Agriculture and Food Development Authority Teagasc has warned that some growers are considering cutting back on production for 2022 to manage their cash flow or minimize exposure to high costs. This is all in the wake of significant rises in production input costs this year, mostly due to external factors.
An analysis by Teagasc Horticulture Development Department suggests input cost increases will, in many cases, exceed grower margins. Possibly, growers will be unable to absorb the rising costs, without an increase in what they are paid for their produce.
Andy Whelton, Teagasc Horticulture Advisor: “The horticultural sector is exposed to several input price increases, chief among them labour, packaging, and fertiliser. The impact on overall costs of production is very significant, particularly for crops that need to be harvested and graded by hand.”
The diverse Irish horticultural sector, with a farm gate value €477 mln. is the fourth largest sector in terms of gross output value. It covers plant, and food horticulture, which includes mushrooms, potatoes, field vegetables, soft fruit, protected crops and outdoor fruit.
Teagasc reports that considerable volatility remains as primary producers try to forward plan business for 2022 and manage cash flows. As cost planning is always difficult in this sector, it says the risk is increasing significantly for primary producers.