Input price inflation in the horticulture sector in Ireland has been significant in recent years. 2024 is no exception, with average input prices rising across the horticultural sector.
- Teagasc Horticulture development department has taken a snapshot of input prices in January 2024 compared to 2023. All sub-sectors of horticulture show input price inflation across many inputs, with some exceptions like energy.
- In 2024, the standout issue is labor costs, and this is a key driver of overall input price inflation.
- Since the first report of this type in 2021, combined horticultural inputs have risen by an average of 40%.
- Geo-political and climate change issues have affected international arrangements for sourcing fruit and vegetables. A market response will be required to ensure the economic and environmental sustainability of Irish horticultural production in the future.
- Technologies exist to support the evolution of Irish production systems, which permit more horticulture crop production closer to consumption while reducing labor requirements, food waste, and packaging associated with long supply chains.
- Margin over costs for primary producers will need to improve to incentivize investment and allow the generational renewal of businesses.
- Horticulture fresh produce has a comparatively low environmental footprint compared to other foods and has significant health benefits for consumers.
Valued at €521 million (farm gate value), horticulture is the fourth largest sector in Ireland after dairy, beef, and pigs in terms of gross agricultural commodity output value. The horticulture sector is diverse and covers plant and food horticulture. Horticulture food includes mushrooms, potatoes, field vegetables, soft fruit, protected crops, and outdoor fruit. Amenity horticulture includes nursery stock, protected crops, cut foliage, and outdoor flowers and bulbs.
The operating environment for Irish horticulture producers is constantly evolving. While Brexit, Covid-19, and the Russian invasion of Ukraine characterized the commentary on input prices from 2021 to 2023, this year, the commentary emphasizes the subject of climate change, specifically the increased frequency and spatial pattern of extreme weather leading to difficult growing conditions right through from plant establishment to harvesting.
In 2024, labor costs will be the key driver of inflation and outweigh reductions in other input categories, including energy. Labor represents, on average, 42% of total input costs for most sectors. As an input, it has increased by between 12.5% and 24.3%, depending on the sector.
Dermot Callaghan, Head of Teagasc Horticulture Development Department, said, "Margin over costs for Irish horticultural producers will need to improve to incentivize investment and allow for generational renewal of businesses. A market response will be required to underpin the economic and environmental sustainability of Irish horticultural production into the future."
Source: teagasc.ie