Vegetable Industry Financials

Cash cost per tonne

The cash costs per tonne for most vegetable growers of different commodities increased on average from 2012-13 to 2013-14. However, the cash costs of cabbage per tonne decreased by 26 per cent from 2012-13 to 2013-14, from $333 per tonne to $246 per tonne. The cash costs per tonne of tomatoes and pumpkins increased over the same period, by 47 per cent and 18 per cent respectively.

Despite cash costs per tonne of potatoes being relatively low at $228 in 2012-13, an increase by 2 per cent was seen from 2013-14.  Carrot also had a relatively large decrease from 2012-13, at 9 per cent leading to the cash costs per tonne of carrots being $292 in 2013-14.

Unfortunately, the Australian Bureau of Agriculture and Resources and Economic Sciences was unable to provide individual commodity cash costs for the financial year 2014-15.

Cash Costs – Average per Farm ($/tonne)

 

2010-11

2011-12

2012-13p

2013-14p

2014-15y

Cabbage

690

423

333

246

na

Broccoli

1,140

1,097

1,339

1,393

na

Lettuce

828

798

1,001

1,047

na

Carrot

229

255

323

292

na

Onion

331

196

299

291

na

Tomato

762

377

677

994

na

Cauliflower

615

614

645

348

na

Greenbeans

1,254

1,062

915

1,150

na

Greenpeas

na

na

na

na

na

Pumpkins

537

358

359

425

na

Potato

210

250

233

228

na

p: Preliminary estimate, y: Provisional estimate

Source: Australian Bureau of Agriculture and Resources and Economic Sciences Vegetable Farm Survey Report, various years.


Overall cash costs

Vegetable growers have seen a decline in production costs (decrease of 10 per cent), particularly labour, which is the largest production cost on average for Australian growers which decreased by 6 per cent during the period 2013-14 to 2014-15.

Production costs (especially labour) continue to be an issue for growers, especially smaller growers who do not benefit from economies of scale.

 

Production Costs – Average per Farm ($)

Source: Australian Bureau of Agriculture and Resources and Economic Sciences Vegetable Farm Survey Report, various years.


Prices for different vegetables

  In 2014-15, prices for some of the main vegetables produced are estimated to have decreased due to above average seasonal conditions causing an increase in supply.

Comparisons of actual prices received in 2014-15 showed that broccoli prices were the highest at $2,010 per tonne, followed by lettuce at $1,686 per tonne. The vegetables with the lowest prices were cabbages at $335 per tonne followed by potatoes at $378 per tonne.

Prices of vegetables ($/tonne)

 

2010-11

2011-12

2012-13

2013-14p

2014-15y

Cabbage

808

602

441

355

335

Broccoli

1,522

1,466

1,574

1,834

2,010

Lettuce

1,368

1,366

1,649

1,566

1,686

Carrot

288

522

455

476

476

Onion

503

275

492

495

468

Tomato

947

883

1,086

1,643

1,443

Cauliflowers

715

885

932

681

668

Greenbeans

1,723

1,600

1,593

1,858

1,761

Greenpeas

1,571

1,181

857

1,411

1,132

Pumpkin

420

443

416

391

394

Potatoes

398

373

376

376

378

p: Preliminary estimate, y: Provisional estimate

Source: Australian Bureau of Agriculture and Resources and Economic Sciences Vegetable Farm Survey Report, various years.


Profits of vegetable farms by state

Particularly in recent years, Australian vegetable growers have experienced a difficult operating environment, largely due to rising production costs. Since 2007-08, Australian vegetable growers’ average cash receipts have increased by 48 per cent to $711,000; however, this has been disproportionately offset by an increase in vegetable growers’ total cash costs by 71 per cent to $641,000. This increase in cash costs has contributed to a decrease in average farm business profit for vegetable growers by 53 per cent since 2007-08.

After 2007-08, Australian vegetable growers’ profits were highest in 2011-12 at $64,900 which coincided with the biggest discrepancy between vegetable cash receipts and total cash costs. Business profits for most states have fluctuated extensively, however, on average, the best performing states (in terms of business profits) have been South Australia, Western Australia and Victoria.

Of all states, Western Australia’s profits have been the most impressive, with the three-year average around $228,000, followed by Victoria’s average of $146,000 and South Australia’s average of $116,000. In contrast, New South Wales is the only state to consistently make losses over the last three years, averaging a loss of $17,563 from the last three years.

Farm business profits for National Vegetable Levy payers in each state and Australia (Average per farm)

 

2010-11

2011-12

2012-13

2013-14p

2014-15y

New South Wales

 -24,310

-2,790

-2,8860

-3,2700

7,000

Victoria

163,840

-7,850

183,180

322,700

287,000

Queensland

40,520

71,110

16,410

-18,400

53,000

South Australia

103,070

126,630

117,620

11,600

24,000

Western Australia

33,960

210,150

205,470

289,700

156,000

Tasmania

-580

76,000

7,490

29,800

103,000

Australia

39,430

64,900

53,210

79,700

87,000

p: Preliminary estimate, y: Provisional estimate

Source: Australian Bureau of Agriculture and Resources and Economic Sciences Vegetable Farm Survey Report, various years.


Rate of return per state

When benchmarked against the Australiana average, New South Wales rate of return has been consistently less since 2010-11, with the rate of return being negative in all years besides 2011-12 and 2014-15.

Despite Victorian growers’ production costs being considerably higher than the national average, their rate of return has been outperforming the national average for most years (except in 2011-12, where Victorian growers expended the most on contracted work out of any other year). Queensland growers had lower average prices for their vegetables, which contributed to a sharp decline in their rate of return from 2012-13 to 2013-14.

In 2014-15, most states improved their rate of return. New South Wales reported a positive rate or return for the first time in five years. The largest improver was Queensland which reported an average rate of return on 3.7 per cent, representing 2 per cent growth upon the rate of return in 2013-14.

Rate of return1 for National Vegetable Levy paying growers (Average per farm)


2010-11

2011-12

2012-13

2013-14p

2014-2015y

New South Wales

-0.4

0.6

-0.6

-0.4

0.6

Victoria

4.6

1.6

5.2

6.5

5.7

Queensland

3.0

4.4

2.0

1.0

3.7

South Australia

6.3

5.3

4.7

1.1

1.6

Western Australia

2.0

4.7

4.0

6.6

3.7

Tasmania

1.6

3.7

1.5

2.4

3.9

Australia

2.8

3.4

2.5

3.4

3.5

p: Preliminary estimate, y: Provisional estimate, 1Excluding capital appreciation.

Source: Australian Bureau of Agriculture and Resources and Economic Sciences Vegetable Farm Survey Report, various years.


Vegetables produced

The gross value of the vegetable industry production is estimated to have been around $3.3 billion in 2014-15, contributing around 6 per cent to Australia’s gross value of agricultural production.

Potatoes have the highest gross value of production out of all other vegetables, contributing almost $620 million to the vegetable industry which represents an 18 per cent share.

Top five Vegetable Commodities by Gross Value ($m)

Source: Australia Bureau of Statistic, Catalogue 7503, Value of Agricultural Commodities, 2014-15

 

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This project is funded by Horticulture Innovation Australia Limited using the National Vegetable Levy and funds from the Australian Government.