With an energy-intensive crop like cucumbers, high fuel prices are at the top of growers’ minds. Energy accounts for the second largest outlay (after labour) and with many UK growers now beginning to harvest their new crop, this is a pressing concern.
“It’s going to be a very interesting season,” says Tom Salmon of Hedon Salads. “Energy prices have increased dramatically and the industry faces its toughest challenge.”
Salmon notes that some companies, such as Hedon Salads, are in a better position because of their CHP contracts, but they will still be grappling with higher prices.
The extent to which growers are affected will vary, according to Brian Hibberd of Abbey View Produce, which produces cucumbers on more than 70 acres of land. “It depends on their energy contracts and whether they’re working on spot prices or forward prices,” he says.
The cucumber sector is keen to highlight that it is not the only industry that will be affected by higher fuel costs. “All UK industry, not just cucumbers, has to be as cost effective as it can be as it faces stiff competition,” Salmon says. “There’s no guarantee that the UK consumer will choose UK product if he has to pay a higher price for it.”
“We expect 2006 to be a testing year for all UK crop production, including cucumbers, due to the high cost of fuel,” agrees Roger Shicluna of English Village Salads.
“In terms of producer incomes, the higher cost would represent approximately an additional six per cent; few businesses can absorb this so we must hope to recover the extra costs with improved returns. Clearly this is big risk and if the industry cannot achieve the returns needed there will be a significant reduction in UK production next year due to business closure.”
While acknowledging that higher fuel costs will affect operations, some growers believe that there are some bright spots in the deal. Good quality product has been reported and a number of producers anticipate similar volumes to last season. Growers also expect less early competition.
“We’re going into the season knowing that we have to face high energy costs, but a lack of volume out of Spain means that early prices should be good,” says David Schellingerhout of Glen Avon Growers.
Indeed, in the main growing area of Almeria, crops experienced very low light levels during December and January. Producers also reported problems with sourcing in the run up to the new year.
The UK cucumber season kicks off in late January/early February with limited volumes and runs until mid-November. During this period, growers produce between two to three separate crops.
The total area of glasshouses devoted to cucumbers is estimated at around 120 hectares, according to the Cucumber Growers Association (CGA).
Cucumbers are classified as high value crops, although the spiralling cost of inputs has reduced profit margins in recent years.
UK production is concentrated in two main areas. In the north of England, the majority of glasshouses are located in the area surrounding Hull in East Yorkshire, while in the south east, Lea Valley is a major growing area.
“Nurseries in the south east tend to be smaller, family run businesses while those in the north east tend to be larger concerns - up to 10 hectares - run by teams of managers and crop supervisors,” says the CGA.
Growers reported poor light levels in early January, which resulted in crops getting off to a slow start, although there were some improvements in the latter part of the month, says Schellingerhout.
He notes that the start of the new UK season normally depends on how the Spanish season ends. “Spain supplies cucumbers until March-April but by the end of their season, volumes and quality have tapered off,” he says.
Similar to others in the sector, Schellingerhout believes that a solution to rising energy costs is needed. He notes that some nurseries have seen their gas prices increase around 80 per cent in the last year, which has created a lot of uncertainty in the industry.
“Energy costs account for more than 30 per cent of overall costs and viable energy policies have to be established,” Schellingerhout says.
“Gas should be treated as a utility like water is, rather than a commodity that’s traded for financial gain. It’s playing with our country’s industry.”
Schellingerhout further notes that growers may be facing even higher prices in the winter of 2006/07, before sufficient supplies arrive from Norway and the Netherlands.
Producers have also expressed concerns over recent price pressures at retail level. Promotions late last year meant that cucumbers were sometimes selling at half price. Growers believe that as some major multiples aim to increase market share, this could have a trickle down effect on the industry.
“All the multiples watch what the others are doing,” said a producer who declined to be named. “If one of the larger retailers promotes cucumbers at a lower price, the others follow suit. No-one wants to be the one who’s charging more.”
As growers confront energy challenges and price pressures they can take some comfort from recent growth in the market. “In the UK last year, sales volume increased seven per cent in part driven by an eight per cent retail price deflation,” says Shicluna. “We would expect four to five per cent growth in 2006.”
“As an industry we would hope that the supermarkets have the vision to support (financially) UK production. In northern Europe as a whole, production is static or in decline so the UK crop is a vital part of total supply.”
EVS supplies 100 per cent of cucumbers to Asda. During the summer, 80 per cent of the crop is grown in two areas - East and North Yorkshire and the Lea Valley. “All crops are co-ordinated with demand to ensure that 85-90 per cent of total production reaches Asda customers,” Shicluna says.
As with other vegetable growers, the UK cucumber sector faces competition from other producers. As well as Spain, Holland and Poland have also made their mark.
“Poland has very cheap labour costs but I think most consumers prefer to buy fresh UK product,” says Hibbert.
In an attempt to stay competitive and reach out to a wider audience, a growing number of producers have concentrated on expanding their cucumber portfolio to include mini cucumbers and organic product.
Growers, however, note that higher energy costs could impact on organic production. “As with conventional production, the extra fuel cost will determine future viability,” Shicluna says.
Marketers readily concede that it’s unlikely to be plain sailing this season. However, they are hoping that armed with good quality product and support, they will manage to withstand the current difficult climate.
BCP STARTS BIOLOGICAL WAR WITH PESTS
Thrips are a major pest for cucumbers and with growers looking to minimise pesticide usage, biological control has become central to control programmes, according to Biological Crop Protection (BCP).
First developed in the late 1980’s, breeder bags containing the predatory mite Amblyseius cucumeris, have become the basis for control. The sachets - which also contain Tyrophagus prey mite - are used both as a preventative and to maintain control over an extended period.
“In the past some misunderstandings and myths have grown up surrounding the product, not least how to compare sachet performance,” says Simon Jones, BCP’s UK sales manager. “The number of predators contained in the bag is misleading, what really counts is the number moving onto the crop.”
To help provide a true comparison between different sachet brands, BCP has developed an accurate method for separately counting Amblyseius and Tyrophagus mites moving onto the crop. It also enables performance trials to be carried out in-situ in a commercial crop, rather than in a climate room, providing more realistic results.
“Trials in cucumbers, roses and Anthurium have shown our new improved Ambsure ABS sachet releases very high numbers of predators on to the crop, and very few prey mites,” says Jones. “This is ideal, as prey mites have the potential to cause damage to young cucumber plants.”
“What really counts is the number of predators released onto the crop and how long the sachet remains active. This is influenced by several factors including internal moisture content and the available food ingredients. Our research showed BCP’s new Ambsure ABS bags remained active for six weeks under summer conditions.”
ScSMB AND BFGG STEP UP A GEAR
Early prospects for UK cucumbers are expected to be favourable this season, according to British Fresh Growers Group (BFGG). “We should have a promising start due to all the drastic weather in southern Spain,” explains Steve Cornwell, sales and procurement director of ScSMB Produce, which markets BFGG cucumbers.
“Crops there are being lost because of the length of time they have suffered severe cold. Prices are now very high for cucumbers due to a lack of supply.”
BFGG consists of 20 growers which produce under full crop management systems and biological control. Growers are based in Lea Valley, one of the main growing areas for UK cucumbers.
Cucumbers are an important part of ScSMB’s portfolio and this year the company has doubled its production to 10 acres. “We strongly believe in controlling some of our production and this in turn helps the other growers in the group see we have a commitment to the industry,” Cornwell says.
BFGG will handle between 70,000 and 80,000 trays of cucumbers a week during the season, representing a 30 per cent rise on last year. The increase is down to more growers joining the group.
“We will increase our business year-on-year and are looking to build and develop some more glass, but in a controlled way,” Cornwell explains, adding that multiples and the catering sector represent key customers for BFGG.
Mystica, Aviance and Sandol are the three main varieties that’ll be grown this year. “These varieties produce consistent, medium-sized cucumbers and a higher percentage of good class I fruit,” says Cameron Langford, BFGG’s technical manager, adding that the variety Paralis may be planted for the second crop, as it performs well in summer conditions.
The group also trials different varieties every year, which are marked according to performance, yields and quality.
“With the demands of the business it is important we work closely with growers to help control the technical, as well as the commercial side,” Cornwell says. “Our technical team works hard to keep abreast of the ongoing changes in our industry. The problem is if Spain has good winter weather, then it is difficult to compete, but this is all gambling on future weather conditions. However, recently, it seems Spain has been suffering from colder winters.”
Similarly to other growers, BFGG is concerned about the recent rises in gas prices. “Customers will have to realise that prices and returns will have to be better or our industry will not survive, we must support the grower,” Cornwell says. “This relates to the glasshouse industry as a whole. We all have a big responsibility.”
“To be successful in the business, you have to produce best quality products and be able to offer full traceability and high service standards,” says Morna Blair-Cornwell, ScSMB’s managing director.
“This is easier to achieve if growers work together and have the same common goals.”