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Australian potato growers feeling financial pinch

15 August, 2014

Aussie potato growers are battling similar financial pressures to the broader vegetable industry, with costs rising and returns falling, according to data from the Australian Bureau of Agricultural Resource Economics and Sciences (ABARES).

The latest figures suggest that Australian potato growers' returns on average fell by almost 50 per cent in 2011-12, compared to the previous year.

These diminished returns are being driven by increasing production costs coupled with the relative stagnation of average prices received by growers.

"For example, since 2007-08, average domestic potato prices have increased by just 7 per cent, while average costs have increased by 31 per cent," said AUSVEG spokesperson Andrew MacDonald.

"This surge in potato production costs is largely consistent with the national average production costs for all vegetables, which have increased, particularly in the past five years."

Production costs

In 2012-13, potato growers' production costs largely consisted of fertiliser, which represented 19 per cent of their total costs, and seed (14 per cent). Other production costs confronting potato growers included labour (13 per cent), repairs and maintenance (10 per cent), fuel, oil and grease (10 per cent) and chemicals (10 per cent).

AUSVEG is the leading horticultural body representing Australia's 9,000 vegetable and potato growers.

"This data shows just how important it is that Australian potato and vegetable growers find innovative methods of reducing costs and increasing returns in these difficult financial circumstances," said MacDonald.

"Building exports is another strategy which has been identified as a means of opening up new markets."
In 2012-13, Australia exported approximately $24 million worth of fresh potatoes, excluding seed. These exports have increased by almost 250 per cent since 2007-08.

Exports to Asia and the Middle East

The majority of Australia's fresh potato exports have been directed to Asia and parts of the Middle East, with exports to Indonesia equalling $7 million, South Korea $6.3 million and Thailand $3.7 million in 2012-13.

The data has been largely sourced from the ABARES and the Global Trade Atlas. A more detailed overview is contained in the current edition of Potatoes Australia magazine. Industry communication is funded by Horticulture Australia Limited using the National Potato Levies and matched funding from the Australian Government.

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