Deloitte were commissioned by AgriFutures Australia to put together a report entitled ‘The Impact of Freight Costs on Australian Farms’. This report confirms agriculture is vitally important to the strength of the economy with over 66 per cent of annual agricultural production exported overseas.
When speaking of Australia’s economic performance, there is always plenty of discussion about major indices associated with agriculture, resources etc, but rural trucking costs are a major factor in productivity.
“A key determinant in ensuring that Australian agriculture can reach its full export potential is maintaining efficient and competitive transport of food and fibre from paddock to port,” concludes the Farm Freight Costs Report. “At present, this cost is one of the largest single cost items in the production of many agricultural commodities, and it has the potential to impact the global competitiveness of Australian agriculture and its export performance into the future.”
“The impact of this transport cost on the viability of producers is further accentuated with the slowing of on-farm productivity across most sectors. Aside from specific and limited case studies, there is very little information about the precise magnitude of this transport cost and its drivers.”
“In Australia, freight costs are relatively highest for grains and fruit/vegetables, which represent 27.5 per cent and 21 per cent of gross value of production (GVAP), respectively. By comparison, poultry, which has more localised supply chains, has the lowest relative farm freight costs, totalling 1.0 per cent of GVAP.”
