By Growcom Chief Executive Officer Stephen Barnard
Last week the Australian Bureau of Agricultural and Resource Economics and Sciences, better known simply as ABARES, released a bullish outlook for Australian agriculture industries for the remainder of the 2021-22 financial year.
Gross value of total agricultural production is forecast to reach a record $73.0 billion in 2021–22, with the value of agricultural exports forecast to reach a record $54.7 billion.
This exceptional forecast is broadly a result of higher prices for most commodities combining with another near-record harvest due to favourable seasonal conditions.
The forecast for the fresh produce sector is similarly bouyant, with the farmgate value of horticultural production forecast to reach a record $12.4 billion in 2021–22.
This strong headline figure for horticulture is hiding however some fundamental weaknesses in the industry, with which growers will be only to familiar.
Higher values of production in large part reflect higher prices, which themselves reflect higher costs of production, particularly labour costs, which of course are a direct result of a critical shortage of workers.
And the shortage of workers? Well, that’s a result of state and federal decisions to restrict the movement of people in the interests of public health.
What we’re witnessing then is less of a long term trend toward greater growth, and more an artificial COVID bump.
Many growers will tell you the prices they’re receiving are in fact lower than before COVID. Most of the remaining growers will say while they might be getting a better price, they’ve still worn a higher increase still in their costs.
In other words, margins are tighter than ever before, and the benefits from the COVID bump aren’t being enjoyed equally across the supply chain.
ABARES rightly predicts in the short term that the mobility of seasonal workers along harvest trails spanning different regions within a state or between state jurisdictions will be key to reducing farm costs and therefore farm profitability, especially over spring and summer.
On behalf of the horticulture sector, Growcom continues to work collaboratively with the Queensland and Australian governments to ensure growers have greater certainty of labour supply, and have the safety protocols in place to manage COVID-19.