UK: Glasshouse and vegetable production drive profitability
Horticulture business profitability increased by 9% in 2016, to average £34,350 per business, out-performing most other sectors. Incomes were 9% higher than the average farm. But such statistics provide a rather simplistic view of the sector, the diverse nature of UK horticulture means there were both winners and losers last year.
Edible glasshouse production
Profitability remained relatively stable for those glasshouses growing mainly edible crops, at nearly £25,000 per business. This was despite a significant increase in output of 18%; the average business generated revenue of £293,000. Yet, significant rises to costs countered this increased turnover.
Rising costs hit businesses hard. In particular, labour costs increased 31% over the year, whilst seeds and young plants went up by an average of £11,000 per business.
Those businesses specialising in salad crops saw incomes increase by a modest £4,000 to average £28,982 per business; this was despite averaging a turnover of over £350,000 each. Although the cost of young seeds and plants increased, overall input costs were down on the year but they too struggled with higher labour costs, which accounted for 26% of total turnover.
Non-edible glasshouse production
Incomes increased by 32% to average £58,000 per business. Whilst input costs remained relatively stable year on year, in contrast to other parts of the hortic sector, this group of ornamental producers actually decreased their wages bill by 18% to average just under £110,000 per business.
Fruit producers
Revenue dropped by 10% for specialist fruit growers, and despite savings on packaging, marketing and labour costs, incomes fell back by 8% to average just over £13,000 per business.
Orchard businesses suffered from falling farm gate prices, in particular those growing dessert apples, where prices fell by an average of 27%. On the other hand, cider apple growers suffered the smallest fall in profitability out of the top fruit sector, with prices for the crop barely changing on the previous year.
Outdoor vegetable growers
Profits rose by 27% for outdoor vegetable producers to average £40,300 per business in 2016. As prices picked up, revenue for these businesses increased to average £234,000 per business. Whilst seeds, plants, fertiliser, chemical and labour costs remained relatively stable, vegetable producers made small savings to fuel and property costs, boosting incomes for the year.
Ornamentals: Hardy nursery stock growers
Incomes for ornamental producers dropped back by 4% to average £38,000 per business in 2016. Although output fell across the group, growers responded by cutting back on spending, on both direct inputs and fixed costs. This helped to prevent a greater hit to income as output shrunk by 26% to average just over £260,000 per business.
For more information:
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