High Supply And Low Demand Hit Fruit And Veg Prices

Wholesale fruit and vegetable prices reflect end of season high supplies and low demand fluctuations during October. Apples and pears prices have fallen due to high supply and low demand, raspberries and strawberries supplies fell but demand was still low and prices for raspberries increased but strawberry prices fell.

On the vegetable side, cauliflower prices fell by more than 30% due to increased supply, cucumber demand remained firm but supplies fell resulting in a price rise of 21.8%, iceberg lettuces prices fell by 22% because of increased supplies and quality concerns, peas prices rose by 39.5% due to supply problems, cherry tomatoes prices increased by 17.1% and plum tomatoes by 11% due to short supply.

Fall In European Annual Inflation

Annual inflation fell in Europe in February in both the euro area and the EU27. In the euro area inflation fell to 1.8% from 2% while in the EU27 it fell to 2% from 2.1% in January. The monthly inflation figures also fell by 0.4% in both zones.

The lowest annual rates were in Greece (0.1%) and Portugal (0.2%) and the highest rates were in Romania (4.8%) and Estonia (4%). The biggest upward contributions to the changes were from electricity (0.17%), fruit and tobacco (both 0.07%) and the biggest downward contributions came from telecommunications (-0.22%), medical and paramedical services (0.08%) and garments (0.07%).

Family Food 2009

The Family Food 2009 annual report published by Defra recently showed that food prices were on average 5% higher in 2009 than in 2008 and consumers spent 3.6% more on food and drink. Food was less of a burden on low household incomes quintiles than in 2008 with the percentage spent on food and non-alcoholic drinks falling from 16.8% to 15.8% of total expenditure. In terms of calories consumers bought 1.2% more food but bought 3.1% less fruit and vegetables. Dietary nutrition indicators suggest a slightly negative shift in 2009. Defra also tells us in its WRAP survey that in 2008 15% of all food purchased was wasted.

4.2% Rise In Production

The index of production increased by 4.2% in August compared with August 2009. The manufacturing index showed an increase of 6% over the same period. The annual index also showed that 10 of the 13 sub-sectors increased production but it fell in 3 sub-sectors. The biggest increases were in machinery and equipment with 16% and food, drink and tobacco with 7.7%. The main contributors sectors within machinery and equipment were machinery for the production of mechanical power with a 41% increase and the manufacture of 'other special machinery' with 26.4%. The processing and preserving of fish, fruit and vegetables was the main contributor in the food, drink and tobacco sub-sector with 32.8% growth and next came bread, biscuits, pastry goods and cake with 15.3%.

Inflation Up 3.7%

The CPI for May rose by less than in April but it is still far higher than the Government target of 2%. It rose by 3.7% in April. The index was 114.4. The RPI at 223.6 rose by 5.1% down from 3.7% last month. The RPIX (RPI excluding mortgage interest payments) rose to 222.8 or by 5.1%, down from 5.4% the previous month.

The main contributory sectors to the change in the CPI were food and non-alcoholic beverages chiefly meat and in particular pork and fruit particularly grapes. Vegetables also had a small downward effect. Transport also had a downward effect as did the purchase of new cars and road passenger transport. Alcoholic beverages and tobacco, recreation and culture both had large downward effects. Books had a small upward effect. Housing and household services provided the only large upward contribution.

The RPI experienced a large downward contribution from food, fruit particularly grapes and mayonnaise and meat. Motoring expenditure and the purchase of motor vehicles made downward effects. The price of alcohol rose but by less than a year ago. Small downward contributions came from leisure services in particular foreign holidays, tobacco prices rising by less than a year ago and from household services again prices rising by less than a year ago. A small upward contribution was made by household goods where there were price rises. Furniture, in particular, kitchen base units provided the upward effect partially offset by a downward effect from furnishings.

Production Figures For January

The latest Index of Production from the Office for National Statistics says that the index of production fell by 1.5% compared with last year and the index of manufacturing rose by 0.2% compared with January last year

In the manufacturing sector 4 of the 13 categories reported increases while 9 fell. The largest increases in transport, in particular the manufacture motor vehicles which increased by 38.9%, and the manufacture of aircraft and spacecraft which increased by 14.1%. Food, drink and tobacco also increased, in particular meat and meat products by 12.6%, and the processing of fish, fruit and vegetables by 11.6%.

Final June Agricultural Survey Results, England 2009

The final June Survey results for England were released by DEFRA and ONS on 19 November 2009. Some of the key results were that the total area of agricultural holdings in England has increased to 9.4m hectares since 2008. The total croppable area is estimated at 4.9m hectares. The area cropped has fallen to 3.99m hectares but the total land out of arable production stands at 231,000 hectares. Fruit and vegetables grown outdoors account for 140,000 hectares, up 2% on 2008. Common rough grazing stands at 427,900 ha. The total agricultural area has increased in size again this year to 9.8m ha.

Owner occupied land is largely the same as 2008 at 6.3m ha. Land rented for more than a year is also unchanged at 3.3m ha. The area under Full Agricultural Tenancy agreements (FAT) continued to decrease, by 2.9%, to 1,680,900 ha and Farm Business Tenancies have increased 3.8% to 1,094,400 ha. Other agreements have risen to 497,800 ha, up 2.2%.

The national herd of cattle remained at around 5.5m according to the Cattle Tracing Scheme. There were 3.9m pigs, up 0.5%. These included 444,000 breeding pigs. The national sheep flock was 14,984,000 sheep and lambs, down 3.5% on June 2008. The female breeding flock of 6,672,000, down 5.1% on last year, included 5,550,000 ewes for further breeding and 797,00 first time breeding ewes. 326,000 ewes were intended for slaughter. Rams totalled 171,000, down 5.4% on 2008.

The total number of people employed in agricultural was 363,000 up nearly 3,000 from last year. These included 223,000 farmers, business partners, directors and spouses of which 127,200 were part-time, 11,900 salaried managers and 127,800 other workers, 49,400 of which were full-time, the rest part-time or seasonal/casual or gang workers.

Agricultural Prices Index For September 2009

The agricultural producer and purchase prices indices for 2008-9 to September 2009 were published by DEFRA last week. The survey includes producer price indices for cereals, industrial crops, fresh fruit and vegetables, seeds, flowers and plants and other crop products as well as for animals and animal products. The survey includes purchase price indices for seeds, energy and lubricants, plant protection products and animal feedingstuffs. It also includes costs for the maintenance and repair of plant and buildings, veterinary services, costs of other goods and services, machinery, plant and other equipment and buildings. The totals for all products and all means of agricultural production are also included in the survey.

The indices for all products were 143.3 for 2008 from 118.8 for 2007 and 130.2 in September 2009 from 130.8 in August and the indices for all the means of agricultural production were 130 for September 2009 from 131.1 in August and 139.7 for 2008 from 113.8 in 2007 (2005 = 100).