Field vegetable growers - Facing testing times

The challenges facing many field vegetable growers this year are severe but they are battling a volatile market with new approaches, Jack Shamash finds.

Growers are fighting back on consumer buying habits by promoting health benefit, versatility, variety and price - image: HW
Growers are fighting back on consumer buying habits by promoting health benefit, versatility, variety and price - image: HW

Producers of field vegetables have been feeling the squeeze in a big way. While costs are spiralling upwards, the prices for their produce are being pushed down. Many growers have genuine fears for the long-term health of the industry.

After a period of relative prosperity, things are looking bleak. This is partly due to good harvests last year, which have glutted the market. "Last year, we had very good growing weather and lots of steady rain, which was replicated across Europe," explains Allium & Brassica Centre agronomist David O'Connor.

"The market is currently on the floor. For basic market-quality onions you are lucky to get £80 per tonne delivered," he adds. The new crop will start to be harvested in July. Only then will it become clear how the market is shaping up.

British Onion Producers Association (BOPA)chairman and supplier 3Ms director John Patrick is downbeat. "It is a very challenging time. There is a very volatile market and we're having serious competition from the Dutch, who are very efficient. The big retailers are also trying to push prices down as much possible. Although they now realise that there is problem of sustainability, on a day-to-day level, they are still trying to get the cheapest deals.

"Last year, we were getting enough money. This year, things are bad. If you've got uncontracted onions, you won't cover the cost of production. It's probably cheaper to put them in a hole in the ground rather than take them to market."

Seasonality issue

Another major problem is the seasonality of buying habits. Field vegetables such as leeks, onions and carrots are mainly used when the weather is cold. They are seen as ingredients for hot stews and soups rather than salads.

British Carrot Growers Association (BCGA)former chair and Freshgro cooperative managing director Martin Evans laments: 'We haven't had a proper winter. When the sun is shining, carrots grow beautifully, but we can't sell them. Carrots are currently selling for around £120 per tonne. We would hope for £150."

Life is not much better for brassica growers. Former Brassica Growers Association chair Philip Effingham, who is currently a consultant to the industry, says: "We are trading below the real cost of production. There is no money for future development." He explains that with brassicas, only 60-70 per cent of the crop is usually harvested. Because the plants are so perishable, anything for which there is no immediate market is usually left to rot in the fields.

"We have to find ways to deal with this volatility," he says. He points out that the market is suffering because the freezing industry has reduced the amount of broccoli and cauliflower florets that it will handle. The Horticultural Development Company, working with the University of Greenwich, is currently looking at methods of storage using ethylene. "This is something that should have been done a long time ago," Effingham maintains.

Input costs are extremely high and the most significant of these is fuel. "Just to fill up a tractor with diesel will cost around £600. A few years ago it was half that price," says Evans. Added to that, the cost of all products derived from petrol has risen, he notes. "Over the past three or four years, fertiliser has tripled in price. Some of these rises were completely unexpected."

One of the more unusual cost rises is straw. Around half the cost of producing winter carrots is made up of strawing the crops to protect them from the weather. Now the cost of the straw has rocketed because it is being widely being burnt in biomass boilers as a heating fuel.

There are other difficulties facing field vegetables. The current shortage of water and the decision by water companies to impose restrictions is giving some growers cause for concern. "We're big consumers of water. To grow carrots we want around 40cm of rain in a year. Most carrots are grown on sandy soil, which doesn't hold water," says Evans. He points out that the crucial time is in the autumn, when the carrots grow rapidly.

However, John Patrick believes that the fears might prove to be unfounded. "The onion industry has invested very heavily in water security," he says. "We're in the same position as last year. We should be able to cope."

Despite the ending of the Seasonal Agricultural Workers Scheme, growers are not greatly concerned about labour shortages. O'Connor explains: "Around half the workers around Boston are Polish and Lithuanian. We haven't noticed a shortage."

Organic decline

The organic market has taken a tumble. Nessgro is one of the blue-eyed boys of the carrot-growing industry. It boasts that it is the only firm growing organic baby Chantenay carrots and it has contracts with firms such as Marks & Spencer.

However, the firm is battling the overall decline in organics. Managing director Steven Jack describes the situation as very frustrating. "In the USA and mainland Europe, sales of organics are showing double-digit growth. The UK is an exception." He says part of the problem is that retailers are focusing on value rather than quality. "They want to drive down costs and sell the more basic lines. This is a real shame because organic food can be very good value." He also suggests that the Government should be encouraging more sustainable farming methods.

One of the effects of the squeeze is that many firms are simply not investing in the future. With the concern on immediate survival, long-term issues are simply not being addressed. "There is no investment happening. This will have an impact in a few years. We're flatlining. We're not putting the sort of money that is needed into irrigation or research. The machinery for setting the prices is not allowing for the future," says Evans.

For some, the pressures have become too much and they have moved away from the sector. "We have seen the acreage being cut back. People are now going into cereals, potatoes and rape. In fact, they are growing just about anything except brassicas," says Effingham.

But not everyone is suffering in the same way. Growers who are tied into long-term contracts have been able to avoid some of the recent fluctuations. Roger Hobson, who runs a family carrot-growing farm, explains: "We are currently on contracts to supply processed carrots for food manufacturers. We've got enough contract customers, so we're in a balanced position. It would be a lot worse if we had to work on weekly-priced jobs."

Growers are also finding ways to fight back. To position their crops as premium products, they have embarked on various PR campaigns. "We need to differentiate. We need to understand what turns consumers on. People take onions for granted. We have to stress the health benefits, the versatility, the price and the variety of tastes for ethnic meals," says John Patrick. The BOPA has expanded its website and engaged Phipps PR to get more television and magazine coverage.

As for carrots, the BCGA has started a Facebook page and has also expanded its website promoting the more unusual uses for carrots, such as in salads or carrot cake. The online presence is part of an attempt to persuade people to use vegetables at all times of the year - not just in the winter.

Some firms are keen to look at new varieties. At Nessgro, the company believes firmly that the key to survival is innovation. Steven Jack says: "We want to find niche products with different tastes, appearances and colours." He says he is keen to promote carrots to be eaten raw in summer and his firm is looking at developing an American-style snacking carrot. "There are some varieties that have a fantastic taste and a very narrow core, which means a better texture."

Jack is also looking at new varieties of parsnips and other root vegetables, which sell relatively poorly in Britain and are primarily used around Christmas. He adds: "We're not going to be cutting back and we're not moving away from the sector, but we are going to have to find new products and markets."

Facts and figures

27% - Fall in farm business income or net profit among growers in England.

£48,000 - Average net profit in horticulture.

24% - The proportion of production horticulture businesses that were unprofitable in the year to February 2011.

30% - Cost of fertiliser increased by almost 30 per cent.

Source: Defra Farm Business Survey, October 2011

Defra's horticulture category includes fruit and vegetables grown under glass, specialist fruit providers, hardy nursery stock and growers of field vegetables with no arable land.

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