Farmers feeling the squeeze

TASMANIAN farmers are feeling the squeeze due to skyrocketing input costs.

Yolla Co-op general manager Ben Davis said their stock had seen extensive price rises from suppliers, both domestic and international, and the costs were passed on to farmers.

“Costs have gone up considerably in the last 12 months, one of the biggest movers being freight,” Mr Davis said.
“It’s the international market responding to supply and demand change.
“There isn’t the volume of shipping coming in with product to service consumers, particularly from Asia.”

One commodity, in particular that has seen a significant jump in cost is fertiliser.

AusTrade recorded that the average free-on-board price of fertiliser imports rose by 128 per cent from January to December 2021, with urea going from $256 to $1026; mono-ammonium phosphate (MAP) from $420 to $952 and potassium-chloride (MOP) from $357 to $822 per tonne.

“Urea and ammonias have basically tripled in price, and while urea is arguably still the cheapest source of nitrogen you can buy, you’re seeing farmers have to pay three times the price to get the same amount of fertiliser they’ve always been putting on,” Mr Davis said.
“It’s hitting high-input farms hard, and it’s coming off the bottom line.”

Perhaps the largest, and most obvious increase in costs, particularly in recent months, have been fuel prices.

The average retail price for diesel in March 2021 was $1.40, by March 20 this year the cost had risen to $2.28, an increase of more than 60 per cent.

Unleaded petrol prices have followed a similar trend, rising 56 per cent from $1.41 to $2.21 over the same time period.

Add huge increases in the cost of Adblue over the past year, mainly due to a lack of product being imported, freighting expenses are beginning to stack up on a product’s cost well before it arrives at the farmer’s gate.

“Commodity prices have remained strong, and the input costs going up at the value they have, I don’t think farmers are going to be making any more money than in the last few years,” Mr Davis said.

TFGA vegetable council chairman Nathan Richardson said that the current cost jump was just part of an ever-increasing rise farmers had been enduring and must adjust to.

“For far too long Australian vegetable growers have been paid very low prices for their produce and now with everything from service providers, machinery and inputs, the overheads within our business have all risen, it’s time there is a correction, where the price is paid back to the farmer.”

The Federal Government has attempted to ease the pressure by halving the fuel excise for the next six months.

This move will cut the rate by 22 cents and could see fuel prices fall below $2 a litre.

However, it’s not clear how long it will take for the savings to be felt at the bowser and if the full rate of the saving will be passed on the customers.

The RACT says the Federal Budget is a step in the right direction.

RACT chief advocacy officer Garry Bailey said members wanted better roads and fairer fuel prices and the Budget at least acknowledged the issues.

“The Federal Budget accepts that fuel prices are high and that more needs to be done to make Tasmania’s roads safer,” Mr Bailey said.