Rising costs of production, including wages, are putting the squeeze on Australia’s vegetable and onion growers, according to the second national benchmarking report on the sector.

The Level Up Hort Vegetable and Onion Benchmark provides a nationwide snapshot of the Australian vegetable and onion industries, highlighting their strengths and some of the challenges faced by growers.

Analysis of farm business performance during 2023-24 showed the average of all growers generated profit (measured as earnings before interest and tax) of $4233/ha, while the least profitable recorded an average loss of $8522/ha.

The top 25 per cent of vegetable and onion businesses generated an average profit of $17,353/ha.

Level Up Hort project leader Steff Carstairs said almost twice as many businesses took part in 2024, making it difficult to draw overall comparisons with the previous year.

Analysis of businesses that took part in both years showed some did better and some did worse in 2024.

However, farm equity, return on assets managed and EBIT margin — funds left over to cover finance, tax obligations and reinvest in the business or elsewhere — were all lower than in 2023.

Ms Carstairs said the decline in position echoed anecdotal reports of continuing hardship for many vegetable growers, which had been aggravated by conditions such as drought, heat and floods, and rising labour, electricity and transport costs.

“Lots of localised issues collectively have had a negative impact on the industry,” she said.

“Rising costs has had the biggest impact. And without that parallel growth in income, labour continues to be a hot topic ... there’s been a lot of discussion around labour, increased costs of labour and challenges with securing and retaining labour.

“In general, labour continues to be a pain point for horticultural businesses, and a major cost. Those who seem to be doing better have greater efficiencies around their labour management.”

For the most profitable businesses, labour accounted for 35 per cent of income, compared to 36 per cent for average growers and 51 per cent for the least profitable.

Data in the report represents businesses producing 5596 hectares of vegetables and onions in NSW, Queensland, South Australia, Tasmania, Victoria and Western Australia.

Hort Innovation chief executive officer Brett Fifield said the report will be used to help guide growers in their decision-making and implementing on-farm practices.

“It is very difficult to manage what you can’t measure, so Hort Innovation has funded the Level Up Hort project to help gain a further understanding of the vegetable and onion industries via consistent benchmarking,” he said.

A free webinar on Wednesday, July 9, will discuss the key findings of the benchmarks, implications for vegetable businesses and ongoing challenges facing the industry.

The webinar will be presented by project delivery partners Planfarm and RMCG. Register for the webinar, which starts at 1pm, at: leveluphort.com.au

To inquire or enrol in the Level Up Hort program, contact Steff Carstairs on 0428 712 852, email steff@planfarm.com.au or go to the website for more information.

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Tuesday, 10th October 2023

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