High inflation and slowing consumer demand amid the cost of living crisis will create "dual challenges" for East Anglia's farm businesses in 2023, warned industry analysts.

The latest agri-market outlook from the AHDB (Agriculture and Horticulture Development Board) assesses how cost inflation, suppressed economic activity and a "lack of flexibility in the labour market" will affect farm business margins.

Farmers are hit particularly hard, it says, as they face higher input costs while dealing in a price-sensitive consumer market.

AHDB economic strategist Sarah Baker said: "The main issue with inflation is it drives down the real rate of growth in an economy, erodes households’ disposable income and leads to more cautious spending patterns. Coupled with rising input costs for farmers, the industry will face ongoing dual challenges this year.

"Consumer confidence, along with demand, will take some time to recover, despite inflation dropping as it is expected to during 2023."

The report also examines trends in key East Anglian sectors such as pork and cereal production.

Pig meat production is predicted to decline by up to 15pc year-on-year in 2023 following a significant drop in the breeding herd, prompted by factors including high feed costs and last year's shortage of labour in abattoirs and processing factories.

A gradual recovery in the breeding herd is expected, with numbers predicted to increase by 7,000 between June 2022 and June 2023.

Imports are expected to grow to fill the gap left by reduced domestic supplies, while UK demand drops as the cost-of-living crisis hits retail and restaurant sales.

For the region's wheat and barley growers, price volatility is expected to continue due to a "finely balanced global supply and demand, and the war ongoing in Ukraine".

Animal feed demand is expected to fall this season amid challenges including the bird flu epidemic which has hit poultry farms across East Anglia.