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April 26, 2022

UK fruit and veg growers “could go bust as costs spiral”, warns farmers’ union

Researchers found growers are facing inflation rates of up to 24%.

By Andy Coyne

The UK could see fruit and vegetable producers go out of business amid soaring costs, the National Farmers’ Union (NFU) has warned.

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A report commissioned by the NFU between February and March found growers are facing inflation rates of up to 24%. The study, carried out by agriculture consultancy Promar International, said the cost of production has gone up by as much as GBP0.13p (US$0.16) per pack of certain products.

Rapidly rising costs could lead to a 10% drop in production, produce being left unharvested or, in a worst-case scenario, growers being forced out of the sector altogether, the report said.

The key contributors to the inflation faced by growers are energy and fertiliser. Labour continues to be the biggest cost for businesses, representing 30-70% of turnover.

The NFU is calling for the “rest of the supply chain to bear some of the cost pressures and ensure a fair return for growers”.

NFU horticulture and potatoes board chair Martin Emmett said: “The current level of inflationary pressure facing British fruit and veg growers is unprecedented.

“While growers are doing everything they can to reduce their overheads, some are experiencing double or even triple-digit inflation for key products like fertiliser and energy. If this pressure continues, it will be simply unsustainable for some businesses to continue as they are.

“Our growers produce some of the most iconic products in Britain, like strawberries, apples, and asparagus, to name just a few. We want to continue to fill supermarket shelves with British produce and go even further by growing our self-sufficiency in fruit and veg in the years to come. But this report presents the stark reality of what will happen if we continue without any action from the rest of the supply chain.”

Emmett suggested that if the current situation is left to continue it will mean “dire and irreversible consequences for the future of British horticulture”.

Promar International’s report detailed cost increases across a number of fresh produce items with onions, mushrooms and lettuce coming out on top as far as inflationary pressures are concerned.

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Free Whitepaper
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What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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