UK food prices set to rise further as farmers face ‘hammering’, MPs told

Costs of inputs like fertiliser and animal feed have jumped by 30 per cent compounding Brexit labour shortages

Farmers have seen input costs jump by 30 per cent (Getty Images/iStockphoto)

Britain's food production faces a "hammering" with the worst conditions for farmers "in living memory" likely to push up prices even more over the next year, farming chiefs have told MPs.

Soaring prices of animal feed and nitrogen fertiliser, as well as a shortage of labour linked to Brexit are all combining to drive up costs – which have jumped by around 30 per cent in a year.

The situation means that food prices in supermarkets, which are already up 15 per cent on last year, are now expected to continue to rise.

Minette Batters, president of the National Farmers Union (NFU) told the House of Commons environment and food committee that huge rises in input costs were "driving massive problems" across all types of farms.

"It's an extraordinary situation and I think whoever you speak to, certainly whoever I speak to, says that they have never witnessed anything like this at any time in living memory," she said.

"It is unique. I think it's a story very much of two halves: certainly the intensive sector's facing a real hammering at the moment: we've got the situation with avian influenza and poultry, pigs, obviously the national pig herd a third smaller than what it was, huge challenges for growers with the double whammy of challenges of access to labour but also, rising energy costs, rising wage costs, the impact from the war in Ukraine and huge volatility in general in the gas market."

Ms Batters said the NFU's survey work showed that next year many farmers were planning to produce even less food as conditions worsened – potentially driving higher prices.

"We're seeing huge contraction in protected crop sector, tomatoes, cucumbers, lowest levels, since records began in 1985; but also field veg, a lot of that driven by access to labour, massive contraction there; livestock, the figures are quite stark 75% are saying they will be using a lot less nitrogen fertiliser so there'll be an impact there.

"Obviously volume of milk down too: I don't think there is any sector that is not being massively impacted," she warned.

The NFU president said the government’s energy price guarantee had thrown farmers a lifeline but that it needed a strategy to deal with the problems.

Will Jackson, beef and lamb director at the public Agriculture and Horticulture Development Board, said labour was a "huge issue" and that this was "a hangover from EU exit".

"We've got 97,000 people working in the meat processing sector. 62 per cent of those are EU nationals," he said.

Food prices for shoppers have risen faster than the 10.1 per cent general rate of CPI inflation, are have been going up by the fastest rate on record.

Experimental research from the Office for National Statistics also suggests that the lowest-priced items have increased even faster, with a 17 per cent over the 12 months to September 2022.