Agriculture takes double hit from Covid and Brexit

Rising costs will be crucial to farm business planning over the next six months as high rates of inflation impact the UK agricultural economy, according to the latest Agriculture and Horticulture Development Board’s Agri-Market Outlook.

The aftershocks of EU exit, the economic ramifications of Covid and the ongoing energy crisis, with its knock-on effects on input prices are all highlighted as putting pressure on bottom lines over the next six months - and the impact of these seismic events is examined in detail in the latest edition, with a particular focus on what the changes could mean for the agricultural industry.

“The pandemic has been unusual in economic shock terms both in its speed of onset and its magnitude, as well as its uneven impact across the economy as a whole” said Sarah Baker, AHDB Economic Strategist.

She said that the agricultural industry had been particularly hard hit in a number of areas, such as the reduction of the food service market or staff absences exacerbating labour shortages in abattoirs and across food processing caused by Brexit:

“Both Covid and EU Exit have led to the so-called scarring of the economy – those permanent changes that will slow down its ability to return to ‘normal’. These factors can be seen clearly in agriculture, both in supply chain management and in consumer behaviour,” said Baker who predicted a year of recalibration as individuals and businesses adapted to a new operating environment.

The report looks at the various elements that will shape farming’s fortunes and features detailed market outlooks for each levy-paying sector.