Horticulture farmgate returns: Australia’s most valuable fruit and veg crops

The crops that contribute the most farmgate value to the $16.3bn horticulture sector are delivering growth despite headwinds.

The crops driving horticulture industry growth have been revealed, with 12 of the 15 most valuable fruit, nut and vegetable sectors increasing their farmgate worth in 2023.

Analysis of Hort Innovation statistics for the 2022-23 financial year show potatoes contributed a whopping $1033.5 million to horticulture’s $16.254 billion annual production value.

The humble spud is second only to the nursery category, with a production value of $2777.5 million and includes plants grown for landscaping and revegetation as well as seedlings for commercial fruit and veg farming.

The national potato harvest of 1.463 million tonnes was up by less than 1 per cent year on year. But its farmgate value swelled by $203.3 million, a 24.5 per cent increase (nursery value decreased by about 2 per cent.)

Newlyn potato grower Kain Richardson said farmgate potato prices were moving in the right direction, but needed to keep up with escalating costs to ensure growers could continue making productivity gains.

“It’s not getting any easier,” said Mr Richardson, who grows potatoes for the processing market. “You just have to be mindful of what you invest in and the best way in which to make productivity gains without spending too much.

“The problem in Australia is manufacturing costs are very high compared to globally, and growers need to be mindful of that.”

NEWS: Kain Richardson Potato farmer at Newlyn. Picture: Zoe Phillips

He said poor energy policy and an increase in regulatory red tape was making it hard for businesses like his to operate.

The top 15 fruit, nut and vegie crops by value combined are worth more than 50 per cent of horticulture’s $16.254 billion value, with 59 minor crops making up the rest.

While many of the top crops have enjoyed value growth despite challenging weather and seasonal conditions, other darlings of the horti world have had a more turbulent time.

Avocados, worth $560.7 million in 2023, are on the path to recovery after a shocking price dive in 2022, brought on by a glut that forced some growers to dump fruit.

John Tyas, Avocados Australia chief executive.

Avocados Australia chief executive John Tyas said the drastic increase in national harvest – ballooning from 78,085 tonnes to 122,197t from 2021 to 2022 – caused a crisis, with “limited market opportunities” immediately available.

In 2023, avocado harvest settled at 115,385 tonnes – with an average price per tonne of $4859, up by more than 63 per cent year-on-year.

“The bounce back we’ve seen is due to domestic consumption increasing,” Mr Tyas said. “With lower retail pricing new consumers have come into the category. We have also seen a dramatic increase in export volumes.”

Exports swelled from 3155 tonnes in 2021 to more than 10,500t in 2023, with Hong Kong, Singapore and Malaysia combined accounting for 96 per cent of the international market.

Mr Tyas said another decent crop was expected this year, but domestic demand and continued record exports should keep prices steady.

Tight margins were also a concern.

“Costs are skyrocketing for fertiliser, fuel, compliance, energy, plus the ongoing costs of reliable labour force which is also an ongoing challenge,” Mr Tyas said.

A global avalanche of almonds has also been a dampener for growers, with the nut that has been a true success story over the past decade struggling through a shocking 2023.

Worth $523.4 million, the national almond harvest in 2023 totalled 103,381 tonnes, with an average price of $5062 a tonne. This was down almost 40 per cent in total value, down more than 26 per cent by volume, and down more than 17 per cent by value-per-tonne year on year.

Demand for plant-based foods has driven strong consumer demand growth for nuts, but the almond market is reaching saturation point.

Almond Board of Australia chief executive Tim Jackson said prices were dictated by global supply, and consecutive bumper harvests in California had depressed the market.

Despite Australia’s smaller harvest in 2023 – caused in part by problems during pollination – he said the industry had sold more than 125,000 tonnes during the same production season.

“We’ve sold more than we’ve grown,” he said. “Crop carry-over from previous seasons has been cleared out; that underlines counter-seasonality and origin still has a market.”

With the 2024 harvest now in progress, the industry expected to hit 164,000 tonnes in 2024, Mr Jackson said.

While prices had started to recover in the past six months, a positive harvest forecast out of the US last week had again put downward pressure on prices.

“They’ve just come through a bloom, and are anticipating their crop could be a lot higher (yielding than first forecast),” he said.

In demand for its healthy credentials in a world obsessed with plant-based diets, almonds had consistently enjoyed consumption increases averaging 9 per cent a year, Mr Jackson said.

“We’ve seen that drop off and flatten in the past two years for a number of reasons,” Mr Jackson said. “In the past 12 months, California for the first time has a smaller footprint for almonds than the year before.

“The California experience suggests that at the moment we’ve already surpassed the peak of global production in almonds.”

He said the long-term outlook for water availability in the Murray-Darling Basin and the uncertainty about pollination services due to varroa mite could stifle growth.

“The long-term case study for almonds is still strong. You wouldn’t be saying pull your trees out tomorrow,” he said. “But you certainly would be taking heed of what is going on in California and not putting more trees in.”