There has been plenty of bad news to digest for the agriculture sector over the past year. The major obvious headwind – Russia’s invasion of Ukraine – continues to disrupt the export of key commodities and has raised fertiliser costs for farmers. Despite an extension of the Black Sea Grain Initiative, which allows Ukrainian exports of grain and other foodstuffs from a limited number of seaports, global food prices are set to remain elevated and food security fears have not faded.
- Rising prices offsetting cost inflation
- Supportive consumer trends
- Growth helped by targeted capex
- Shares at discount to five-year average
- African swine fever risk
- Rising costs eat at margins
In the UK, food inflation hit a record high in March as fruit and vegetable shortages drove prices upwards. According to the British Retail Consortium (BRC), annual food price inflation reached 15 per cent in March, up from 14.5 per cent in February. Agricultural labour shortages in the domestic market, impacted by both Brexit and the pandemic, have caused major headaches for companies.