The relentless demands on producers arising from the continuing struggle between multiples for market share is proving difficult for some businesses.
Larger grower/packer operations continue to consolidate and grow, says Andersons director Jay Wootton.
“The survivors are taking on greater commitment, operating in a high-risk environment.
The evidence suggests a profit of only 0-2% of turnover is achieved by a number of businesses in this sector on a regular basis.”
Continued development of consumption in 2017 will drive greater investment that meets standards for fresh chilled product and fulfil continuity of supply.
- Grower base consolidation continues
- High-risk business – low returns on turnover
- Big questions over free movement of labour
See also: Secrets of successful leek crops
The effect of rising labour costs is compounded by the Brexit decision, says Mr Wootton. “The fresh produce industry will be watching nervously how free movement of labour is tackled.
“The Living Wage and Auto Enrolment, along with the potential restriction of labour from overseas, could lead to massive change in the level of automation in the industry.”
The Farmers Weekly outlook articles are based on Andersons Outlook 2017. Copies of the full publication can be downloaded from the Andersons website by clicking on ‘Publications & Events’. Alternatively, request a printed copy by telephoning 01664 503 200.
Andersons is running a series of seminars in the spring looking at the prospects for UK agriculture in greater detail.
3 March – RAF Club, Piccadilly, London
7 March – Harper Adams University, Newport, Shropshire
8 March – Westmorland, J36 Auction Centre, Kendal
9 March – Carfraemill Lodge Hotel, Lauder, Berwickshire
10 March – York Racecourse, York, North Yorkshire
14 March – Yew Lodge Hotel, Kegworth Leicestershire
15 March – Perth Racecourse, Perth
17 March – Newmarket Racecourse, Newmarket, Suffolk
21 March – East of England Showground, Peterborough, Cambridgeshire
22 March – Salisbury Racecourse, Salisbury, Wiltshire
23 March – Exeter Racecourse, Exeter, Devon
24 March – Royal Agricultural University, Cirencester, Gloucestershire