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TAS Country : April 7th 2011
Friday, April 8, 2011 Tasmanian Country 9 Expand or find a niche The Tasmanian vegetable grower CRITERIA TASMANIA AUSTRALIA Total area farmed 159 ha 205 ha Area of vegetables 32ha 30ha Area of vegetable (ha) by farm size: - Smallest 25% of farms 8ha 3ha - Median 50% of farms 16 ha 9ha - Larger < 75% of farms 44 ha 27 ha - Size Top 25% of farms >44 ha >27 ha Av. area of irrigated potatoes 14 ha 7ha Av. cash costs/t of potatoes <$240/t $263/t Av. debt Interest as % of cash receipts 4% 5% Av. equity in farm 83% 85% Av. age of owner/operator 54 53 SOURCE: ABARE Vegetable Industry Survey -- 2008/09 THE WAY AHEAD • re-establish discussion groups with an emphasis on gathering data on grower costs of production; • explore lower input costs, e.g. collective buying arrangements of fertiliser, fuel, etc; • energy audits at individual enterprise level; • communicate with farmers on their role in market development and branding; • understand and consider ways to address the effect of farm size on costs and returns; • growers, aggregators and processors co- operate to establish a commodity profile; • assess changes to the Brand Tasmania logo and slogan. TFGA vegetable industry facilitator Andrew Heap reviews the implementation of the Tasmanian Vegetable Industry Strategic Plan 2007-12 Where Tasmanian farms are smaller they are not able to take advantage of the relatively long four and five-crop production rotations needed to achieve yield targets and diversify into new production enterprises. Continued Page 10 THERE is no silver bullet that will deliver long-term prosperity at the individual or collective farm level for Tasmanian vegetable growers. The only practical plan is for all industry sectors to work together to form strong relationships focused on meeting consumer demand. Tasmania has an abundance of natural advantages. With the likely increase in global demand for clean, safe food produced with the maximum possible energy-efficiency, the Tasman- ian grower has advantages but also challenges. The advantages include long-term stable land ownership and environ- mental stewardship, an established processing infrastructure, established agricultural services, a savvy, skilled workforce and a largely disease-free, even climate production environment. Our challenges include rapidly changing consumer trends requiring flexible marketing, the globalisation of trade and traders and climate fluctu- ations. Among other influences, we can expect an improving US economy to ease the value of the $A through 2011. The crash in US demand for fries in 2008 has stabilised while Asian demand for fries has returned to the recent growth rate of about 4 per cent a year. Against New Zealand, the $A ap- preciation over the past 15 months has indirectly forced a cut in the price Australian potato growers receive by about $50 per tonne. The relative dependence of Tasman- ian vegetables on the mainland market and NZ's proximity suggest that import price competition via the processing sector is more severe than for other traditional Australian broadacre agri- cultural exports. NZ and China dominate Australia's imports of frozen and fresh vegetables. In the absence of a major product supply shortages in competing coun- tries, especially NZ, ways will have to be found to reduce or spread operating costs on the farm and further down the supply chain to maintain competitiven- ess.At the farm level, it is not so much a question of whether Tasmanian far- mers are less efficient that their NZ counterparts or that the farms are less productive. Rather, it seems more likely to be due to difference in relative farm size. Where Tasmanian farms are smaller they are not able to take advantage of the relatively long four and five-crop production rotations needed to achieve yield targets and diversify into new production enterprises. In Australia, vegetable farm labour is the highest individual farm cost. In NZ, farm labour rates are lower and processing labour is at least 25 per cent cheaper than in Australia. Potato processing underpins Tas- manian vegetables production, provid- ing the financial breathing space for farm expansion. It is doubtful that new alternative value-adding could contribute more than vegetable processing in a regional context in the medium term. Some further support for Tasmanian product could be expected from main- land wholesalers seeking to insulate themselves against supply variability due to climate change and from main- land growers looking to expand their production windows. Leveraging increased volumes of vegetables into the export market, expanding on current exports of car- rots and onions, could be expected to follow on from the development of mainland markets. Complementary to the vegetable in- dustry are a range of expanding farming diversification crop options, such as poppies, pyrethrum and indus- trial hemp. These crops are increasing- ly important in the vegetable crop rotation, helping to support growth and to further industry value-adding and profit. There will always be a competitive battle for a fair share of the supply- chain dollar at the farm gate. However, it is how much the product costs the processor or wholesaler at the point it leaves the plant that determines wheth- er it will find a profitable market. Maximising cost efficiencies, starting with a farm structure that enables cost competitiven- ess, should be seen as an inte- grated, whole-of-chain effort. With the cost of the vegetable input (potatoes) making up 60-65 per cent of processed cost of goods sold, it is understandable that processors will tend to look at what can be saved in this input supply cost as a high priority. The 2008-09 ABARE Vegetable Industry Survey data show that almost half Australian vegetable growers are producing on an area of 9ha or less. In Tasmania the average is 16ha, 14ha of which is used for potato production or about 1000 tonnes of primary crop, with the balance used for other crops. The data (see graphic) shows that growers who are producing vegetables with a prime-crop area of less than 10ha are likely to be heavily reliant on off-farm income. The significance of as much as 20ha of prime vegetable crop production is that average farm cash costs are close to or above a potato price of less than $300 a tonne. Further income depends on the farm area or water availability being suf- ficient to diversify into other crops. For growers in this category, lowering costs is likely to be about what can be done to produce a niche higher-value crop or find ways to expand the farm area. Where the production area of the prime crop is above 20ha, supported by a range of diversification options, farm cash costs are below current potato prices, depending on debt interest that may be associated with recent land or irrigation purchase. Larger growers will look for ways to increase use of their infrastructure, which opens up collective supply op- tions for smaller growers. News TASMANIAN VEGETABLE INDUSTRY STRATEGIC PLAN 2007-12 2014684-110408 SOIL HEALTH WEEK A number of events will be held in northern Tasmania next week to promote soil health and farm sustainability. NRM North, in conjunction with Serve-Ag, Tas Agronomy Plus and Southern Farming Systems, is sponsoring seven soil health events on topics including on-farm composting, managing soil biology in cropping soils and biodynamics. The week has attracted some key note speakers from around the country and overseas. The program of events: Rhonda Daly - Monday 11th Deloraine, Tuesday 12th Pipers Brook, Wednesday 13th Campbell Town, Thursday 14th Whitemark. RSVP Peter Heading 0408006315. Richard Thornton Smith -- Wednesday 13th Launceston. RSVP Ute Mueller 64454286. Joel Williams -- Thursday 14th Scottsdale, Friday 15th Longford. RSVP Seona Findlay 0428922106. The cost of attending the biodynamic lectures is $50. All the other events are free. For more information contact NRM North on 63337777 or email email@example.com.
March 31st 2011
April 14th 2011