AUSVEG

Costs put crunch on carrot growers’ profits

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Source: AUSVEG

Aussie carrot growers are experiencing tough financial conditions, similar to many other vegetable producers, as increasing costs drive falling returns, according to data from the Australian Bureau of Agricultural Resource Economics and Sciences (ABARES).

The latest data illustrates that carrot growers’ returns, on average, have been falling since 2007-08.

“This clearly shows that Australian carrot growers have been struggling for at least half a decade with returns trending downwards,” said Mr Shaun Muscat, AUSVEG Economist.

Rising production costs have undoubtedly been squeezing carrot growers the most, with financial outlays outpacing the prices growers are receiving for their produce.

“For example, from 2007-08 to 2011-12, average domestic carrot prices fell by 24 per cent, while average costs increased by 42 per cent,” said Mr Muscat.

The significant rise in production costs is a familiar story and isn’t an isolated issue for carrot growers, with production costs for most vegetables increasing, particularly in the last five years.

AUSVEG is the leading voice in Australian horticulture, representing 9,000 vegetable and potato growers.

“Australian carrots are a key and important industry, feeding people in Australia and around the world. Carrots and turnips were Australia’s largest exported vegetable commodity, representing over 20 per cent of all vegetables exported in 2012-13,” said Mr Muscat.

In 2013-14, Australia exported approximately $56 million worth of carrots, a 9 per cent increase from the previous year.

Australia’s largest carrot exporting destination was the United Arab Emirates, totalling $17 million. Australia also exported carrots to Singapore ($9 million), Malaysia ($7 million) and Saudi Arabia ($7 million).

AUSVEG is developing a series of ‘Veggie Stats’ documents to profile different crops. The commodities analysed include lettuce, cabbage, carrots, broccoli, pumpkin and cauliflower. Veggie stats studies are currently being featured in each issue of the industry magazine, Vegetables Australia, with carrots featuring in the September/October edition, released this week.

The data underpinning the Veggie Stats documents is largely sourced from ABARES and the Global Trade Atlas. This project has been funded by Horticulture Australia Limited (HAL) using the National Vegetable Levy and matched funds from the Australian Government.

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