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.

Agricultural Prices Down In March And Year

Prices for all outputs rose by 0.6% and the prices of all inputs was unchanged for March 2014. Prices are lower than the same last year. The price for all outputs was 6.9% lower than the same time year. The price for all inputs was 4.5% lower than the same time last year.

Crop prices are down slightly compared with last year. The poor harvest may have been to blame. Some crop prices are significantly down on last year: potatoes down 38%, fresh fruit down 23%, oilseed rape down 22% and cereals down 22%.

Strong demand for top quality fresh fruit led to a price rise of 7.7% in March. Cereals prices increased by 1.2% due to concerns over the future supply of cereals due to the political situation in the Crimea. An increase in global demand for oilseed rape and decrease in supply led to a price rise of 2.3% in March.

Sheep and lamb prices increased by 9.3% in March as supplies decreased pushing up prices. Lower levels of production of mutton and lamb than last year, down 1.8%, resulted in prices 8.7% higher than last year.

On the inputs side, energy and lubricant prices were 2.5% lower in March and 4% lower than last year. Feed prices increased by 0.5% but remain 12% down on last year. Straights rose by 2% due to increased cereal prices while compounds stayed the same.

The price of fertiliser rose by 0.4% in March but is still 8.2% lower than last year. Prices remain steady because most of the spring fertiliser market was already ordered.

Supply And Demand Combine To Increase Farm Prices

Farmland prices increased in H2 2009 after a slight fall in H1. The changes were due to a decrease in supply in both commercial and residential farmland sectors, stable demand in the residential sector and increased demand in the commercial sector according the the RICS Rural Land Market Survey for H2 2009. Price expectations increased but more so in commercial.

RICS publishes two different measures of farmland prices, the opinion based and the transaction based measures. The RICS opinion based measure of farmland prices increased by 4% to £12,715/hectare in H2 from £12,172/hectare in H1 2009. Arable land increased by 5% to £13,713/hectare in H2 from £13,085. Pasture land increased by 4%. In H1 it was £11,260/hectare and in H2 it increased in £11,718. The transaction based measure increased by 7.5% in H2 from £15,199 to £16,381/hectare.

Demand for farmland in the residential sector stabilised during H2 2009. Demand for commercial farmland increased. Some surveyors suggest commercial farmers are still interested in expanding their operations. Surveyors also suggest that low interest rates are making commercial farmland more attractive to non-commercial buyers. Supply however is falling in both residential and commercial farmland sectors. These conditions are expected to continue which will help increase prices further during 2010.

Weak Recovery Reflected In December Demand

Manufacturers are saying that the recovery they experienced over the last few months is very fragile and it is reflected in the recent downturn in output. A slight balance of respondents taking part in the latest CBI Industrial Trends survey report weak demand and order books below normal. The survey also reported the balance of adequate stocks has fallen slightly. Prices are expected to fall in line with the lst two months.