Fruit and veg prices tipped to rise as ABARES says value of farm produce to hit $65bn for 2020-21

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Shoppers should expect the price of fresh fruit and vegetables to rise and red meat to fall as farmers are expected to record their most valuable year yet.

The latest from Government commodity forecaster ABARES shows summer vegetables, stone fruit, apples, pears, and grapes could all be 15 to 25 per cent more expensive due to a shortage of harvest workers.

In the short term, imported fruit and vegetables will go some way to boosting supply and reducing a price crunch for consumers.

But in the longer term, ABARES predicts difficulties with transport, seasonal shortages, and import restrictions because of biosecurity concerns could all contribute to more expensive fresh food.

Despite high prices at the cash register it is good news for farmers, with the value of farm produce setting a new record, jumping seven per cent to $65 billion for 2020-21.

That is up from the previous record of $63.8 billion in 2016-17 and $59 billion last year.

The coronavirus pandemic, China’s trade sanctions, and a shift to rebuilding domestic sheep and cattle numbers mean that, according to ABARES, the value of exports will fall seven per cent year-on-year to $44.7 billion.

ABARES chief analyst Jared Greenville described the latest outlook as a great result for farmers after years of drought.

“It is a good time to be an Australian agricultural producer, but that’s not to say that the sector doesn’t have a few challenges around climate and the horticulture sector — say, around labour for this year — and trade,” Mr Greenville said.

Labour issues to drive up prices

Mr Greenville said farmers who relied on foreign workers to harvest their crops were struggling to recruit labour, with the number of working holiday makers in Australia halved due to travel restrictions.

He said while the worker shortage had not affected retail prices yet, it was expected to filter through to supermarkets and greengrocers in the new year.

“Prices of most horticulture products hitting wholesale markets have been pretty steady and as expected, but what we do know is that peak period for harvest and peak labour demand kicks off in February,” Mr Greenville said.

“That could put at risk some harvests in some areas, so we’re expecting prices to potentially rise between 15 to 25 per cent for some products.

“That will depend if there’s more domestic labour that producers can get a hold of.”

It is expected the labour shortage will drive-up the price of summer vegetables, stone fruit, pears, apples, berries and grapes.

But there could be better news for the bottom line when it comes to buying red meat, with ABARES expecting that prices would fall in 2021.

“World market prices for meat are also starting to come back a bit as China gets it African swine fever issue more under control,” Mr Greenville said.

“The pig herd is starting to rebuild, so that is putting downward pressure on that growth in protein and meat prices that we’ve seen over the last couple of years.

“For consumers heading down to their local supermarket it is not such bad news to have some of the heat taken out of the market.

“It’ll make some of those red meat prices more affordable at home as well.”

Mr Greenville said as farmers were experiencing better growing conditions they were holding on to livestock for breeding, rather than sending cattle and sheep to slaughter.

“There’s really high demand, particularly domestically for restocking. That’s actually held on longer than we’d expected,” he said.

The ABARES chief analyst said it was the winter crop, currently being harvested, that had driven the value of agriculture in 2020-21.

“Our weather really drives our production outcomes. We’ve had a good winter cropping season — the second best on record, the highest in New South Wales — and it’s really been the key driver in this bounce back,” Mr Greenville said.

Farm confidence never been so high

The ABARES outlook coincided with agri-lender Rabobank’s latest farm confidence survey which reported the “highest rural sentiment in two decades”.

The bank said farmers’ confidence had rebounded strongly from years of drought.

The National Farmers Federation (NFF) had set a target to grow the farm sector to be worth $100 billion by 2030, a goal supported by the Australian Government.

“While 2020 has been a year of great uncertainty and challenge for everyone in the community, for farmers the extraordinary turnaround in the season has also made it one to remember,” NFF chief executive Peter Knoblanche said.

“After years of drought and low or no returns for some, the tables have well and truly turned,” he said.

By national rural reporter Kath Sullivan (Original ABC Article)

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