By Growcom CEO Stephen Barnard
Over the past week we’ve been inundated with requests for comment from any number of well-intentioned journalists looking to establish a link between the recent devastating rain and flood event through Queensland and New South Wales and increased fresh produce prices for consumers.
Needing to sell newspapers and advertising space, there’s almost a little disappointment in their voice when we tell them the effect in the grocery aisle should be negligible as the crops grown in the hardest hit areas are also grown in other parts of Australia, that our markets are national in scale, and that production is spread far and wide. That is, in summary, it’s unlikely one natural disaster could be so catastrophic as to rock the horticulture industry, any one crop, or the supply chain.
The exception which many people will remember, which also illustrates the point, is the high prices paid in 2011 for bananas following Cyclone Yasi which hit hard both Innisfail and Tully where upwards of three-quarters of Australia’s bananas are grown.
This is not to say however that prices for fresh produce shouldn’t be higher right now, and continue to increase.
Recent analysis completed by AUSVEG, the national peak body for the vegetable industry, shows growers are dealing with record prices for farm inputs, yet there remains virtually no movement on price at the farm gate and retail level.
This means growers are continuing to bear the brunt of global trade conditions, absorbing rising costs of chemical, fertiliser, fuel, lumber and labour costs without any relief in price from buyers.
The analysis reveals key agricultural inputs, both fertiliser and fuel, have on average increased in price over the past two years by 110 percent.
While all horticultural businesses vary in terms of their production costs, vegetable growers’ businesses are facing between 25-40 per cent increase to their cost base.
In the same period a basket of the most common vegetables, carrots, potato, lettuce and broccoli, has only cost consumers 7.5 percent more, while other agricultural commodities like wheat, cattle and milk have risen by 39, 136 and 22 percent respectively.
We need to start a conversation with consumers. Higher prices for fresh produce are essential if we’re to maintain a healthy and sustainable horticulture industry in Australia.
And Growcom joins with AUSVEG in calling on retailers and buyers to ensure that farmgate prices that growers receive for their produce better reflect the current economic climate to ensure the financial viability of growers.