Australian vegetable growers continue to feel pressure from rising costs

Australian vegetable growers are continuing to do it tough, according to new data released by the Australian Bureau of Agricultural Resource Economics and Sciences (ABARES). The latest data for vegetable levy-paying growers shows that increasing financial pressures are being driven by costs, which have risen by 10 per cent since 2011-12, resulting in falling returns.

“While average total cash receipts per farm have notionally increased slightly over the survey period, total cash costs have risen by an even greater margin, putting enormous strain on Australian growers and their businesses,” said Ausveg spokesperson, Andrew White.

“Australian vegetable growers continue to feel pressure from rising costs such as escalating electricity, fuel and labour costs, that are impacting on returns and making it harder to remain profitable,” said Mr White.

The significant rise in production costs is a familiar story and isn’t an isolated issue for specific commodities, with production costs for most vegetables increasing, particularly in the past five years.

“The Australian vegetable growing industry is a vital part of the functioning of this country and especially important to regional communities, contributing close to $4 billion annually to our economy and employing thousands of workers nationally,” said Mr White. “Overall vegetable industry production in Australia contributes around 7 per cent to Australia’s gross value of agricultural production, but action is needed to ensure the long-term viability of many growers.”

According to the report, average to above average seasonal conditions experienced in 2013-14 helped growers to maintain the same high yields as seen in the preceding year. The average area planted to vegetable crops also increased, resulting in overall high vegetable production, but this was offset by generally lower prices.

Average total cash costs increased more rapidly than total cash receipts, with average farm cash income estimated to have declined by 6pc when compared to 2012-13 and profits estimated to have fallen by 25pc in the same period.

This is the eighth Australian vegetable survey conducted by ABARES on behalf of Horticulture Australia Limited (HAL). This project has been funded by HAL using the National Vegetable Levy and matched funds from the Australian Government.

For more information:
Andrew White
Ausveg
Phone: +61 (03) 9882 0277
Fax: +61 03 9882 6722
E-mail: andrew.white@ausveg.com.au
www.ausveg.com.au