Cost of fruit, vegetables to rise more after supermarkets warn of price hikes

The price of fruit and vegetables is predicted to stay high with staff shortages and other issues continuing to cause pain for consumers.

The cost of fresh fruit and vegetables is expected to remain high despite plentiful supplies of most produce.

According to the latest report from the Australian Department of Agriculture, Water and the Environment, the increased costs of getting fresh produce to consumers is expected to keep prices high.

The news will not be welcomed by many Australians who are struggling to stay on top of rising grocery bills as well as spiking petrol prices.

Woolworths and Coles have also recently warned of more pain at the checkout for certain goods such as meat, due to the impacts of a prior drought, inflation and as one supermarket giant grapples with a staff underpayment scandal. However, Woolworths says prices for fruit and vegetables so far this financial year is lower on average than in 2020/21 due to “favourable growing conditions”.

It was hoped that the re-opening of Australia's borders and return of backpackers would push prices down further but authorities have put a dampener on this.

The ABARES agricultural commodities report for March noted a shortage of workers due to the spread of the Omicron Covid variant has created supply chain challenges that continue to impact farms as well as distribution networks.

Large supermarkets in particular rely on long supply chains, with some fruit and vegetables travelling significant distances.

“The reduced workforce during summer has not only affected farm operations but also disrupted the distribution networks of major supermarkets, with staffing shortages causing some fresh produce to be temporarily unavailable in grocery aisles,” the report said.

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Food shortages in Cairns due to the spread of Omicron. Picture: Brendan Radke

The spread of Omicron earlier this year meant many truck drivers had to isolate, leading to food shortages in some supermarkets.

Smaller greengrocers, which tend to source their produce from multiple suppliers and from local farms, have been less impacted by the supply chain disruptions, but they are not immune to staffing shortages.

Farms have also grappled with worker shortages due to the pandemic, despite many producers offering higher wages for fruit pickers.

The return of backpackers is expected to improve this eventually but if travellers are slow to return this could push prices up even more.

“There remains a risk that a more staggered return of working holiday makers could constrain labour supplies further than anticipated, resulting in a scenario whereby higher labour costs could place greater upward pressure on farmgate prices,” the report said.

Fortunately the production of most fruit and vegetables over summer and autumn is expected to be plentiful, supported by favourable seasonal conditions and low water prices.

It’s hoped the return of backpackers will help to keep the price of fruit and vegetables down. Picture: iStock

Despite the issues, Australia is looking at a bumper year for farmers.

Minister for Agriculture and Northern Australia, David Littleproud said the gross value of Australia’s agricultural production, including fisheries and forestry, is forecast to be a record-breaking $86.8 billion in 2021/22.

Exports are expected to top a record $64 billion.

“ABARES are predicting that Australia’s production will increase across most livestock and crop commodities. This year will be our largest total volume of agricultural commodities ever,” Mr Littleproud said.

“That’s an enormous effort in the face of some of the biggest challenges Australian agriculture has faced, from fire, mouse plagues, flood, drought and Covid-19.

“Despite all this, Australian farmers have simply got on with the job and continued to produce the best food and fibre in the world.”

Originally published as Cost of fruit, vegetables to rise more after supermarkets warn of price hikes