#Ireland #horticulture #vegetableproduction #inputpriceinflation #laborcosts #packagingpriceinflation #sustainability #viability
According to Teagasc, the area of field vegetable production in Ireland is predicted to decrease by 7% in 2023, with many primary producers in the vegetable sector and other horticultural sectors ceasing trading in recent years. The report also highlights the impact of input price inflation, which has risen due to Brexit, the COVID-19 pandemic, and the illegal Russian invasion of Ukraine. The vegetable sector is very labor-intensive, with labor accounting for an average of 36% of the cost of production, and labor costs have increased by 11% since March 2022. Furthermore, the price of raw materials, production, and transport has led to packaging price inflation, with an average increase of 20% in cardboard and plastic packaging. The report calls for a market response to ensure the viability of this industry.
The report paints a concerning picture of the Irish horticulture sector’s viability and sustainability, with a predicted decrease in vegetable production area in 2023. The primary reason for this decrease is a lack of economic sustainability due to reduced margins coupled with capital risk, causing many growers to exit the sector. This is compounded by input price inflation in the horticulture sector, with all sub-sectors reporting significant input price inflation across most inputs.
One of the primary cost factors in vegetable production is labor, accounting for an average of 36% of the cost of production. Labor costs have increased by 11% across general operatives and other skilled labor, such as tractor drivers since March 2022. The seasonality of the vegetable sector also means that businesses find it increasingly difficult to compete in the labor market, resulting in an increased cost of labor as they attempt to attract staff by offering increased pay.
Packaging price inflation is another significant challenge for the industry, with the price of cardboard and plastic packaging increasing by an average of 20%. The cost of raw materials, production, and transport, all linked to energy prices, is the primary reason for packaging price inflation. Although energy prices have stabilized or reduced, this has not yet had a direct impact on packaging prices due to a lag in the supply chain.
The report calls for a market response to ensure the viability of the horticulture industry in Ireland. With recent shortages of certain product lines and supply chain issues, the importance of underpinning Irish horticulture production has never been more in focus. It is essential to maintain the flow of local, nutritious, fresh, and top-quality produce onto supermarket shelves.
