A new and ever-more-determined retail price war will continue to pressurise growers and packers, says Andersons’ eastern director Jay Wootton.
In addition, a further drive for market consolidation is likely, with finance beginning to play a part in this risk-prone and, in some instances, relatively highly geared industry, he notes.
“The difficult spring and summer of 2010 was followed by the freezing early winter. Thus finished a thoroughly frustrating year on the same note it started – with little margin.
“This year’s repeat of a difficult, dry spring and early summer has led to a number of growers and packers reappraising their land and growing programmes. The dry autumn of 2011 leaves many worried about next spring, particularly replenishing empty reservoirs.”
The future of the brassica sector has to be a real cause for concern, he concludes. “Growers should carefully examine risk and return, including the customer base and financial stability of the enterprise, before committing to longer-term projects.”
• Retail price wars are piling on the pressure
• Weather and water worries adding to concerns
• Consider long-term projects carefully before committing
* Commentary for this article is based on Andersons’ Outlook 2012. Copies can be obtained free of charge by calling 01664 503200 or it can be downloaded from the Andersons website – see ‘Publications’.
* The Andersons Centre will be running its popular series of spring seminars on the prospects for UK agriculture in more depth at locations around the UK in spring 2012. These briefings are aimed at farm business managers as well as professionals working with companies in the agricultural sector. Detailed overviews of each of the main sectors of UK agriculture will be covered as well as comprehensive discussion of the latest agricultural policy developments. For details go to the Andersons Centre.