31 March 2025

Input price inflation up 50.6% in field vegetable sector since 2021

Input price inflation in the field vegetable sector has continued at a rate of 5.4% during the period January 2024 – January 2025, and input costs have inflated 50.6% since March 2021.

That was one of the key messages delivered in the Teagasc Horticulture Crop Input Prices 2025 report, published last week.

Weather

Weather conditions during the year play a very prominent role in determining the marketable yield, crop quality, continuity of sales and ultimately, profit margin in the field vegetable sector. As noted in previous reports, there is significant cost associated with both mitigating this risk, by investing in soil health, machinery, crop protection etc., or by carrying risk that it is either impossible or not feasible to mitigate and being exposed to crop and profit loss.

Since the publication of our last report, wet weather and soil conditions from August 2023 until late April in 2024 seriously affected quality and marketable yield of overwintered crops such as carrots, cauliflower and cabbage, while also significantly delaying the establishment of new season crops. Most vegetable crops were not planted or sown until mid-late April, meaning in many cases valuable early sales in the season were missed at a time when cash flow is generally limited for vegetable growers.

In addition, many input suppliers (fertiliser, seed, plants etc.) are now offering growers reduced credit periods due to risk, requiring growers to rely on any available cash reserves for working capital early in the season at a time when there is little cash flow in many crops.

Once new season crops were established in 2024, cool and windy conditions along with poor light levels resulted in slow, albeit steady growth, resulting in excellent crop quality but mixed yields. In most cases, new season brassica crops were not harvested until July, on average 3-4 weeks later than expected and resulting in oversupply of some crop lines later the summer. While yield on late sown root crops was generally reduced due to dry and cool conditions in August and September, very favourable weather in the autumn facilitated excellent harvest conditions and good quality.

Investments

Growers are continually investing to maximise efficiency and achieve greater levels of sustainability. But, where available automation and labour saving technologies require significant multi-year investments, the investments required will need longer-term supply arrangements at sustainable prices in order to make significant investments to mitigate climate risk and put their businesses on an economical and environmentally sustainable pathway. Margin over costs for primary producers will need to improve to incentivise investment and allow generational renewal of businesses.

Labour

Similar to other horticulture sectors, labour is the most significant input in field vegetable production and now makes up on average 39.6% of the overall cost of production, although the relative importance tends to be slightly higher for hand harvested crops such as broccoli or cauliflower and slightly lower for machine harvested crops such as carrots or parsnips.

As announced in Budget 2025 the minimum wage has increased from €12.70 to €13.50, an increase of 6.3%. Since January 2024, the cost of labour in the vegetable sector has increased by 7.7%.

Throughout the field vegetable sector there are extreme challenges sourcing and retaining staff in a very competitive labour market. This is compounded by the seasonality of many vegetable crops and the low availability and high cost of accommodation especially in North Dublin, which is a key production area. Labour costs are increasing as vegetable businesses try to retain and attract skilled and general operative employees and avoid the significant expense, disruption and risk associated with a high turnover of staff.

Fertiliser

Fertiliser now makes ups 6.6% of the cost of production and has inflated by 7.2% since January 2024, having deflated by 12% in 2023 and 32% in 2024. Looking ahead, suppliers anticipate that fertiliser prices will rise in the early part of 2025. Renewed volatility and significant price increases on natural gas may increase the cost of chemical nitrogen fertilisers in particular, as seen in 2021 and 2022.

Packaging

Packaging costs for the field vegetable sector has inflated by an average of 1.2%, since January 2024 with some increases on products such as plastic film and pallet wrap.

Energy

Energy in the field vegetable sector is made up primarily of green diesel and electricity which have remained relatively stable (2% increase) since January 2024, despite excise duty restoration on green diesel by government during the year.

Plant protection products

The revocation of many important plant protection products is putting field vegetable growers under immense pressure to control pests, diseases and weeds. Loss of effective products make the maintenance of high quality to meet market specifications and retaining a sustainable yield to ensure profitability extremely challenging and ultimately lead to uncertainty if the necessary tools will be available in the future to protect yields. The cost of plant protection products since January 2024 has remained relatively stable (+1.5%) with some increase in cost of branded or speciality products. These products are often required due to the limited range of approved products in the sector, especially on specialised crops.

Straw shortages

Vegetable growers supplying overwintered carrots are impacted by the straw shortages in the agriculture sector in 2024. Shortages are primarily due to reduced area of wheat sown in autumn 2023/spring 2024, poor growing conditions leading to reduced yields and tillage farmers opting to cultivate straw back into the soil as part of the Straw Incorporation Measure.

Land rental

The cost of land rental has inflated on average a further 7%, although there is variation depending on crop type and geographical location. Competition for land for use in the dairy sector, housing development, renewable energy, as well as other vegetable production, has resulted in stark increases averaging between 42% – 54% since March 2022. Additionally, the need to travel further for suitable land for vegetable cultivation is reported as leading to additional costs in fuel and reduced labour efficiency.

Seed costs

The cost of seed has increased on average by 7% but ranging from 3% – 10% depending on crop and variety type. Increased cost of producing seed, difficult growing conditions leading to reduced seed yields and demand for disease resistant/tolerant varieties are contributing to the increase in cost. Vegetable plant propagation, required for most brassicas, some salad and allium crops, is usually carried out by a third parties due to specialised facilities and skills required is reported as increasing by an average of 7.5% – 8%. Depending on the crop, seed and plant propagation makes up between 7% – 14% of the cost of production whereas, seed makes up approximately 4.5 – 7% of the cost for direct drilled crops such as carrots, parsnips or onions.

The above was adapted for use on Teagasc Daily from the report titled: ‘Horticulture Crop Input Prices 2025’. For more information, access the full Horticulture Crop Input Prices 2025 report here.