Inflation, another hard hit for agriculture

It is Spring, well almost, the temperature is rising and so are the prices, inflation hits hard on an agricultural enterprise.

Two simple facts brought that home to me the last two weeks. Last week I went down to re-stock on organic soil. Last year with my producers discount I was paying just under 10 euros for a sack of 70 litres of Neuhaus organic soil, and around 11.20 euros 70 Litres for the cutting mixture, Orgasyl. So it was a bit of a shock to be presented with a bill for 12.20 for Neuhaus and 14.50 euro for Orgasyl. That is over a 20% increase year on year.

Today I dropped down to Arterris, the large agricultural supplier co-op based in Castelnaudry,  in Lezignan Corbieres to pick up a pot order; which amazingly arrived in three weeks and not six months like last year. . These are 15cm/12cm simple black duos from Soparco, last year 51 euros for roughly 370 pots, around 16 cents a pot, now gone up to to 18 cents a pot, so 62 euros for the same amount. Again around 20% year on year increase.

So instead of picking up the whole order I had to agree to take it in stages to cushion the hit to my meagre wallet.

Growing plants is not exactly a Just in Time business. All the expense is up front, and at the tightest time of the year, late Winter early Spring, while the revenue, such as it is is mid to late Spring, early Summer and Autumn. February, March and April are lean months, the last savings from the previous season has run out and new revenue is difficult to find. So these price rises hurt. Usually I have a large stock of soil ready for use when the weather improves. Today there are four bags by  the potting table.

The question of whether to pass on the cost to  clients also raises it’s head. We try and keep out cost below that of the garden centres, organic should not be only for the rich. We have given up trying to match the likes of Lidl, buying pallets of plants from Polish heated green houses will always under cut hand grown plants. But in general we try and be “reasonable” while offering plants that are already adapted to our climate and ready to plant, and grow, from day one.

Organic sales in France, have shot up since 1999, from 1 billion Euros per annum to 12.8 billion in 2020, but last year saw there first decline to 12. 66 billion. However this small decline is not really indicative of the small plant part as most of the increase is due to the all powerful supermarket sector moving into organic, and even that is dominated by two products, dairy and eggs. However in a world where energy costs are rising, alongside everything else, people have to make economies, and so often that is in the food and leisure part of their budget.

In recent years we have up sized the pots we sell plants in from 12cms/12cms to 15cms/12cms to make the plants stronger and increased average price from 4 euros to 5 per pot. Another rise, to reflect increased costs seems inappropriate. So we will take the hit in reduced revenue.  This is not as bad as it sounds as; cost of the materials makes up a small part of the actual price of plants. A plant that we sell at 5 euros is in a pot that now costs 18 centimes and has around 30 centimes of soil in it, the rest of the costs is labour, water, transport and market costs. Labour, as in most familiar farm structures, is “free”, in that we do not pay ourselves a salary, water is free as it comes from our own well, transport costs are the largest costs of our farm, getting to and from markets and festivals, and to and from suppliers. The costs for diesel, and vehicle maintenance factors heavily in our weekly expenses.  The profiting of the petrol companies from the Russian invasion of Ukraine has hit use hard.

So while the increase in soil and pot prices stings they are  not catastrophic, diesel prices hurts more.

News that an organic pig farmer I know has had t throw in the towel due to the stellar increase in organic pig feed, now  four times the price of industrial pig feed, brings home the vulnerability of animal raising in a world dependent on imported and transformed fodder.