Food and drink market update - Feb 2023

21 February, 2023

Food markets continue to struggle due to ongoing challenges...

The European/North African growing region is facing difficulties in producing fresh vegetables and fruits, as the shift to new countries of origin has not yet taken place. Adverse weather conditions during planting and early growth in spring and summer 2022 have led to reduced yields and smaller-than-usual head sizes.

Further damage during autumn and winter has caused additional harm to already weakened plants, leading to shortages in both traditional and contingency supply regions. The combination of high prices and low quality and availability is a result of this situation.

Moreover, due to the conflict in Ukraine, the supply of organic cereals for winter cattle feed has been impacted, causing a temporary halt in the organic certification of these products. However, the cheeses that are currently maturing are organic and can still be sold as such.

The global supply and demand for rapeseed have increased on the year, with the availability of rapeseed in the EU adding to price pressure and improving processor margins.

Additionally, the domestic demand for rapeseed is expected to remain strong, even with the closure of Hull at the end of 2022. Ultimately, rapeseed prices over the next six months will be heavily influenced by the direction of the soybean market, which is awaiting a historically high South American crop.

Furthermore, the ongoing outbreak of Avian Influenza continues to impact flock numbers each week.

Take a look at the price movements and the quality of the products by category below:

Key Price Movements:

Fresh Fruit and Vegetables

The recent cold weather in Spain, Southern Italy and Morocco has resulted in a shortage, low quality and high cost of all peppers, aubergines, broccoli, celery, cauliflower, tomatoes (all varieties), lettuce and rocket.

The market is facing a widespread shortage of cherry tomatoes and greens such as savoy cabbage and spring greens, and Romanesco is both scarce and expensive.

Tomatoes are particularly affected, with cold nights causing uneven ripening and softness issues. Additionally, the prolonged time on the vine has increased the risk of viruses and mold. Vine tomatoes are especially challenging as they must be picked as a truss, which results in some being overripe while others remain unripe.

Cucumbers are also being impacted by the weather conditions, with cold nights and low sunlight hours making it difficult for greenhouses to reach the necessary temperature during the day. This slows down growth and results in the fruit having to remain on the vine for an extended period to reach the required size and weight.

This also causes the mature fruit to dehydrate and become soft at the ends, leading to softness in pre-pack products and mold on class 2 products upon arrival. Although wrapped class 1 codes are performing better, both class 1 and class 2 have a reduced shelf life.

Green peppers are in good condition, however, large sizes of red and yellow peppers have to remain on the vine for a longer period before they start to ripen. This leads to bruising and pressure damage during transit.

There has also been an increase in skin marking from insects and rubbing. Pre-packed products will be smaller and consist of two greens and one red or yellow. It is important to note that colour variations may be present and are acceptable within all sizes and grades of capsicum and chili peppers.

Aubergines are highly sensitive to cold conditions, which results in chill injury and breakdown during transit. To mitigate the impact, the product is being individually wrapped where possible to enable the removal of affected pieces and reduce the effect on other fruit in the box. Upon arrival in the UK, the product must be re-selected and has a very short shelf life.

Baby leaf and lettuce are also facing issues. Lettuce heads are small with some tip burn caused by winds. The colour of baby leaf is poor due to a lack of nutrients washed away by persistent rain, but efforts are being made to grade out the affected product. Damage from hail and wind is also evident, appearing as white or brown markings on the leaves.

Cauliflower was moved to a French contingency crop last year due to concerns about a shortfall in the UK crop, but even this crop, which is usually well protected, has been damaged by extensive frosts across Europe.

Good alternatives to suggest are: mangetout, kale, beetroot's, turnips/swede and parsnips.


The UK has seen a decrease of about 4 million hens in production for a number of reasons, such as the unprofitability for producers, high electricity costs, labour shortage (especially due to Brexit), feed, and replacement hens.

Egg packers are facing challenges in retaining existing producers and attracting new ones, leading to an increase in egg prices to unprecedented levels.

It's important to note that this situation is subject to changes in Avian Influenza and Housing Orders, with some regions facing different restrictions.

As of 1st February 2023, egg codes will change to 2UK instead of 1UK on print and outer labels will say "Barn" instead of "Free Range".


Last year, southern Europe experienced scorching temperatures reaching over 40°C, causing disruptions in the Spanish region of Andalucía, which is the largest producer of olive oil in the world, outpacing even Italy.

This heat wave is likely to result in significant price hikes for edible oils and olive oil in the coming months.


Despite an increase in domestic wheat and barley availability this season, global prices are likely to provide support for domestic grain values. However, price volatility is expected to continue due to the finely balanced global supply and demand, and the ongoing conflict in Ukraine.

Winter crops for harvest 2023 are doing well, but the cost and application of fertilisers remains a key concern to watch.

Exports of wheat and barley are expected to be stronger year on year, thanks to increased domestic grain availability. Oat exports are also expected to be strong, but competition in the global market will play a big role in the final outcome.

Brewing, malting, and distilling cereal usage is forecasted to be strong, with increased capacity coming online. Bioethanol cereal usage remains a key domestic demand watchpoint, considering high costs and lower ethanol prices.


According to the forecast, milk production in Great Britain is expected to grow by 0.3% in 2023, but production could decrease if margins worsen.

Although agricultural input costs have shown some signs of lower inflation, replacement costs throughout 2023 will remain high, putting pressure on cash flows.

Global dairy demand is expected to remain weak due to low economic growth, although there is potential for improved import demand from China later in the year.

Domestic demand is also expected to be affected by the squeeze on consumer incomes, with all products expected to see lower sales.

Farmgate prices are expected to decline in the first half of 2023, but may recover in the second half if inflation decreases and demand recovers.



According to recent estimates, beef production is set to increase slightly in 2023 as a result of higher cattle availability. The projected growth is expected to reach 0.6%.

Consumption of beef is expected to decrease by approximately 2% in the upcoming year due to cost of living pressures on consumers.

Consequently, imports are also predicted to decline by around 2% as domestic demand softens. However, exports may experience slight growth of roughly 3%, reflecting the domestic market balance.


Lamb production is expected to rise in 2023 due to increased carry-over and a stable lamb crop. However, recessionary pressures and tighter consumer budgets may lead to a decrease in consumption.

As a result, imports are also anticipated to decline as domestic demand softens, but exports may grow due to demand from the EU and domestic market balance.


Pork production may decrease by up to 15% year on year in 2023 due to a reduction in clean pig kill in the first half of the year, following a notable drop in the breeding herd.

Despite a predicted gradual recovery in the breeding herd, imports are expected to grow to fill the gap left by reduced domestic supplies, while exports may decline as available domestic supplies tighten.

The ongoing cost-of-living crisis, which has led to a decline in retail sales and demand for eating-out, is expected to keep lowering domestic demand.

Sources: A David UK, Farming UK, Oliver Kay UK.

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