The cost of producing a kilo of British apples continues to rise for UK growers. In fact, new data reveals that UK growers have seen a further 5.5% increase in costs of production in the last year.
The 2024 cost of production analysis[1], conducted by farm business consultants Andersons, reveals that it now costs £1.33 (median cost) to produce a kilo of British apples, up from £1.26 per kilo in 2023.
However, it is the cumulative effective of multiple years of increased costs that is really hurting growers, financially and mentally. "In the last two years, growers' costs of production have increased by 30%, but they have received just an 8% increase in returns from supermarkets.[2]" Explained British Apples & Pears Limited (BAPL) executive chair, Ali Capper.
"There is simply no let up yet for British top fruit growers. The gap between the costs of growing fruit and the return from supermarkets is just getting bigger and bigger," said Capper.
In the last 12 months, the biggest contributor to cost increases for UK apple and pear growers has been labour. Labour makes up around 40% of all grower costs, so the cost has a big impact on potential orchard profitability.
"When growers calculate orchard profitability, they look back to see how costs, like labour, have increased. Back in 2014, a grower thinking about planting a Gala orchard would have checked back over the previous decade and seen labour cost inflation running at 4% per annum. That would have meant the new orchard would be profitable by year 10 or 12 of its 18-year life. However, since 2015, labour cost inflation has been running at 7% per annum[3]. Following the same calculation, a new Gala orchard would never reach profitability. Growing apples and pears in the UK is just not profitable right now," explained Capper.
With costs outstripping returns, growers are having to cut back on future investment in new varieties, new machinery, cold storage and packhouse infrastructure. This will be a slow painful death without increased returns.
"Some growers are even grubbing orchards and moving out of apple and pear growing altogether. That is a tragedy. We have the ideal conditions for growing the best quality apples and pears in the world. Consumers need access to home-grown healthy fruit and that's going to be at risk in future years if investment is cut back now," continued Capper.
What apple and pear growing businesses need is long term sustainable profits and fair retail relationships. Capper said: ""We are very grateful to those supermarkets that are supporting growers – especially around the start of the British season, and in some cases with cost price increases to help fight inflation. We now need all retailers to take pride in championing their British growers to support sustainable profits and reinvestment for future fruit supply."
For more information:
Louise Raisbeck
British Apples and Pears
Tel: +44 07966 688063.
Email: [email protected]