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Asparagus industry in NSW faces decline due to labor costs and supermarket pricing pressures

In the central west of New South Wales (NSW), a notable shift has occurred within the asparagus sector, tracing back to the 1950s when Ed Fagan's family initiated asparagus cultivation near Cowra. Decades of evolving market dynamics, particularly the escalation of labor costs and pricing pressures exerted by major supermarkets, have prompted Fagan to discontinue asparagus production in favor of other vegetables. This decision underscores a broader trend impacting the asparagus industry at large, with NSW previously being a significant contributor to Australia's asparagus output, now predominantly centered in Victoria.

The industry-wide pivot away from asparagus cultivation is further evidenced by AusVeg data, revealing a near 50% reduction in production to 5,500 tonnes by 2023 since 2019. The crop's labor-intensive nature, requiring daily attention throughout its three-month pre-harvest period, contributes to labor expenses constituting 85% of its total production cost. Despite these rising costs, retail prices at major supermarkets have not seen a corresponding increase, with current pricing structures reportedly unsustainable for growers.

Supermarket chains such as Woolworths and Coles have defended their pricing strategies, highlighting the influence of factors like weather, seasonality, supply, and demand on market prices. However, the NSW Farmers Horticulture Committee has voiced concerns over the viability of asparagus farming, citing disproportionate returns to growers relative to retail pricing.

The impending implementation of a new grocery code of conduct aims to ensure fair treatment of suppliers by major supermarkets, yet skepticism remains regarding its efficacy for perishable goods producers. Concurrently, the global asparagus market is witnessing increased imports from countries like Peru and Mexico, attributed to their lower labor costs, potentially reshaping domestic supply dynamics.

This shift is accompanied by a decline in Australian asparagus exports, particularly to Japan, Australia's primary international market, which has increasingly turned to Mexican and Peruvian sources during the pandemic. The challenge of reclaiming market share in Japan highlights the complexities facing Australian asparagus growers, amidst evolving market and regulatory landscapes.

Source: ABC News

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