Despite a favourable start to the 2022 vegetable season growers are facing increasing challenges in trying to produce the nation’s supply of vegetables. An internal report commissioned by British Growers to look at the true costs of production for broccoli and carrots has highlighted that recent inflation busting cost increases have raised production costs to unprecedented levels and an urgent reset in the returns to growers is now vital to ensure continuity of supply in the future.
In April the average rate of inflation for agricultural inputs hit 28% driven by massive increases in fuel, energy, labour and fertiliser – all essential elements of vegetable production. In recent weeks the challenges facing growers have been compounded by the effects of drought and record temperatures with many of the key vegetable growing areas recording minimal rainfall since the Jubilee at the start of June. Lack of rain is not only affecting crops planted in the spring but crops which are being planted now for harvest during the winter.
Brassica growers have already been reporting plans to cut back production by as much as 20% and this coupled with the anticipated losses due to the ongoing drought could leave UK veg supplies in a deficit situation as we move into the autumn and winter. Moreover, possible restrictions on water usage could make an already difficult situation even worse.
Jack Ward CEO at British Growers said vegetable growers are facing a difficult situation. Earlier in the season we commissioned a report to look at the true costs of production and the returns growers need to ensure production here in the UK remains viable. The report showed that growers need a significant increase for their products to cover the inflationary effects on input costs and the financial impacts of the drought. In many instances, the retail price of vegetables is lower than it was 5 years ago despite five years of cost increases. In the last 12 months we have seen cost increases at retail of over 20% in other sectors (such as dairy and butter) yet the inflation in chilled veg is at 6.3% which means that growers and retailers are between them absorbing some of the extra production costs in an already fragile sector, a situation that cannot continue.
This lack of return is draining confidence out of the industry at a time when the UK needs to be investing in vegetable production. Unless growers can see a way of securing viable returns for the risks they take in growing vegetables, they will turn to other lower risk options such as growing other less risky crops like wheat, sugar beet, energy crops or even converting more land to solar farms and we are already starting to see this said Jack Ward. We urgently need a reset in the way UK vegetable growers are rewarded to ensure the risks from weather and the inflationary costs are more equitably shared across the supply chain.
Production challenges are becoming increasingly common due to the weather volatility. In recent years vegetable production has had to contend with drought, record rainfall, record amounts of frost and this year temperatures which significantly affect crops growing in the ground. During the season production from UK farms will represent the majority of retailer supplies. The production dips we are anticipating will make supplies of veg tight as we move into late autumn and winter. This situation is not confined to the UK. Other parts of Europe which have traditionally supplied the UK when domestic production was short are experiencing similar issues with production costs increases and record temperatures.
All parts of the supply chain need to work together to create a sustainable supply chain. The relentless pressure over the last five years to reduce costs has left growers with nowhere to go in the face of the current challenges and expecting growers in other parts of the world to make good any shortfall in domestic production may no longer be the solution. We face global food security challenges and therefore need a properly funded UK vegetable sector in order to meet the growing demand for this critical element of our national diet, he concluded.