Friday, November 14, 2008

Recession Era Supplies

I've been debating for a few days where to post this article - here, on my house-and-garden blog, or on my livejournal. I've eventually settled, as you can see, on posting it here, and I'll probably link to it from LJ, because I want to hear people's opinions on this.

Ireland officially entered a recession a couple of months back. So far, this has made little enough difference in areas immediately visible to me - one friend was made redundant, another was refused a car loan, and that's been about it. But assuming this continues - and it almost certainly will - there will be changes in the local economic landscape. The main one, I think, is not going to be in terms of money coming in, but in terms of what you can get for it, and how much what you can get costs.

I grew up in a recession, one in which Ireland was, to all intents and purposes, a second-world country. I didn't actually realise this until I was in my twenties; it was just how things were. There were a few things that were markedly different about that era and now, and some of them will return. First and foremost, we have access today to a vast range of goods. Many of these goods are imported. I'm not going to look at consumer goods or clothes here, just food. For an agricultural country, Ireland imports a frightening amount of food. Second, we don't have to go far to get those goods. Most people in Ireland, even in rural areas, can buy Parmesan cheese and out-of-season strawberries within, say, five miles of their homes. I'm pulling that figure out of the air, but considering Ireland's population density, and the distribution of Spars, Centras, Supervalus, etc, it seems reasonable.

These two things are going to change. First, importing food is expensive. It may not look like it, but that's because each step in the process has been optimised until it can't be optimised any more. To get to your table, the following things have to happen to food: it has to be grown, harvested, transported to a storage facility, if imported it's flown or shipped to another storage facility, distributed to the retailer, and then you go in, buy it, and bring it home. Each stage of that process involves a cost - in many cases, it's the cost of fuel, but there's also rental on storage locations and shelf space, and the credit facilities that all the companies involved make use of. Fuel costs will rise. Rentals will rise. Credit facilities will not be available. Each of these will impose an increase in the eventual retail price of food. And when food prices rise, and people cut down on what they can buy, retailers will go out of business.

The result of this will be that people will have to travel further to get their food, and when they get there, they'll get less for their money. As a corollary, fuel prices may rise enough that running cars becomes too expensive for everyday use, and then people are confined to the walkable (or cyclable, or ridable) distances - but that's outside the scope of this current set of thinking. 

So, what can people do to cope with these new circumstances? Here's a list of things my folks did when I was a kid.

Store Cupboards: When you DO get to a retailer, buy large amounts of storable food. Bread goes off within days, but flour keeps for months. Fresh vegetables are unusable after a few days as well, but canned goods last for years. Smoked fish and meat keeps longer, and frozen goods will last better as well, assuming you can rely on not having many power cuts. Rice and pasta keep better than potatoes. 

Grow Your Own: My grandfather grew about an acre of vegetables every year. I don't know if we ever bought vegetables; they certainly don't appear on the lists of groceries my mother kept. There's been a movement toward growing food lately anyway, for entertainment and health reasons more than economic ones, but it still works. I don't have an acre, but I'm willing to bet that will careful planning, I can supply all the vegetables we use for about 75% of the year from the space I do have.

Local Co-operatives: Somewhere near you (unless you're right in the middle of Dublin, and sometimes even then), there is someone who has the space and knowledge to keep a couple of pigs, and a number more who can keep chickens, ducks, or even quail. If you can offer some money to contribute to feeding these, or vegetables in exchange, you're on your way to having meat that hasn't come through the retail chain. It may involve a local retailer, certainly, but the butcher may well be happy to deal with the raw materials in exchange for a share.

Planning: This is something that plenty of people do anyway, but more of it is needed if you have limited resources. You can't rely on buying what looks good when you do get to a stocked supermarket; you need to go out with a list of goods, and a set of planned meals that will last until you're next out. If the market is offering special deals, you can adjust your plan on the fly, but arriving home with goods that won't last you until the next trip, or will go off before they can be used, is no longer a viable option. You can only change the plan if you have a plan to begin with.

Deliveries: For something that's seen as a bit of a luxury now, deliveries will become a lot more useful. In plain old cost terms, both in time and money, it's a lot more efficient for a retailer to send out one driver with boxes of goods on a round trip to multiple customers than it is for each customer to drive in, select their own goods, and drive back again. Deliveries work well with planning.

There are a few things that are going to make things easier, though, than it was in the 80s. First, we have computers,  the internet, and mobile phones. This makes many things easier - planning, deliveries, running a co-op, and managing your stores. Second, we have better public transport now, and that's going, of necessity, to see more use. Thirdly, more people can work from home now than ever before. And fourthly, the whole how-do-I-deal-with-all-this question is much easier to answer when you can hit the internet for information than when you were reliant on books and occasional phone calls.

So - am I overthinking all this? Or do you agree, and have more coping strategies in mind? Or do you think that none of this is going to happen? Let me know, in comments or emails.

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At Friday, November 14, 2008 2:53:00 p.m., Blogger Ysabella-Maria said...

Buy a few cartons of UHT milk just in case. It tastes different but it keeps for months. It also stays fresh for longer once opened.

At Friday, November 14, 2008 4:17:00 p.m., Blogger Ailbhe said...

My experience of the 1980s was so extreme that I can't really offer much here.

Things other than the internet which will make a difference: Marital rape law, divorce, and possibly healthcare. At least, I'm told access to healthcare for the low-paid has improved since I last lived in Ireland. Perhaps that's true.

Penny-pinching: eating less meat. That is, smaller portions, not less often, though that too.

At Friday, November 14, 2008 4:48:00 p.m., Blogger Ragnvaeig said...

Lentils and other legumes, especially when combined with rice, are good sources of vegetable proteins.

When buying meats like chicken, I'll frequently buy a whole bird so that I can make stock and soup from the bones.

At Friday, November 14, 2008 6:15:00 p.m., Anonymous Anonymous said...

I think one of the biggest things you've missed in your article is the economies of scale that operations like Tesco have brought to the marketplace.

Also Supply Chain Management has come on in leaps and bounds since the 80's.

Overall I don't think there's going to be a seismic shift in the supply end of the groceries market. What will stop the likes of Tesco operating will be demand driven. If people don't have the money to be able to buy N/Z strawberries they'll buy much cheaper Irish apples instead.

John R (Harunhh)

At Friday, November 14, 2008 7:56:00 p.m., Anonymous Neil said...

Fuel prices have come down again though and the predictions are they will stay down for the foreseeable future.

At Thursday, December 11, 2008 11:08:00 a.m., Blogger pansy said...

This comment has been removed by a blog administrator.

At Thursday, December 18, 2008 4:10:00 p.m., Blogger marginal_jc said...

I'm a bit late to the party. Nevertheless. Cutting back. Yes, I guess we'll see some of that. Growing veg and other small bits of farming...? Can't possibly be efficient. Comparative advantage theory suggests that one should produce what one has a relative advantage at, and then trade with others. In other words, let the farmers do the farming. Specialization generates wealth. Becoming self sufficient therefore, just reduces your wealth.

At Thursday, December 18, 2008 5:27:00 p.m., Blogger Drew Shiel said...

marginal_jc: You're putting in an axiom there that I don't accept: "Specialization generates wealth".

To my mind, specialisation leads to dependence. If the area in which you are specialised disappears or decays, there goes your livelihood.

Small-scale farming and vegetable growing, in any case, is easy, and requires very little effort beyond physical work. So by growing vegetables, I'll get cheaper food and not have to pay a gym for exercise.

At Friday, December 19, 2008 3:46:00 p.m., Blogger marginal_jc said...

It's not my axiom, it's Ricardo's :)
To elaborate: Take the time tending vegetables. Imagine instead spending that time at your primary job. Compare the money saved to the extra you would earn from main job. Now, I know not everyone can do overtime, etc. But long term, most people can choose their job such that they would be able to work longer hours for more pay, if they wanted.
On side benefits: getting fit, having fun maybe. For sure, these could tip the balance so that farming becomes more worthwhile than overtime. However, then you are doing it for other, non-economic based reasons.

At Sunday, December 21, 2008 8:43:00 p.m., Blogger Drew Shiel said...

marginal_jc: If you're measuring the outcome in pure numbers going into the bank account; sure. I can work 24 hours a day and make even more!

However, overtime means a decrease in my quality of life, which is the measure I tend to use for most activities, and will eventually lead to stress-related ailments. I reckon the vegetable growing brings that quality of life up, and brings about a positive change in the amount of money I have available without putting in overtime.

On the third hand, you could count all the time I spend writing for my websites as overtime, since it does bring in some money...


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