Trade credit insurer Atradius says agriculture claims jumped 73% between June and August, warning that Britain’s food and agriculture businesses enter winter with less room to absorb disruption – and that the financial fallout of this summer’s weather may take months to surface.

New sector analysis from Atradius points to a more cautious outlook for Britain’s food and agriculture supply chain, as cost, cash-flow and weather pressures build from farm gate to factory floor. The insurer’s latest data shows claims received in agriculture rose by 73% between June and August compared with the preceding three months, while food claims increased by 9% over the same period.

Claims in both sectors eased in August, but Atradius says the broader three-month picture supports continued caution.

A sector under pressure

The movements come against a backdrop of continued cost and cash-flow pressures across the supply chain, including higher energy, fuel, fertiliser and employment costs. The report also identifies food-price inflation, geopolitical disruption and retailer resistance to price increases among the factors weighing on the sector.

James Napier, senior underwriter for food and agriculture at Atradius, said: “The outlook for food and agriculture remains moderate, but we are becoming more cautious. Britain’s food and agriculture businesses continue to see resilient demand but have less room to absorb further disruption. Higher employment, energy, fuel and fertiliser costs continue to squeeze margins.”

Livestock up, arable under strain

Atradius stresses that the picture is far from uniform. Strong demand and farmgate prices are supporting livestock producers, including beef, dairy and poultry farms. Arable businesses, by contrast, face weaker commodity prices and continued weather-related uncertainty over yields.

“There is no single story across the sector,” Napier said.

Manufacturers squeezed in the middle

Further along the chain, food and drink manufacturers are managing higher energy, fuel, employment and commodity costs. At the same time, pressure on household budgets and resistance from large retailers to further price increases are limiting their ability to pass those costs on. Napier said manufacturers are “struggling to pass on rising costs as consumers focus increasingly on value.”

The weather lag

A central warning in the analysis is that the financial effects of this summer’s weather disruption may be slow to emerge. Atradius notes that England and Wales have just experienced the driest July on record, and points to the precedent set by 2022.

Its historical data shows agriculture claims rose noticeably during the winter following the hot, dry summer of 2022 and the wetter-than-average autumn that followed. Monthly claims between December 2022 and February 2023 were often more than double the levels recorded during the preceding summer.

Atradius is careful to note that weather is only one factor affecting claims. Even so, it says the 2022–23 pattern suggests that disruption experienced during the summer can move through the supply chain and emerge as late or missed payments during the autumn and winter.

Napier said: “Extreme weather is likely to have contributed to the rise in claims after summer 2022, alongside wider cost and trading pressures. It shows how disruption at farm level can take months to reach manufacturers, wholesalers and retailers before emerging as late or missed payments.”

What it means

For suppliers, manufacturers and retailers, a quiet August should not be read as the all-clear. Atradius’s data suggests the pressure points may be shifting from the field to the ledger, with payment behaviour in the months ahead likely to reveal how deeply this summer’s conditions have bitten.

The mixed picture matters too. Livestock-heavy supply chains and arable-dependent ones appear to be heading into winter from very different positions, while manufacturers sit squeezed between rising input costs and retailers unwilling to absorb them. For businesses trading across the chain, close attention to customer and supplier payment patterns looks increasingly prudent as the colder months arrive.