Australian vegetable domestic wholesale prices declined in 2014-15, ABARES report
A report from Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released today claims that Australia’s domestic wholesale vegetable prices were 6 per cent lower on average in the financial year ending 30 June 2015 compared with the previous year.
The “Australian vegetable growing farm businesses, an economic survey, 2013-14 and 2014-15” report also found that whilst prices dropped, production costs jumped, an average of 4 per cent higher on the previous year.
The average cost of running a vegetable farm in Australia in the financial year ending 30 June 2015 was AUD$ AUD$640, 00 per farm whilst in the financial year ending 30 June 2014 it was only AUD$614, 090.
Cash receipts from vegetables dropped by 7.8 per cent across the same financial year periods, with the average receipt AUD$714, 000 in 2014-2015 down from AUD$774, 900 in 2013-2014.
Andrew White, Deputy CEO of AUSVEG, which is Australia’s vegetable growers representative body said that the findings reflected the number of closures of small Australian vegetable farms.
“The effect of these financial difficulties is likely to have been a factor in the 24 per cent drop in the number of small vegetable farms within Australia in 2014-15,” said White.
“Small business [in the vegetable growing sector] confidence is also much lower, with 21 per cent of existing small vegetable growers indicating that they are likely to exit the market completely next year,” White concluded.
Other key facts from ABARES report
- The Australian vegetable growing industry contributed to 7 per cent ($3.8 billion) of the gross value of agricultural production in 2014–15.
- From 2007–08 to 2014–15 the value of vegetable production in Australia fluctuated between $3.4 billion and $4 billion, accounting for around 7.4 per cent of the gross value of agricultural production over this period.
- The industry’s gross value of production has grown at an average annual rate of 2.4 per cent in real terms between the early 1980s and 2014–15. Since 2006–07 the average annual rate of growth has slowed to below 1 per cent a year (in real terms).
- Despite the recent drop, between 2005–06 and 2013–14, the estimated average farm cash income of Australian vegetable growers remained relatively constant. Over this period, increased estimated average total cash receipts were matched by increased estimated average total cash costs. This reflects an increase in the size of vegetable growing farms and a shift towards highvalue, high-cost vegetable crops.
- Nationally, farm debt fell by 15 per cent during 2013–14 to an average of $474 700 (in 2014–15 dollar terms). Estimated average farm debt held by vegetable growing farms declined across all states except Tasmania.
- Around 35 per cent of Australian vegetable growing farms reduced overall farm debt in 2013–14, mostly as a result of a cash flow surplus (that is, profit). In comparison, 22 per cent of farms increased debt—mostly for the purpose of purchasing land.
The report was commissioned by Horticulture Innovation Australia using the National Vegetable Levy and funds from the Australian Federal Government.