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Mind the gap – increasing cost of production 2024

New data reveals increasing cost of UK apple production

British Apples and Pears Limited strengthens call for fairer returns.

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, 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.” Explained British Apples & Pears Limited (BAPL) executive chair, Ali Capper.

“There is simply no let up yet for British top fruit growers.” Capper continued. “The gap between the costs of growing fruit and the return from supermarkets is just getting bigger and bigger.”

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.” Explained Capper. “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. 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.”

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.” Continued Capper. “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.”

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.”

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BAPL launches manifesto ahead of general election

British Apples & Pears Limited (BAPL), the organisation representing commercial top fruit growers, has published its first ever manifesto ahead of a 2024 general election.

Designed to provide all political parties with clear guidance on how best to secure the future of the British apple and pear industry, the manifesto sets out ten clear actions.

“Any new British government has a great opportunity to turn around the current crisis facing UK apple and pear growers.” Explained Ali Capper, executive chair of BAPL. “We have set out clear steps that we believe are both necessary and practical to achieve that.

“We understand that there will be many competing priorities for any new government, but the actions in our manifesto have extremely far-reaching and positive impacts. Implementing these actions will help ensure domestic food security, support the rural economy, our environment and the health of the nation. Those ambitions should be firmly on the agenda of any government.”

The ten actions in the BAPL manifesto concern a range of issues from fair contracts with supermarkets to labour, environmental protection and innovation.

READ THE FULL MANIFESTO

BAPL will be sending the manifesto directly to the leaders of all the main political parties as well as their key representatives for agriculture, farming, health, finance and labour.

“In addition to sending them our new manifesto, we will be offering face-to-face briefings with the political parties.” Explained Ali Capper. “We are very keen to work with anyone who is open to our ideas for a stronger and sustainable British apple and pear industry.”