Suffolk's potato sector shrinks as farmers' costs rise

Many are choosing to cut their growing areas as market forces combined with disease and weather risks make the crop less viable.

James Wrinch, managing director at East Suffolk Produce - which has seven farmer members and trades with about 15 altogether - said the climate was tough for growers.

They were feeling collectively "grumpy" about the situation. "It's not fun at the moment," he admitted.

Collectively, his group grows about 80,000t out of the UK total of around 5m tonnes - but overall they will be growing less this season, he said.

"We will be about 10% down on average," he said. "The decline in area is reflective of the risk of growing and investing that amount of money in an area where potatoes have been in plentiful supply."

Mr Wrinch said the mood among potato farmers was "glum". Locked-in input prices for many - who have been forced to buy their fertiliser at much-inflated prices - means crops are expensive to grow this year.

"We have got at least 12 months when we are paying more than we think we should be," he explained. "We are having to swallow it."

Growing potatoes is a specialist area which requires costly equipment - making it difficult to get out of it altogether without losing money. But he estimated that this year it would cost about £10,000/ha to grow the crop. On that, growers would hope to make around 10% to 15% profit.

"You have a lot of capital tied up in growing potatoes," he explained. "We plant them in March and we might get paid for them in November."

Even the cost of irrigation has soared - because of the energy required - and it could cost more than the potato seeds in dry areas such as East Anglia. Farmers in Scotland - where rain is more frequent - are able to grow the crop at lower cost.

Half a million pounds could potentially be tied up in one farmer's crop - which could then be wiped out by a pest or weather, said Mr Wrinch. 

A recent price lift for onions caused by shortages elsewhere in the world have made them more attractive - although that has to be weighed against the cost attached to drying them using expensive gas or electricity this year.

But growers of other types of vegetables are having a hard time and prospects for potatoes are looking less buoyant.

"I think we are going to see areas fall again next year," predicted Mr Wrinch.  "We are entering a period of a huge amount of change in the potato industry I think." 

Farm Business Consultants Andersons' latest Agflation estimates suggest farmers' costs have risen 18.7% year-on-year, but the prices they are getting have gone up by an average of 11.1% - leaving a big gap.

James Foskett of James Foskett Farms in Woodbridge, said his flyaway sandy soils left him with little option but to stick with vegetable growing, but said farmers weren't getting paid what they should for their fresh produce crops.

"We just can't get the money out of the supermarkets," he said. "We show them our figures - they still won't cough up."

He added: "We have got better inflation in onions than potatos but it's hard work at the moment across the whole of the vegetable growing sector - we are just no getting enough."

"I shall be pleased if we break even - which is a disaster really - but we won't make any money.

"People have got to realise they are going to need food somewhere along the line - they can't keep waiting for imports."

Andersons consultant Jay Wootton said onion shortages in the Far East may have helped onion growers with prices firming "quite nicely", but there were also massive increases in input prices such as fertiliser and fuel.

"There's a major problem," he said. 

The fresh produce sector was particularly badly hit by costs as it was a big user of electricity for irrigation and of labour - which was in short supply and costly. Some employers have faced a 30% increase in labour costs over the last three years, he explained. 

"That's huge," he said. Other cost rises were double-digit, he added. 

Although there was food inflation in the shops - that didn't mean farmers were pocketing huge profits, he said.

"It isn't reaching farmers. There's no question about that," he said.

"We are seeing enormous inflation. It's knocking growers' confidence because they are not seeing the recognition of that from a number of courses. There are some stand-out people who are responding to this inflationary pressure but the mainstream multiple side of it is pretty hard-going."

He added: "I don't think potato growers will make money this year."