Declining grower profitability blamed on bad weather and higher production costs

Bad weather and higher production costs marked a decline in profitability for growers in 2008/09, according to a new horticulture production report, but industry figures argued that the trend has now reversed.

Horticulture Production in England showed that after four years of improving incomes, all sectors experienced a decline in profitability in 2008/09. Edibles and ornamentals growers with heated and cold glass and polytunnels saw average farm business income (FBI) drop by 23.1 per cent to £31,000.

Meanwhile, specialist fruit producers saw income decrease from £39,500 in 2007/08 to £16,000 in 2008/09. The hardy nursery stock sector also showed a fall in FBI, from £68,500 to £41,200, with increased variable and fixed costs eroding margins.

Written by the University of Reading's Agriculture & Food Investigation Team (AFIT), the report drew on Defra's annual farm business survey. AFIT head Rod Vaughan explained: "Weather is a major factor and costs for anything oil-based went up by a massive amount."

According to the report, prices of ornamentals rose slightly between 2008 and 2009, but there were declines in fresh fruit and vegetables. "It is also about how well growers can sell to supermarkets, and that is where the pressure has come in recent years," added Vaughan.

The total value of horticultural produce in 2008 was £2.4m with almost 35 per cent of output from field-scale vegetables, although they accounted for 71 per cent of the total area of production. Hardy nursery stock (22 per cent) and soft fruit (14 per cent) were the next largest in value terms.

Horticultural Development Company chairman Neil Bragg said 2008/09 had been a "low point". He added: "I would be very surprised if there wasn't a better set of figures for next year. Returns have been better and a lot of that is because of the weakness of the pound.

"On the ornamentals side there have been fewer imports because the Dutch have struggled with the exchange rate. There is also increasing interest in gardening."

Sarah Fairhurst, chair of NFU specialist group the British Protected Ornamentals Association, said the market was being driven by consumer demand for gardening. "People want to get into their gardens more," she explained.

The report also noted the pronounced upward trend in the value of soft fruit production, which has increased from around £100 million in 1998 to more than £300 million in 2008. "There has been talk about it reaching a bit of a plateau," added Bragg. "But there is still massive development potential on that side."

The soft fruit sector's success is a model the HTA would like other growers to emulate, said business development director Tim Briercliffe. "The secret of their success is co-operative working," he told HW.

- The full report is available at


- Total area used for horticulture was 171,000ha in 2008.

- Vegetable sector accounted for 46 per cent of horticultural output in 2008 and used 72 per cent of the land area.

- Non-edibles accounted for 33 per cent of horticultural output and used eight per cent of the land.

- Fruit growing took up 20 per cent of land area and produced 20 per cent of output.

- Over the whole sample, average farm business income fell by 43 per cent from 2007 to 2008 to £29,305.

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