Australian horticulture: Input costs skew lift in value of production

The value of the nation’s horticultural production has increased by three per cent, but rising input costs are impacting profits. See the latest.

The value of Australian fruit and vegetable production lifted 3 per cent in 2022-23, but input pressures including cost of fertilisers, labour and replanting flood-damaged crops are eating into profit margins, dampening the outlook for producers.

The Hort Innovation handbook, published today, put the total value of horticultural production for the 12 months to June 2023 at more than $16.25 billion.

However, horticultural production volumes softened 3 per cent during the same period, to 6.453 million tonnes.

Hort Innovation industry insights manager Lucy Noble said the value for producers in the future lay with industry developing export markets as a way to remedy rising input costs and price pressures.

“There are a few really positive stories, particularly looking at commodities with consistent growth in production volume such as avocados, with a growth in value in the past 12 months of 54 per cent,” Ms Noble said.

“Table grapes has had a lot of investment of time and resource in those export markets, and again year-on-year we’ve seen growth of 27 per cent on the previous financial year, which is really positive.”

Wholesale value per kilogram of fresh produce supplied to local markets lifted by 8 per cent to $3.15/kg, which was driven mostly by fruit.

Production values and export value for fruit and vegetables in the past 12 months have been quantified by the team at Hort Innovations. Picture: Supplied

The value of fruit production lifted 13 per cent to $6.32 billionin 2023, as tonnage of fruit declined by 1 per cent.

Vegetable production was $5.83 billion in 2022-23, a 5 per cent lift in value but a 3 per cent decline in tonnage produced.

According to the report, Australia exported $2.79 billion worth of horticultural product in the 12 months ending June 2023, with fresh fruit the largest value exporting group at more than $1.3 billion,or 47 per cent of total goods exported.

Asia represented 76 per cent of total Australian horticultural exports in 2022-23.

Ms Noble said it was critical to examine how input costs were affecting growers’ profit margins, particularly in light of decreasing volumes.

“The industry is facing troubled times in terms of the cost of production, and that needs to be taken into account … some investment long-term in growing markets is critical, and growing at a faster rate than the cost of production.

“Development in that market channel is critical.”