UK vegetable and potato growers are warning that despite production cost increases of some 22 per cent, the UK consumer has yet to feel the full force of food price inflation which will really bite hard next year.
“In 35 years in the business I don’t think I have ever seen a situation where there are so many challenges simultaneously,” said Philip Effingham chairman of the Brassica Growers’ Association. “There are fewer and fewer of us left in the business, and we are starting to see the first signs in the marketplace of growers going over to wheat.”
He added that although production costs have risen 22 per cent since this time last year, that figure could rise to 30 per cent soon. “There has not been a significant upturn in the price paid back to growers yet,” lamented Effingham. “There is a lot of cost inflation along the whole chain in white diesel and packaging too, for example, and it’s got to come back to source at some point.”
But at Southern England Farms, Greville Richards believes supermarkets are already realising the need to pay more for brassicas. “The supermarkets are not the problem - we have seen some increases in the prices paid by our customers, but what the public needs to realise is that in 2009 we will experience the most horrific cost rises,” said Richards. “Everyone is talking about fuel, but that is just a drop in the ocean if you compare fertiliser costs last year with this year: it was £203 a tonne last August and now it’s £550-600 a tonne and no-one is forward selling.”
He also added that land rents are going up as landowners recognise how high wheat prices are, and have increased their expectations accordingly.
The picture is bleak for potato production too. One of the UK’s biggest suppliers told FPJ: “We are probably expecting a 15 per cent increase in cost of maincrop going into store. But then a lot will depend on what sort of energy contracts growers are signed up to as to what storage costs will be: some are looking at 85 per cent increases on their energy bill from a year ago.
“What is really worrying though is where we will be in 2009.” He added that in the short term growers are looking to cut back their inputs to the minimum. “You can probably get away without phosphate and potash for a year, but you can’t cut back on nitrate,” he said.
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