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South Australian growers confront a 21.6% reduction in farmgate prices in 2023

New data from the Horticultural Coalition SA (HCSA) reveals a significant 21.6% reduction in farmgate prices for South Australian growers in the 2022/23 financial year. As consumers grapple with rising living costs, and supermarkets face scrutiny over pricing practices, the HCSA sheds light on the challenges faced by local growers.
Despite increased costs for labour, power, packaging, fuel/transport, and other essentials, the average prices of key produce lines have seen a notable decline per kilogram, compelling growers to navigate a tougher economic landscape.

The HCSA's latest data collection highlights the reductions in average prices per kilogram for key produce:
• Potatoes: $0.45 per kg, down from $0.52 in 2021/22
• Tomatoes: a decrease of $1.03/kg
• Citrus: down by $0.13/kg
• Cucumbers: a reduction of $1.06 each
• Mushrooms: down by $1.09/kg
• Bunch lines down 20% in price and 30% in volume

Angelo Demasi, President of the HCSA, expressed concern, stating, "Farmgate and wholesale prices have regressed over the past five years, while supermarket chains maintain gross margins and continue to exert pressure on producers. It's time for supermarkets to reassess their costs and compensate growers fairly for their efforts."
The data shows, although SA growers started to see farmgate prices increase between the 2020 and 2022 financial years due to COVID and floods, the average farmgate price in 2023 for fruit and vegetables is back down to $0.98 cents per kg whilst volumes produced has increased to 1,181M kg.

Demasi issues a stark warning regarding the future of Australia's horticultural industry, cautioning that persistent reductions in farmgate prices by major supermarkets could lead to a devastating 30% exit of the horticultural sector within the next five years. This alarming trend not only jeopardizes the livelihoods of local farmers but also poses a significant threat to the availability of homegrown produce in Australia.

Demasi expressed concerns that this decline could inadvertently play into the hands of major supermarkets, paving the way for an influx of frozen Chinese fruit and vegetables. Such a shift could have detrimental consequences for consumers, affecting both the quality and variety of locally sourced produce. Demasi calls for a collaborative effort from stakeholders across the supply chain to address these challenges and ensure the long-term sustainability of Australia's horticultural sector.

Demasi further adds, “The South Australian Horticultural industry contributes $1.1 billion in farmgate sales to the South Australian economy. "

AUSVEG SA CEO, Jordan Brooke-Barnett said that results were concerning for both the industry and broader community. “At a time where the duopoly are posting billion dollar profits it is unconscionable that producers are expected to produce for meagre returns while according to our industry data the supermarkets charge an average of 300% and up to 800% plus mark ups on fresh produce staples”, said Mr Brooke-Barnett.

For more information:
Penny Reidy
South Australian Produce Market Limited
Tel: +61 08 8349 4493

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