Energy prices have come down and fewer growers are now exiting the industry, but insufficient returns from retailers, delays to plantings, labour issues and weak government support continue to harm growers
The struggles of the glasshouse sector – in the UK and indeed Europe – have been well documented by FPJ over the past few years. Soaring energy prices and insufficient retail prices have forced many growers out of business, probably never to return.
Cucumbers have been one of the main products affected by the energy crisis, and in 2023 a “perfect storm” of challenges culminated in a damaging swing from shortages to glut.
Lee Stiles, secretary of the Lea Valley Growers Association (LVGA), is arguably the UK’s foremost spokesperson for the sector, representing around 80 growers of cucumbers, peppers, aubergine and tomatoes across Greater London, Essex and Hertfordshire. Indeed, the Lea Valley is often described as the Cucumber Capital of Britain or London’s Salad Bowl.
A perfect storm
Stiles reminds us that high energy prices have forced growers in the Lea Valley to plant six to eight later than normal in the past few years – because they simply couldn’t secure a high enough price from their customers to cover the additional energy costs. Until the big energy price rises in 2021 and 2022, UK growers would plant their cucumbers in the first week in January, but now many delay plantings until mid-February or early March.
“The problem last year was that the Dutch also planted later, and the Spanish and the Moroccans kept their season going for longer because they’d suffered losses over the winter. This meant there was a perfect storm and the market just fell through the floor,” Stiles recalls. “We’re hoping that’s not going to repeat itself this year.”
As a result, there were empty supermarket shelves in February and March and then a glut of produce in April and May, which drove down prices and made growers decide to plant later again this year.
Fresh uncertainty ahead
The good news for growers is that the average price of heating a glasshouse has decreased from around £1.50 to 80p per therm, which Siles says is at least closer to making production viable. But the gas price reduction came too late to affect growers’ decision to delay their 2024 plantings.
Asked whether he expects to see a repeat of the supply chaos suffered in 2023, Stiles notes that there are some added variants this year, namely border checks, the end of the current Seasonal Workers Scheme, and a general election – all of which create added uncertainty.
“There are border checks coming in and nobody really knows what’s going to happen there,” he says. “We’ve already had issues getting plants in from Holland where the Dutch propagators haven’t completed the paperwork correctly and the plants have been held up at the border. It’s quite obvious that there are going to be teething problems where plant imports are concerned. And when it comes to checks on fresh produce, nobody really knows what will happen.”
The government’s announcement on 24 January that a wide range of fresh produce will in fact be subject to checks is the latest U-turn from Defra on the issue.
Stiles adds that virus issues in Spain and Morocco are affecting their cucumber yields, and stresses that market prices will be the decisive factor. “If we have the same situation as last year where the price is higher in Europe than in the UK, then overseas growers will do what they did last year and sell to the EU rather than Britain. Regardless of weather events and pests and disease, it might just be simple economics that leads to empty shelves again.”
More stable energy prices
Fortunately, the stabilisation of energy prices has seen the exodus of UK growers from the sector slow considerably. In both 2021 and 2022, about 10 per cent of the LVGA’s members left the business, whereas in 2023, annual membership decline fell to 2-3 per cent, which Stiles says is average.
Despite these lost growers and hectares of glass, Lea Valley continues to produce roughly the same volume of cucumbers as before thanks to an increase in yields driven by more effective varieties and growing practices.
The bad news is that although energy prices are now less volatile, this generally isn’t being reflected in the price retailers are paying their suppliers. “There’s still a blind spot there,” Stiles says, “but certain retailers that are working better with growers than others.” As a result, growers in the Lea Valley are increasingly avoiding exclusivity with a particular supermarket and instead “hedging their bets” with a wider customer base.
When it comes to government support, there was a welcome announcement in December that controlled environment horticulture would be eligible for the Industrial Energy Transformation Fund – to support businesses with high energy use to transition to low carbon alternatives – but Stiles says the government has yet to confirm details of what this actually means for greenhouse growers.
“UK growers are still competing with EU and Moroccan producers that are subsidised by their governments to some extent, so there isn’t a level playing field with imports,” he points out.
“It’s still a difficult time and there’s a lot of uncertainty,” Stiles concludes. “Some big UK glasshouse producers have gone out of business in recent months, and to put it simply, we have a lot of middle-aged members who are wondering whether it’s worth the hassle anymore. Investments and long-term planning are really difficulty, and many growers continue to operate on a season-by-season, hand-to-mouth business model.”
Five key challenges
Jimmy Russo, who is president of the Lea Valley Growers Association and director of Essex-based greenhouse grower Valley Grown Salads, says the sector faces big problems. He goes as far as to say he’ll be surprised if there’s any cucumber production left in the UK in five years’ time. Costs and returns are “unsustainable” for growers and “we don’t see any young people coming into the business”, he explains.
According to Russo, the five main challenges facing the sector are as follows:
1. Brexit has badly affected the availability and quality of labour, and the ability of workers to work their way up the ladder.
2. Covid caused serious staff shortages.
3. Minimum wage rises added costs that producers cannot recoup from their customers.
4. Higher production costs, most notably on energy.
5. Insufficient returns from customers.