Tinsel but no turkey? - The effect of the UK labour shortage on farming

Christmas is just around the corner — are you already thinking about what presents you’re going to buy or the food that you’re going to put on the table? Unsurprisingly, most of us opt for a turkey at Christmas, and in 2020, 54% of meat eaters favoured the festive bird for their Christmas meal. 

Last year we may have been panic-buying toilet roll in the midst of the coronavirus pandemic, but it seems that this year, turkeys might be flying off the shelves earlier than expected. This is because of the UK labour shortage that’s affecting farming. 

Agricultural products like turkey meat are classed as commodities and can be traded in the commodities market. Other assets that can be traded in this market include: 

- Coffee
- Wheat
- Gold
- Oil 

So, you could take part in oil trading on Plus500, for example, where you’ll be able to speculate on some of the most popularly traded commodities. 

The value of commodities can be directly impacted by a multitude of external factors, one of the main being a change in supply and demand. In this article, we will explore the effect that the UK labour shortage has had on farming. 

The effect of Brexit and COVID-19

The labour market has suffered from the effects of Brexit and the COVID-19 pandemic. As a result, the production of turkeys and pigs has been disrupted. 

This could mean shortages of the birds this Christmas, as the government has failed to sufficiently supplement the industry. This issue has arisen because international workers are unable to obtain visas to work in the UK following Brexit, and have also been affected by the border closures that were imposed to manage coronavirus transmission rates. 

The skills needed to work in this sector are highly specific. The average butcher has to train for 18 months in order to acquire the qualifications needed to find a job in the industry. 

The shortage of workers is not only centralised to the farming industry, as the UK also experienced a fuel crisis earlier this year. This crisis was not spurred by a shortage of fuel, but rather, a shortage of haulage drivers.

What is being done to solve the issue?

To help to combat the labour shortage, Britain’s biggest producer of poultry and owner of Bernard Matthews and the 2 Sisters food group, is hiring 900 temporary staff. This was made possible through the government’s introduction of the Emergency Visa Scheme, which enables 5,500 overseas poultry workers to find employment in the UK prior to Christmas. 

The scheme was introduced because the majority of food manufacturing employees had returned to their home nations, following the introduction of post-Brexit immigration regulations and COVID-19 restrictions. 

The temporary hiring of these foreign workers should help the UK until Christmas, and avoid national shortages of certain produce, like turkeys. Of course, this is a short-term resolution and in the long-term, it’s evident that there needs to be alterations to the visa scheme, to enable international workers to find employment more easily in the UK. 

It would seem that your dinner table will not be devoid of a turkey this Christmas. However, if you’re trading in the commodities market and invest in the likes of agricultural products, it’s important that you take into account the impact that issues like labour shortages can have on supply and demand. 

In order to trade in the commodities market successfully, you’ll want to keep up to date with news releases, employ an economic calendar, and use a combination of fundamental and technical analysis to inform your decisions in the financial market.