Vegetable processors hit by higher production costs - 6/09/2006

Europe’s vegetable canners and freezers now feel the economic impact of this summer’s extraordinary heat wave which was followed by an exceptionally wet August. Vegetable processors not only have to cope with the confirmed shortages for their main seasonal crops, but now face a considerable increase in their production costs as a result of this year’s turbulent weather conditions.

On the other hand, in the southern regions in Spain (ex. Murcia) due to the dry weather during the year, there are now concerns over water shortages for irrigation during the winter, which will badly affect the winter crop.

The shortages in raw material supply due to the hot and dry period, which hit all main producer countries,have now been aggravated by record levels of rainfall in August in many regions. Heavy rain and cold weather not only delayed crops, but had also adverse effects on quantity and quality: the size of many vegetables is seriously affected and root plants show the effect of wet rot. Some fields – i.e. for spinach – were lost due to the rain, while the drought in July and rain in August made sawing impossible.

Further adding to the economic strains are irregular supplies to the processing lines. For example, in August factories were open the whole month, but many could only work half of their capacity. Reduced volumes resulted in higher overheads per ton of finished product. The sporadic raw material flow entails higher costs for maintenance and production, and leads to extra labour costs.

At the same time, the vegetable processing industry is facing a number of extra problems: there is a higher percentage of waste, more cleaning is required due to the wet harvest conditions and soil, peas and beans don’t have their regular sizes and onions have considerably higher peeling costs.
Overall extra costs caused by the exceptional conditions for all crops are estimated to be between 5 and 10%. For some produce like peas, broad beans, cauliflower and onions in the producer countries of Central, Eastern and Northern Europe, the incurred cost increases amount to 20-50%, depending on the region.

For the record

As of 6 September, processors in the main producer countries such as Belgium, France, UK, Italy, The Netherlands, Denmark, Sweden, Poland, Hungary and Germany confirmed the following shortages for major vegetables - depending on country and region:

- pea crop shortages between 20% and 40%
- broad beans final volumes down as much as 35% to 50%,
- baby carrot shortages between 10-15%
- carrot shortages between:5-10%
- onions shortages between: 20-40%
- sweet corn shortages between : 5 -10%
- spinach shortages between: 10-20%:
- cauliflower shortages between: 20-30%.