The UK fresh produce industry has faced many challenges in recent years, including tax changes and extreme weather conditions, and our ability to source fresh produce from overseas has been affected by regulatory changes.
As a result, there has been a noticeable shortage of some fresh produce for retailers and wholesalers – including both British and global produce.
To adapt to financial challenges, the UK industry is looking at associated risks – such as failed crops, extreme weather and low returns – and pivoting to new strategies to de-risk their operations.
But if growing and selling fresh produce in the UK is unprofitable for businesses, and regulatory changes are making it more difficult to source it from overseas, does this mean we are heading towards a fresh produce drought, writes Alistair Main, Assurance Director, Duncan & Toplis.
Changing perceptions
Fears of a produce drought, where we cannot grow or import enough food for our population, have been growing over recent years, especially with adverse weather becoming more frequent, but our attitudes toward food also play a part.
Perhaps one thing contributing towards the mentality of experiencing a fresh produce drought is consumer expectations that fresh produce will be readily available all year round.
As consumers, we have become accustomed to having fully stocked shelves of all fresh produce throughout the year, so it’s a shock to us when we go into supermarkets and see empty shelves. Seasonality of products has almost been forgotten – for example, we expect to be able to buy strawberries all year round, when UK-grown strawberries are only in season in the summer, with a small extension possible through glasshouse grown products.
Not only this, but we have also become complacent to extremely unsustainable fresh produce pricing in the UK. Around Europe, consumer prices respond to availability and the cost of production, but this doesn’t happen in the UK. We can go into a supermarket in December and buy a bag of carrots for our Christmas dinner for 19p. In these cases, the carrots are being sold at a loss to attract shoppers into the store. Yet there are some people who believe this is the price carrots should be all year round and that they’re being over-charged at other times of the year – is there any wonder that UK growers are struggling to make a profit?
In order to make the fresh produce industry more sustainable, we need to change consumer perceptions surrounding availability and pricing, encouraging them to eat in season and pay a fair price for their food. Unfortunately, that’s a bitter pill to swallow when the cost of living is already high.
Worldwide challenges
Fresh produce supply has been hit by many external worldwide issues in recent years, one of these being extreme weather. In the UK, we’ve experienced long periods of dry weather followed by significant rainfall in a very short period of time. As a result, UK growers have seen some very difficult growing and harvesting conditions.
And we’ve also seen the same on a more global scale, with significant droughts in major fresh produce supply areas – such as Spain – followed by serious flooding incidents causing serious damage and even loss of life. This extreme, unpredictable weather not only causes issues for the fresh produce itself, but also for the availability of seeds and plants for coming seasons. For example, spinach seed is currently in short supply after two difficult seasons, creating a knock-on effect for future supply.
In addition to problems caused by the weather, we’ve also seen the impacts of Brexit taking effect in the form of trade barriers and potential tariff regimes. The UK border is not frictionless – there is the risk of fresh produce being delayed and spoiling before it hits the shelves, and EU hauliers have been making reduced trips to the UK due to delays.
Planning for the future
To cope with these challenges, growers in the UK are looking at the risks of growing some crops – such as the costs of inputs when crops fail, extreme weather and low returns – and making adaptations to de-risk their operations.
For example, potato farming is now seen as a risk because they’re an expensive crop to grow, harvest and store – meaning the potato-growing industry has been slowly shrinking when we look at the number of growers and acreage planted.
Alternative uses of land, like solar farms, are becoming more and more attractive to farmers to help their businesses remain profitable – but only a small percentage of land will be given over to solar.
The UK fresh produce industry is collectively working hard to overcome challenges and one way this can be done is through the digitalisation of trade. In Lincolnshire, where many of Duncan & Toplis’ industry clients are based, this is being driven by the UK Fresh Produce Network (UKFPN) – an organisation dedicated to connecting, supporting and representing professionals across the food and drink industry in the UK.
One of the UKFPN’s aims is to make fresh produce imports more seamless and it has recognised that much of the process is still paper-based and inefficient. If the industry were to adopt the use of technology and artificial intelligence to streamline the imports process, we’d reduce the chance of experiencing these fresh produce droughts as produce could be more easily sourced from overseas.
Although we are already in a position of shortages for some fresh produce, the industry is rising to address ongoing challenges, as well as adapting to new problems as they arise. Time will tell if these adaptations to de-risk operations will be successful, but in the meantime growers should continuously monitor their cashflow forecasts and ensure they have a robust financial strategy in place to ensure profitability.
To find out more about Duncan & Toplis, visit www.duncantoplis.co.uk.
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