Trade disruptions coupled with the increasing frequency of extreme weather events have led to price volatility for a range of fresh produce. This is manifesting itself on supermarket shelves where fresh fruits and vegetables previously available all year round are now in short supply at certain times.
A recent report prepared for the European Parliament studied how phenomena such as heatwaves, cold spells, heavy rain, flooding, landslides, droughts, wildfires and storm surges are impacting growers. The picture that emerges is of a rise in extremely hot summer temperatures over all of Europe, progressively drier conditions in the south of the Continent, and an increase in heavy rainfall in northern and central European regions.
“The magnitude of these increases is concerning,” the report states. “The number of climatological heatwave days will see at least a fivefold increase by the end of the century in the coolest climates, and up to 30 times more in warmer climates. Drought severity in southern Europe could triple by the end of the century.”
Losses specific to the agriculture sector already account for more than 60 per cent of drought-linked losses, or around €5 billion annually. This is projected to increase in the future.
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“Vulnerable sub-sectors include non-irrigated cereals, and specifically maize, fruit trees and perennials, tubers grown in regions with heavy precipitation extremes, and livestock for its dependence on green fodder,” the report warns.
Some of this has already come to pass. Farm associations here are warning of a potato shortage later this summer, a result of high rainfall and waterlogged fields. But the impact of climate change is felt across a range of crops, from late frosts freezing spring buds and curtailing harvests to extreme heat at flowering time preventing grain formation. All such shocks send shudders up the supply chain.
“Recent changes in weather patterns globally and here on the island of Ireland are having a significant impact upon the fresh produce supply chain. The impact is manifesting itself through numerous ways including later planting, lower farm yields, product shortages and thus country-of-origin sourcing decisions,” says Neal Johnston, business consulting, supply chain and operations partner at EY.
“For example, it is likely this year that we may see salad produce from US growers on our supermarket shelves. This is produce that would typically have been sourced from our own domestic Irish production along with some European countries. While widespread shortages are not foreseen at this time there may well be some isolated exceptions, such as potatoes or broccoli, as Irish farmers will have struggled to achieve their second planting of the year which may lead to availability challenges later in the year.”
Despite these challenges, Johnston believes there are clear indications in the marketplace that the consumer is increasingly seeking out fresh produce.
“Industry indicators from independent bodies point to double-digit growth in fresh produce sales across the Irish supermarket retailers. While inflation contributes to this growth, there is also volume growth within it,” he explains.
“As fresh produce is typically a promoted category within the supermarket network, the end consumer is experiencing some degree of shielding from the cost inflation.”
But that looks set to change, says Johnston, who cautions: “The macro trends of supply chain disruption and extreme weather indicate that further cost inflation will be seen in the category, which will likely be felt by the consumer in prices on the shelf.”
At industry level, additional costs such as those imposed by new Brexit arrangements are encouraging consolidation among fruit and veg producers into “bigger and bigger businesses,” says Donna Marshall, professor of supply chain management at UCD. “Small players are being crowded out by these regressive costs,” she adds.
The resulting “industrial level” production of fruit and veg is in itself a real worry “for a country, for a community, and a micro trader,” she says. “Traditional artisanal and family companies are just getting pushed out.”
But consumers are pushing back. “There is a real tension now between big agriculture and demand from consumers for artisanal local produce. There is also a real tension between how governments view food security – a volume-driven legacy of the second World War – and what consumers are demanding. Historically it is the education and understanding from consumers that pushes the industry to change,” she says.
That includes growing consumer demand for produce that is in season, local and with minimal or no use of pesticides and industrial chemicals.
“I want my food to be as fresh and natural as possible. It is not volume that consumers value, it is health and nutrition, which is why we are seeing a backlash against volume production and industrial farming,” says Marshall.
“It’s about, how do we create regenerative agriculture? One that is much closer to the local communities who have the knowledge and the passion for it.”
Navigating the twin forces of climate change and changing consumer demand requires nothing less than a “reimagination of the industry” she says, “because the current incentives that drive it are not working.”
