Low prices, high costs are causing a slump in grower confidence

A leading Tasmanian vegetable grower has said confidence in the industry may be much worse than the latest AUSVEG survey has shown. Results from AUSVEG’S latest survey showed grower confidence in the vegetable industry had declined by 3.5 per cent during July to September, when compared to the previous quarter.

“Australian vegetable growers are becoming more uncertain about the sustainability of their future within the industry,” AUSVEG chief executive Richard Mulcahy said. “If growers lack confidence in the industry they are less likely to invest and expand their operations, in some cases resolving to leave the industry all together.”

The survey involved a selection of ten questions relating to how confident growers felt about key economic indicators. “The most recent report conducted by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) shows that production costs have increased by an average of four per cent since 2012-13,.” Mr Mulcahy said

But Forth grower, Mike Badcock, said confidence may have taken an even bigger hit, since the survey was taken, due to the dry winter and spring.

“The economic situation being forced on them by the dominance of the retail food chains means they just don’t have any back up,” Mr Badcock said.

The economic situation being forced on them by the dominance of the retail food chains means they just don’t have any back up.

“Those that do have water are asking ‘are we going to get a crop ?’

“We are not going to get any more for that crop, but the cost of producing it is going to go through the roof.”

And Tasmanian Farmers and Graziers vegetable committee chairman Nathan Richardson agreed the survey reflected what growers were receiving.

“The demand is good for the produce, but there is no extra value in the market –   farmers have responded by being more efficient, over the years, with better quality produce, but the payback hasn’t been there.

Mr Richardson said some growers may have reduced plantings, while others had to buy in irrigation water.

“It wouldn’t matter if they were growing vegetables for processing or fresh sales, the margin is very tight, even in a good year,” he said.

Source:http://www.stockandland.com.au/story/3506912/grower-confidence-slumps/?cs=4786

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