The most resilient supply chains are those sharing risk rather than letting it sit with the farmer and we're starting to see processors and retailers recognising that climate risk threatens their security of supply too. That is driving a shift towards more collaborative relationships along the supply chain with everyone taking a fair share of both risk and reward.

The contracts and partnerships delivering the strongest outcomes are increasingly focused on technical support, resilience-building measures and long-term relationships rather than commodity pricing alone. While sustainability-linked or regenerative agriculture contracts often attract attention for the premiums they may offer, their greatest value frequently lies elsewhere. Reduced risk, greater business stability and access to support during difficult growing conditions can have a far greater impact on farm performance than a modest price uplift.

Businesses such as McCain, Arla and Matthews Cotswold Flour demonstrate how different parts of the supply chain are investing directly in resilience through soil health initiatives, water management projects, regenerative farming practices and on-farm trials. These investments do not eliminate the effects of drought and extreme heat, but they can significantly reduce the impact of climate extremes on production.

The importance of water management – the water hierarchy

While collaboration provides the framework for supply chain resilience, on-farm action remains critical for food production. Decisions around which crops are grown where, and how water resources are allocated across different farming systems – a water hierarchy - are no longer restricted to a few geographical regions.

For combinable crops, are there lessons to be learnt from farming systems elsewhere such as those operated in dryland Australia. Likewise, some regenerative farming actions have a role to play here. Soils with higher organic matter generally have greater water-holding capacity, allowing crops to access moisture for longer during dry periods. This season has demonstrated that clearly, with cereal yields on many heavier soils proving more resilient than expected where moisture was retained throughout spring and early summer.

At the same time, there is growing recognition that investment in land drainage is just as important as investment in water storage. Effective drainage is often associated with managing excess winter rainfall, preventing soil damage and avoiding delays to drilling. However, well-functioning drainage systems can also support crop performance during dry conditions by encouraging stronger root formation and improving the movement of water through the soil.

Alongside drainage, greater investment in reservoirs and on-farm water storage will be critical if growers are to maintain productive and profitable rotations. The contrast between irrigated and unirrigated crops this season has been particularly evident in potatoes and other root crops, where access to reliable water supplies has often determined the difference between acceptable performance and significant yield loss.

Similar patterns have emerged in crops such as vining peas. Earlier-drilled crops generally benefited from timely rainfall and progressed through flowering before the most intense periods of heat arrived. Later-drilled crops, by contrast, have struggled to achieve the same outcomes, highlighting the increasing importance of establishment timing and crop development to maximise yield.

Success will increasingly depend on focusing on the controllable factors around cropping, soils, water management and costs while building stronger and resilient relationships along the wider supply chain.  

Further information

Contact Georgina Sweeting, Ashley Lilley or Ed Horton

Food Spotlight on: Working supply chains