New report shows impacts of rising costs on growers

25 April 2022

Horticulture and potatoes
An image of carrots being sorted on a production line

We've commissioned a new independent report from Promar International, which looks at the impact of inflationary pressures on British horticultural production and the wider supply chain. Read it here.

The Horticulture Inflation Report shows that fruit and vegetable growers are facing inflation rates of up to 24%. The key drivers of inflation for growers are energy and fertiliser. Labour continues to be the biggest cost for businesses, representing 30-70% of turnover.

Based on research carried out between February and March 2022, Promar warns that these rapidly rising costs could lead to:

  • a 10% drop in production
  • produce being left unharvested
  • in a worst-case scenario, producers forced out of the sector altogether.

Seven crops, representing around 50% of total UK horticultural production, were studied to demonstrate the impacts of inflation. For certain products, the cost of production has gone up by as much as 13p per pack.

You can see a breakdown of the key findings for each crop below.

“This report presents the stark reality of what will happen if we continue without any action from the rest of the supply chain to bear some of the cost pressures.”
Martin Emmett, NFU Horticulture and Potatoes Board chair

The report states that ‘...without an increase in prices returned to the farm gate, this will eventually, in a worst-case scenario, see producers unable or unwilling to carry on growing’.

Unsustainable

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 to bear some of the cost pressures and ensure a fair return for growers.

“Losing growers at a time when people want to see more British food in shops would be a huge loss, not just for UK horticulture but for the entire nation. Farming needs long-term planning and investment. The current situation, if left to continue, will mean dire and irreversible consequences for the future of British horticulture.”

Produce in study

  • Gala apples – a standard six-pack
  • Iceberg lettuce – per head
  • Mushrooms – 300g pack
  • Carrots – per kg
  • Tomatoes – per 400g
  • Bulb onions – standard three-pack
  • Broccoli – per single head

Inflation rates per sector

  • Onions – 24%
  • Mushrooms – 19%
  • Lettuce – 18%
  • Tomatoes – 17%
  • Carrots – 14%
  • Broccoli – 13%
  • Apples – 11%

Cost per pack increase

  • Mushrooms – 13p
  • Tomatoes – 9p
  • Lettuce – 7p
  • Apples – 7p
  • Broccoli – 5p
  • Onions – 5p
  • Carrots – 3p

Key drivers of inflation

  • Energy – 80%
  • Fertiliser – 75%
  • Diesel – 50%
  • Packaging – 25%
  • Plant/raw materials – 17.5%
  • Transport – 17.5%
  • Labour – 15%
  • Ag-chems – 10%
  • Seeds – 5%

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