More than half of Australia's vegetable and onion growers are either making a loss or only just covering costs of production and depreciation, according to the first national benchmarking report on the sector.
The Level Up Hort report launched in Melbourne earlier this month (4 June) provides a nationwide snapshot of the Australian vegetable and onion industries, highlighting their strengths and some of the challenges growers face. Analysis of farm business performance during 2023 or 2022-23 showed the average of all growers generated profit (measured as earnings before interest and tax) of $2906/ha, while the least profitable recorded an average loss of $16,827/ha.
Planfarm director of horticulture and agronomy Paul Omodei said the figures were a warning sign that action was needed to address rising costs such as labour, which was a major cost for growers and becoming increasingly expensive. "Labour costs per hectare and as a percentage of income have increased significantly. It's also taking more labour to do the same job than it was five to 10 years ago due to legislative changes imposed on growers. Good businesses are doing okay – they're spending more money to make more money – but that is a higher risk model than what we've seen in the past, so they're a bit more financially exposed if things go wrong."
For the most profitable businesses, labour accounted for 32% of income, compared to 40% for average growers and 63% for the least profitable. The average and least profitable growers also relied on family labour three to eight times more than the most profitable.
Omodei said the top 25% of vegetable and onion businesses – which weren't necessarily alike, covering a range of sizes, locations, and growing a variety of different produce – generated average profit of $22,567/ha.
"There are some businesses that are doing well, but they're in a high risk position. And then the bulk of the data set, the rest of them, are only just keeping their heads above water and some have made a massive loss this year. So in the short to medium term, the industry needs to act."
Omodei urged peak industry bodies and advisers to continue supporting growers to become better managers and use their workforce more efficiently. The Level Up Hort program is a five-year initiative fully funded through Hort Innovation, providing specialised business consulting valued at up to $10,000 per year to vegetable and onion growers.
A free webinar on Wednesday, 3 July, will be held to introduce the program. Omodei will explain what's in it for growers, how they can take part, and answer questions.
Register for the webinar, which starts at 2pm (AEST), 1.30pm (ACST),12pm (AWST), at www.leveluphort.com.au
For more information:
Steff Carstairs
Level Up Hort program
Tel: +61 0428 712 852
Email: [email protected]