill at the moment losing money hand over fist where for us it's feed prices. We've got no control over the feed prices at the moment. Like I was saying before we cut off, this time last year we were paying between £25 and£27 for a bale of haylage now. We're up towards £65 and£200 a ton on straw.

38:31And then you take your day-to-day living costs. You think to yourself, why are we doing this for? Is it viable? We are diversified. So we've got Highland cattle and we do something called the Hay to Cow Experience where we have folk, guests, paying guests come on the farm and come and stroke these lovely animals. But we've had to cancel the last four Sundays when we do them because of the weather and that's£1 ,000 a day gone. That's£4 ,000 we've lost on the farm, which is a massive income for our farm. I mean, we have 250 breed mues and just short of 80 Highlanders and they take a fair bit of feeding and you can appreciate at the moment we're lambing.

39:14So, you know, you've got pet lambs, you've got colostrum to buy, you've got milk powder, which is all expensive stuff at the moment. Those prices are going up, but we're not getting a fair price sometimes in the market. You know, we're market dictated on our store lambs. So it's hard going, but one thing we're sure of, the British farmer, we're very resilient and we'll take this as another step on. Well, that's what Becky was saying. She just said volatility, that's essentially the theme of what we're talking about here, isn't it? Whether you're a dairy farmer, you're an arable farmer, whatever it is, it just seems like that's something you're going to have to deal with and perhaps that's the new normal.

39:54Yeah, I think it's the new norm. I think the extreme weathers is the new norm. It's happening. You know, climate change, global warming, whatever you want to call it, it's happening. And as farmers, we're seeing it on the fields. We're seeing it on the ground. Yeah, but as I was saying, we're a very resilient bunch and whatever's thrown at us, whether it's the weather or the government, we'll just get on with it. Becky, a lot of people listening, we're all consumers. We want to know what the price of milk is going to be. What is the forecast looking like further ahead? well i'm not an expert in consumer behaviors but but when i speak to those guys who are they tend to tell me that the consumer want stability in pricing um and particularly in the dairy category so whether we're talking about liquid milk or whether we're talking about dairy products cheese and yogurts you know my understanding is that's fairly inelastic in in price when it comes to the consumer.

40:51So in my experience, the price of milk on the shelves or the price of dairy products on the shelves is fairly unrelated to the price that farmers get paid. So we don't tend to see prices go up on the shelf and consumers pay more when higher prices have been paid to the farmers. But likewise, we don't necessarily see the price on the shelf come down either when the reverse is true and at times like these. I'm sure it's extremely difficult to stay in that industry. Are you seeing people leave it? We're not yet seeing. So I suppose, go back to your question about volatility. We're fairly accustomed.

41:29And as Cameron pointed out, farmers are extremely resilient and they structure their business, tend to try and manage this volatility as best as possible. So we haven't seen an unusual amount of exits from the dairy sector yet. And I suppose the answer to that question will depend on how quickly prices recover. You know, it's in nobody's interest, the whole dairy sector's interest, for these low prices to continue for an extended period of time. And so the sooner we can get that supply and demand back in equilibrium, the quicker prices will go up. All right. Becky Ray, thank you so much for joining us, head of UK Corporate at Kite Consulting.

42:13And also thank you so much to Cameron Farquharson, a cattle and sheep farmer who was very patient with us and came back on the programme. Thank you so much to you both. I had a couple of texts in on this actually. how can I assure that I pay a fair price for my milk? I would like to support our farmers, Gillian and St Albans and also from Anne Milligan and Soloway. It's a sad state of affairs when the government puts all money and resources into welfare and leaves the farmers to the wolves. Julian Boite from Yandy Skin. Julian, you work with farmers, don't you? Is this ever an issue for you that actually what's happening with the weather will affect what your suppliers are either giving you or the price that they're charging.

42:59Yeah, you know, it's really interesting to hear it from the perspective of the UK because it's the same thing that's happening in northern Ghana where we source some of the raw materials, in particular for shea water. So we're finding that same kind of issue with farmers. It's a triple threat between climate change and just everything else that they're having to go through. So it's just really interesting to hear from a different perspective. And so when that happens, do you have to charge the customers more or do you kind of dig it around? No, it's the exact same thing. Yeah, it's the exact same thing.

43:36So we keep the price of our product the same, but it does affect the premium that obviously we pay. So we pay a premium to our female farmers and then we kind of absorb the cost just because we can't continue to kind of increase our pricing for our customers. Our customers want to kind of continue paying the same price. Zoe, I think one of the overall themes here as well is just climate change, right? The volatility. I'm sure farming isn't the only sector that is hit by this a lot. Yeah, I mean, I think climate change is impacting, as you see, so many areas. And I think it's how we are able to adjust to it.

44:11And I think certainly from a consumer perspective, we've seen a lot of volatility in prices. And I think certainly it's how we're able to stabilise that from an economic perspective as well, because I think we are seeing, as I say, the cost of living has been a huge thing that has impacted on people and able to forward their lifestyles. And I think certainly climate change is becoming, I think, certainly something we're seeing more and more of is having an impact on so many areas of day to day living. So I want to ask you about this story, BrewDog. I don't know how you've seen it. That's the Scottish craft brewer.

44:49It could be broken up after calling in consultants to seek new investors. And then you've got the pub operator Green King. It's also reviewing costs with potential job losses on the table there. I guess another industry that's quite volatile at the moment is the pub industry. I mean, with BrewDog, what happens to that brand when it's essentially been built on its independence, that it's a craft brewer? What happens if private equity or a larger chain steps in there? Well, I think the thing we're seeing with, as you say, with the pub and brewery sectors, it's just been this real decline in craft beers.

45:26and certainly the soaring costs of bringing pub businesses has really impacted. So I think what they're trying to see is, I mean, I think it was revealed last year that almost 2 ,000 pubs had stopped stocking its beers as they're trying to narrow the ranges and I think certainly costs have been a huge impact. So I think the company's trying to obviously look for its future and we're seeing this, excuse me, across certainly the pub sector that increase in wages and certainly increasing costs is having an impact for us. we're starting to see the younger generation not drinking as much as well. So it's longer term whether this is going to impact on, I think, social trends as well and whether we are actually going to see that reduced numbers of people are drinking and it's going to impact the sector more.

46:11Julian, do you find that as well? I have a lot of conversations with people about how they don't want to drink anymore and they're going long periods, whether there's 100 days, 150 days, just without drinking, just to challenge themselves. Perhaps they're more into skincare these days. I like to think so, at least I hope so, and kind of just general holistic wellness. But we are seeing it. I think even in the beauty industry, what's been interesting is to see that kind of shift towards holistic wellness as opposed to just kind of finding a topical product that helps you fix your spots and blemishes.

46:42It's actually more of an inside-out approach to health and well-being. And I think kind of cutting drinking and going prolonged periods without having alcohol kind of contributes to that. All right. I've been talking about this for the whole programme. We're going to talk about it now. Royal Mail, in recent weeks, hundreds of you have been contacting the BBC about Post being late. And with that, lost bank cards, missed hospital appointments or fines and parking tickets arriving too late to pay. The regulator has fined Royal Mail in recent years for failing to deliver first and second class mail on time.

47:16Last April, the company was bought by the EP Group, owned by a Czech billionaire with the promise of putting consumers and the staff at the heart of the operation. BBC, your voice has also been contacted by current posties who want to explain what's been going on behind the scenes. And they spoke to our correspondent, Coletta Smith. Day in, day out, we are not getting all the mail delivered. This postie has been doing his round for years. I get paid to go for a walk and you think you're adding something back. He's one of more than 20 Royal Mail staff we've been in touch with from different delivery offices across the UK who've told us what's happened since Christmas.

47:54Backlogs of mail, rounds going weeks without being taken out when staff are off and the constant pressure to deliver more parcels. We've had to use an actor to revoice this conversation because he's worried about the ramifications of speaking out. Royal Mail had taken its core asset, the postie, for granted. So to explain to customers then who are saying, why is my post only arriving once every other week? Why are all my first class letters late? Because there's too much of it and because we're prioritising parcels and don't give us the resources we need to do a proper job. And when you're making a choice between do I take out these parcels or do I take out this mail, it might be first class, it might be second class, how do you make that decision?

48:42Parcels are always prioritised, provided they're tracked. And if they're not tracked and they're small parcels, they often get left behind. If they're small parcels and they're first class, then that is supposed to take priority over second class. But the truth of it is, if there's a large parcel at second class, we take it because we don't want it in the delivery office getting in the way the next day. Compared to the previous years that you've been doing this job, how does this Christmas compare? It's by far the most chaotic and disorganised. There were so many parcels that we were physically on.

49:20I can think of two days in our office where no mail was even sorted because it was all hands to sorting out and delivering parcels. Have you ever had a day before where literally no mail was sorted? No, no. That was a first. Has anything got any better since the new company took charge of Royal Mail? Not that I can see. I can identify some things that have got worse. We all know how bad it is. We've got managers that we work for know how bad it is, who agree how bad it is. A week ago, Royal Mail decides there will be no paid overtime. Royal Mail management, senior management decides they would rather fail to deliver items to save on the overtime.

50:03Royal Mail told us the vast majority of mail is delivered as planned. It says adverse weather alongside higher than usual sick absence has caused some short-term disruption to certain routes. It says where a delay affects a route, we work to restore it as quickly as possible by putting in extra support and reviewing performance daily to restore deliveries. But the posties are telling a different story. The general public is being let down by a service, or rather a business, There used to be a service. That report from Coletta Smith. Now, we've had a text in from a retired Royal Mail manager. He says, I can assure you that preference is given to tracked parcels over first class and even special delivery items.

50:49Don't blame the postie. It's all down to profit. G.T. Zoe Gillespie, do you think that that is the problem from an investor's perspective? Is that exactly the pressure that Royal Mail is under? they're you know they're looking to be more profitable i think that's that's one of the factors that i think we've seen the parcel business has been more profitable but i think certainly years ago when set up i think that there was less parcels being delivered and i think we are seeing more people doing online shopping so i think it's a changing dynamic in the business too so years ago it was just a letters business now it's it certainly has the parcel side too so it's how they adapt to change and at the moment um it seems to be that like this if it's having an impact on service then it's it's how they turn it around and are able to to restore confidence in the business but there is so much competition as julian pointed out earlier there's just so many different ways to send parcels these days there is and i think it's as you say it's how they look at the margins of that to compete but um there are so many different ways but they have to like anything, if you don't deliver a good service, you're not going to be able to compete.

51:56Got to cover the overheads. We have a text in on this. Have a shop, the postman who comes in my shop delivers to my shop. Also, when he has his holidays, like three, last three weeks, three days off, no one covered his route due to staff shortages when he came back off his holiday. There was three days of mail waiting for him. That was from Anon in Wales. All right. Lots of text in on that. that. Thanks so much to Julian Boite and Zoe Gillespie.

52:49Live commentary of every match on BBC Sounds. I don't think he has the try. Just a stunning score. One of the all-time great tries. The Rugby Union Weekly podcast will be daily throughout the tournament with all the best insight and analysis and the biggest names in the game. The Six Nations. Listen on BBC Sounds. Hi, I'm Frances Rye. And I'm Anne Morris. And we are the hosts of a new TED podcast called Fixable. We've helped leaders at some of the world's most competitive companies solve all kinds of problems. On our show, we'll pull back the curtain and give you the type of honest, unfiltered advice we usually reserve for top executives.

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53:46Amen.