A new report released on 8 December by the Australia Bureau of Agricultural and Resource Economics and Sciences shows domestic vegetable prices were 6 per cent lower on average in 2014-15.
The report shows average vegetable farm costs were $640,000 per farm in 2014-15 in comparison to $614,090 in the 2012-13 financial year. Furthermore, cash receipts from vegetable sales have fallen by 7.8 per cent from $774,900 in 2013-14 to $714,000 in 2014-15.
AusVeg deputy chief executive Andrew White said decreases in the prices received for produce coupled with the increase in average farm costs have reduced grower’s margins and cash flow considerably.
“Smaller sized farms tend to be the hardest hit by tighter margins as they generally have less liquidity on hand, therefore making it more difficult to obtain loans from financial institutions due to an increased perceived risk. Less access to funds means that growers are much less likely to be able to invest in future capital projects,” said Mr White.
“The effect of these financial difficulties is likely to have been a factor in the 24 per cent drop in the number of small vegetable farms within Australia in 2014-15. Small business confidence is also much lower, with 21 per cent of existing small vegetable growers indicating that they are likely to exit the market completely next year.”
