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Vegetable industry

​​​​​​​​​​​​​​​The Australian vegetable–growing sector is an important source of food. It supplies most of the fresh vegetables consumed in Australia and provides inputs for the processed vegetable products consumed in Australia or exported.

Vegetables are an important part of healthy eating and provide a source of many nutrients and fibre. In 2014–15 the Australian Institute of Health and Welfare (AIHW 2018) estimated only 7 per cent of adults and 5 per cent of children ate sufficient serves of vegetables. The proportion of people with adequate vegetable consumption has decreased since 2004–05, despite the known benefits of vegetables.

Around 4 per cent of all Australian farms grew vegetables for human consumption in 2016–17 (ABS 2018a). Vegetable growing is the fourth–highest value agricultural industry in Australia, accounting for around 6 per cent of the gross value of agricultural production ($3.9 billion) in 2016–17. Vegetable exports contributed about 1 per cent ($354 million) of agricultural export income in 2016–17.

The results below are for farms included in the Australian vegetable-growing industry survey conducted annually by ABARES since 2007.

Physical characteristics

  • From 2006–07 to 2016–17 the total number of Australian vegetable-growing farms fell by 31 per cent. Most of this decline was largely a result of a decline in the number of small vegetable-growing farms planting less than 20 hectares.
  • In 2016–17 the number of small vegetable-growing farms increased in New South Wales, Queensland and Tasmania leading to an increase in the total number of farms.

Detailed physical characteristics

Aruni Weragoda, James Frilay and Dale Ashton

In 2016–17 an estimated 2,600 Australian farms were classified as vegetable-growing farm businesses. Around 25 per cent of these farms were in New South Wales, 24 per cent in Queensland, 19 per cent in Victoria, 11 per cent in South Australia, 11 per cent in Tasmania and 10 per cent in Western Australia. The total number of farms growing vegetables tends to vary from year to year, partly because opportunistic growers—mostly small farms—participate when prices and/or seasonal conditions are suitable.

From 2006–07 to 2016–17 the total number of Australian vegetable-growing farms fell by 31 per cent. Most of this decline was in Queensland, Victoria and South Australia (Figure 1). The change in the number of vegetable-growing farms was largely a result of a decline in the number of small vegetable-growing farms planting less than 20 hectares. In 2016–17 the number of small vegetable-growing farms increased in New South Wales, Queensland and Tasmania leading to an increase in the total number of farms.

Figure 1 Number of vegetable-growing farms, by state, 2006–07 to 2016–17
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

In 2016–17 around 66 per cent of farms planted less than 20 hectares of vegetables. These farms accounted for only 10 per cent of total vegetable production. An estimated 13 per cent of farms planted more than 70 hectares of vegetables and accounted for 65 per cent of total vegetable production in 2016–17 (Table 1).

Table 1 Proportion of farms and production, vegetable-growing farms, by size, 2016–17
Selected physical characteristicsUnitsLess than 5 hectares5–20 hectares20–70 hectaresMore than 70 hectaresAustralia
Area planted to vegetables aha2103520838
Proportion of farms%34322113100
Proportion of production%282565100

a Average per farm.
Source: ABARES Australian vegetable-growing farms survey

Gross value of production

The gross value of vegetable production increased by 9 per cent in 2016–17 to $3.9 billion (Figure 2). This increase made vegetable growing the fourth-highest value agricultural industry in Australia (Figure 3), accounting for around 6 per cent of the gross value of agricultural production in 2016–17. Vegetable exports contributed about 1 per cent ($354 million) of Australia’s agricultural export income in 2016–17 (ABARES 2018).

Figure 2 Gross value of Australian vegetable production, 1989–90 to 2016–17
Source: ABS (2018); ABARES (2017)
Figure 3 Top 10 Australian agricultural industries, by gross value of production, 2016–17
Source: ABS (2018)

The gross value of vegetable production increased from 1989–90 to 2007–08 before fluctuating around an average of $3.8 billion (in 2017–18 dollars) in the nine years to 2016–17. Structural adjustment was a key factor contributing to the increased gross value of vegetable production in the 1990s and 2000s. Increases in average farm size and ongoing capital investment in new technologies during these decades contributed to increased output.

Australian vegetable-growers produce a range of vegetable crops. More than 35 individual commodities contributed to total industry production. Potatoes had the highest gross value of production, contributing $552 million (Figure 4) or 18 per cent of the total value of vegetables, followed by tomatoes ($452 million), mushrooms ($331 million), onions ($256 million) and lettuce ($234 million). The next largest crops by value of production were carrots, melons, beans and broccoli. Tomatoes, beans, lettuce, onions, carrots and potatoes were the main contributors to the increase in gross value of production of vegetables in 2016–17. While the ‘other vegetable’ category appears large it consists of a large number of relatively small vegetable crops.

Figure 4 Gross value of Australian vegetable production, by commodity, 2016–17
Source: ABS (2018)

Crop area

From 2006–07 to 2016–17 the average area planted to vegetables per farm increased by around 12 per cent (Figure 5). This was largely a result of increases in average farm size because there were fewer small farms. In 2016–17 there was an increase in the number of opportunistic vegetable-growing farms with relatively small areas of vegetable crops. This resulted in a small decline in the average area planted to vegetables.

The intensity of vegetable production (area planted to vegetables as a proportion of total area planted to crops) also increased from 2006–07. This was largely a result of increased plantings of a range of more intensive vegetable crops such as Asian greens and other specialty vegetables (Figure 6).

Figure 5 Area planted to vegetables and intensity of vegetable production, vegetable-growing farms, Australia, 2006–07 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey
Figure 6 Area planted to vegetables, vegetable-growing farms, Australia, 2006–07 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

Despite increases in the average area planted to vegetables per farm over time, the survey results show the total area planted to vegetables on individual farms tends to vary little from year to year. To measure this variation, the average ratio of area planted to vegetables each year to the mean for all years was estimated for each farm surveyed from 2006–07 to 2016–17 (Figure 7). Annual variation ranged from 6 per cent below the mean to 6 per cent above the mean. From 2006–07 to 2009–10 the ratio of area planted to vegetables varied little relative to the mean. In 2010–11, 2011–12 and 2015–16 the variation was more than 3 per cent below the mean and in 2013–14 it was around 6 per cent above the mean. In 2016–17 the variation was around 0.2 per cent above the mean.

Figure 7 Variation in area planted to vegetables, vegetable-growing farms, Australia, 2006–07 to 2017–18
p Preliminary estimate y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

The variation in area planted was much greater for some individual vegetable crops than others. For example, potatoes and tomatoes had the least variation and onions, carrots, green beans and broccoli had the greatest variation (Figure 8).

Figure 8 Variation in area planted, by crop, vegetable-growing farms, Australia, 2006–07 to 2017–18
p Preliminary estimate y Provisional estimate.
Note: Figure shows the ratio of area planted to the mean for 2006–07 to 2016–17​.
Source: ABARES Australian vegetable-growing farms survey

Crop yields

Average crop yields for most vegetables increased in 2016–17, but yields varied across individual vegetables (Figure 9). In 2017–18 average yields are estimated to have increased for the main vegetable crops with the exception of tomatoes.

Figure 9 Yields of selected vegetables, vegetable-growing farms, Australia, 2006–07 to 2017–18
average per farm
y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

Trends in physical characteristics, by state

In 2016–17 New South Wales and Queensland had the largest shares of farms (Table 2), and Queensland accounted for the largest proportion of the total gross value of production (ABS 2018b).

Table 2 Selected farm physical characteristics, vegetable-growing farms, by state, 2016–17
average per farm
Selected physical characteristicsUnitsNSWVic.QldSAWATas.Australia
Share of farms%251924111011100
Share of vegetable production%11352210913100
Area planted to vegetablesha19625325343038
Total area of cropsha34998367488068
Total area operatedha81232296217136200195

Source: ABARES Australian vegetable-growing farms survey

​The proportion of total area planted to vegetables on individual farms fluctuates from year to year. From 2006–07 to 2016–17 the proportion of total cropping area planted to vegetables trended upwards in all states except Western Australia and Tasmania (Figure 10).

Figure 10 proportion of area planted to vegetables, vegetable-growing farms, by state, 2006–07 to 2016–17
average per farm
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

New South Wales

In 2016–17 New South Wales had an estimated 647 vegetable-growing farms, accounting for 25 per cent of Australian vegetable-growing farms. Most farms were in Greater Sydney, the Murrumbidgee Irrigation Area and the Far North Coast. The average area of NSW vegetable-growing farms was around 81 hectares, with 19 hectares planted to vegetables. Vegetable production accounted for 3 per cent of the gross value of agricultural production in New South Wales (ABS 2018b).

Victoria

In 2016–17 Victoria had an estimated 482 vegetable-growing farms, accounting for 19 per cent of Australian vegetable-growing farms. Most farms were located around Melbourne, the Gippsland region and the irrigated regions along the Murray River. The average area of Victorian vegetable-growing farms was around 232 hectares, with 62 hectares planted to vegetables. Vegetable production accounted for 7 per cent of the gross value of agricultural production in Victoria (ABS 2018b).

Queensland

In 2016–17 Queensland had an estimated 618 vegetable-growing farms, accounting for 24 per cent of Australian vegetable-growing farms. Most farms were in the Darling Downs, around Bundaberg, Bowen and in the Burdekin delta. The average area of Queensland vegetable-growing farms was around 296 hectares, with 53 hectares planted to vegetables. Vegetable production accounted for 9 per cent of the gross value of agricultural production in Queensland (ABS 2018b).

South Australia

In 2016–17 South Australia had an estimated 277 vegetable-growing farms, accounting for 11 per cent of Australian vegetable-growing farms. Most farms were in the Mallee, the Riverland and the Adelaide Plains. The average area of South Australian vegetable-growing farms was around 217 hectares, with 25 hectares planted to vegetables. Vegetable production accounted for 8 per cent of the gross value of agricultural production in South Australia (ABS 2018b).

Western Australia

In 2016–17 Western Australia had an estimated 260 vegetable-growing farms, accounting for 10 per cent of Australian vegetable-growing farms. Most farms were located along the coast near Perth and around Carnarvon along the Gascoyne River. The average area of Western Australian vegetable-growing farms was around 136 hectares, with 34 hectares planted to vegetables. Vegetable production accounted for 4 per cent of the gross value of agricultural production in Western Australia (ABS 2018b).

Tasmania

In 2016–17 Tasmania had an estimated 279 vegetable-growing farms, accounting for around 11 per cent of Australian vegetable-growing farms. Most farms were located in the north of the state, along the coastal fringe and the northern midlands. The average area of Tasmanian vegetable-growing farms was around 200 hectares, with 30 hectares planted to vegetables. Vegetable production accounted for 18 per cent of the gross value of agricultural production in Tasmania (ABS 2018b).

Vegetable-growing environment

In 2016–17 an estimated 86 per cent of Australian vegetable-growing farms had exclusively outdoor vegetable operations (Table 3). Some farms used hydroponics (6 per cent) or under-cover systems such as glass or shade cloth (13 per cent). Under-cover systems often generate higher yields for a range of vegetable crops, giving farmers more control over output quality and ensuring a more reliable supply. However, farms using these systems require higher receipts to cover the increased input costs.

Table 3 Vegetable growing environment, Australian vegetable-growing farms, 2016–17
proportion of farms
Growing environmentUnitsLess than 5 hectares5–20 hectares20–70 hectaresMore than 70 hectaresAustralia
Outdoors only%7388979886
Hydroponics%125006
Under cover%24123213

Note: Percentages will not equal 100 because farms can be in multiple categories.
Source: ABARES Australian vegetable-growing farms survey

Recent changes in vegetable prices and production

Changes in the quantity of vegetables produced and prices received have a strong influence on changes in farm cash incomes in the vegetable-growing industry each year.

Australian vegetable-growing farms mostly produce for the domestic market (Table 4). As a result, changes in vegetable prices tend to vary inversely with domestic production, with little direct influence from developments in export markets.

Table 4 Markets for vegetables, Australian vegetable-growing farms, 2016–17
proportion of receipts
Markets2016–17p
For export1(39)
Wholesale markets in the state38(5)
Wholesale markets in other states8(25)
Local market11(17)
Direct to processor22(3)
Direct to retail5(11)
Direct to public6(30)
Direct to food services7(25)
Other markets2(75)

p Preliminary estimate.
Note: Figures in parentheses are standard errors expressed as a percentage of the estimate
Source: ABARES Australian vegetable-growing farms survey

A weighted index of farmgate prices received for the main vegetables produced by Australian vegetable-growing farm businesses increased by 2 per cent in 2016–17 (Figure 11). Vegetable-growing farmers received higher average prices for tomatoes, onions, carrots, cauliflower and lettuces but slightly lower prices for potatoes, pumpkins, green peas, green beans, capsicum, broccoli and cucumber. The weighted index of farmgate prices received for the main vegetables is estimated to have declined by 9 per cent in 2017–18. Average farmgate prices for most individual vegetables are estimated to have fallen in 2017–18.

Figure 11 Farmgate price index, vegetable commodities, Australian vegetable-growing farms, 2006–07 to 2017–18
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

Seasonal conditions

Seasonal conditions have considerable influence on the financial performance of vegetable-growing farms and typically vary across the main vegetable-producing regions in any year.

In 2016–17 most vegetable growers in each state reported average seasonal conditions (Figure 12) Around 39 per cent of vegetable growers in Queensland and 37 per cent of vegetable growers in New South Wales reported below average or drought seasonal conditions.

Further deterioration of seasonal conditions in 2017–18, particularly in New South Wales and Queensland will have impacted vegetable production. However, because most vegetable crops utilise irrigation the availability of water is important. As a consequence, the impact of drought is most likely to be observed in the 2018–19 farm survey results.

Figure 12 Seasonal conditions, Australian vegetable-growing farms, by region, 2016–17
Note: Farmers were asked to report prevailing seasonal conditions during the financial year to indicate the combined effects of rainfall, temperature and evapotranspiration.
Source: ABARES Australian vegetable-growing farms survey

Farm financial performance

  • In 2016–17 average farm cash income of Australian vegetable-growing farms increased to around $283,600 per farm as total cash costs fell by more than receipts. Average farm cash income of vegetable-growing farms rose in in New South Wales, Victoria and Queensland.
  • In 2017–18 average farm cash income of Australian vegetable-growing farms is estimated to have been the highest in real terms since ABARES began surveying vegetable-growing farms in 2007. Average farm cash income is estimated to have increased in all states except Queensland and Western Australia.

Detailed farm financial performance

Aruni Weragoda, James Frilay and Dale Ashton

Farm cash income and profit

In 2016–17 average farm cash income of Australian vegetable-growing farms increased by an estimated 13 per cent to $283,600 per farm (Table 5). This was a result of a larger decline in total cash costs than the decline in receipts.

In 2017–18 average farm cash income is estimated to have increased further by 12 per cent to average $319,000 per farm. In real terms, estimated average farm cash incomes for 2016–17 and 2017–18 will be the highest since ABARES began surveying vegetable-growing farms in 2007 (Figure 13).

Figure 13 Total cash receipts, total cash costs and farm cash income, vegetable-growing farms, Australia, 2006–07 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey
Table 5 Financial performance, vegetable-growing farms, Australia, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable receipts$1,157,7101,078,4001,132,000
Total cash receipts$1,320,3201,255,0001,331,000
% cash receipts from vegetables%888685
Total cash costs$1,068,190971,3001,012,000
Farm cash income$252,130283,600319,000
Farm business profit$112,310156,300189,000
Rate of return
– excluding capital appreciation%3.64.95.9
– including capital appreciation%4.88.1na

p Preliminary estimate. y Provisional estimate. na Not available.
Source: ABARES Australian vegetable-growing farms survey

Farm business profit of vegetable-growing farms is projected to have been average $189,000 per farm in 2017–18, 21 per cent higher than in 2016–17 (Table 5). Farm business profit is a measure of long-term profitability. It accounts for capital depreciation, payments for family labour and changes in inventories of vegetables, livestock, fodder and grain held on a farm. In most years, changes in farm business profit reflect proportional changes in farm cash income.

Many farms occasionally record negative farm business profits as their incomes fluctuate. Negative farm business profit means a farm has not covered the costs of unpaid family labour or set aside funds to replace depreciating farm assets. However, ongoing low or negative profits affect long-term viability because farms have reduced capacity to invest in newer and more efficient technologies. From 2006–07 to 2016–17 the proportion of vegetable-growing farms recording negative farm business profit averaged 59 per cent a year. The proportion of farms recording negative farm business profit is estimated to have been 50 per cent in 2017–18 (Figure 14).

Figure 14 Proportion of vegetable-growing farms with negative farm business profit, Australia, 2006–07 to 2017–18
percentage of farms
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

Total cash receipts

In 2016–17 total cash receipts for Australian vegetable-growing farms decreased by 5 per cent to average $1,255,000 per farm (Table 5). Total vegetable receipts declined by 7 per cent in 2016–17. This was due to lower average vegetable production per farm because of an increase in the number of opportunistic growers with small areas of vegetable crops.

On average, over the 5 years from 2012–13 to 2016–17 potato receipts were the largest component of vegetable receipts, contributing around 17 per cent, followed by receipts from tomatoes, carrots, lettuce and broccoli (Figure 15). In 2016–17 receipts from the sale of vegetables accounted for an estimated 86 per cent of average farm cash receipts. Reduced sales of broccoli, lettuce, potatoes, onions, cabbage and green beans contributed to most of the decrease in total vegetable receipts.

Total cash receipts are estimated to have increased in 2017–18 by around 6 per cent, mainly driven by higher receipts for potatoes, broccoli, carrots, green peas and pumpkins as a result of increased production per farm and higher prices for pumpkins and green peas.

Figure 15 Major components of vegetable receipts, vegetable-growing farms, Australia, 2012–13 to 2016–17
average proportion per farm
Source: ABARES Australian vegetable-growing farms survey

Total cash costs

The main components of cash costs were hired labour, packing materials and charges, contracts paid, seed and fertiliser (Figure 16). In 2016–17 average cash costs fell by 9 per cent to $971,300 per farm (Table 5), reflecting the decline in average area planted to vegetables and expenditure on hired labour, contracts paid, packing materials and charges, seed, freight and fertiliser. Average total cash costs in 2017–18 are projected to have risen by around 4 per cent to $1,012,000 per farm, with small increases in all cost categories.

Figure 16 Major components of cash costs, vegetable-growing farms, Australia, 2016–17 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

Rate of return

The average rate of return (excluding capital appreciation) of Australian vegetable-growing farms increased from 3.6 per cent in 2015–16 to 4.9 per cent in 2016–17, reflecting higher farm cash incomes (Figure 17). The average rate of return is estimated to have increased further in 2017–18 to around 5.9 per cent.

Figure 17 Rate of return, vegetable-growing farms, Australia, 2006–07 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Note: Rate of return excluding capital appreciation.
Source: ABARES Australian vegetable-growing farms survey

In 2016–17 the performance of vegetable-growing farms varied widely (Figure 18). Around 37 per cent of vegetable-growing farms recorded a rate of return (excluding capital appreciation) of less than 0, and around 24 per cent had a rate of return of between 0 and 5 per cent. An estimated 39 per cent of vegetable-growing farms had a rate of return (excluding capital appreciation) in excess of 5 per cent.

Figure 18 Distribution of vegetable-growing farms, by rate of return, 2016–17
Source: ABARES Australian vegetable-growing farms survey

Top performing vegetable-growing farms that had returns of 10 per cent or more (around 24 per cent of farms) were mostly large farms (by average area planted to vegetables) with high levels of capital investment and intense vegetable-producing operations. Top performing vegetable-growing farms also generated substantially larger farm cash incomes than vegetable-growing farms in general.

In 2016–17 average rates of return (excluding capital appreciation) were positive across all states. Western Australia had the highest estimated average rate of return (excluding capital appreciation) at 7.5 per cent, followed by South Australia at 6.3 per cent.

Between 2006–07 and 2016–17 vegetable-growing farms in Queensland and South Australia recorded the greatest overall variation in rates of return (Figure 19).

Figure 19 Rate of return variability, vegetable-growing farms, by state, 2006–07 to 2016–17
Note: Boxes represent 50 per cent of years. Vertical lines represent the 25 per cent best and worst years. Horizontal line in each box is the median.
Source: ABARES Australian vegetable-growing farms survey

Performance, by state

In 2016–17 average farm cash income of vegetable-growing farms rose in New South Wales, Victoria and Queensland. In 2017–18 average farm cash income of vegetable-growing farms is estimated to have increased in all states except Queensland and Western Australia.

New South Wales

In 2016–17 average farm cash income for NSW vegetable-growing farms increased by an estimated 74 per cent to around $171,700 per farm (Table 6). Total vegetable production per farm declined marginally, mainly as a result of a decline in average area planted to vegetables. However, higher vegetable prices led to an increase in total vegetable receipts. Average total cash costs decreased by 4 per cent to around $350,200 per farm. Freight, hired labour, and fuel, oil and grease costs largely contributed to the decline in total cash costs in 2016–17.

Average farm cash income is estimated to have increased by a further 3 per cent in 2017–18 to $177,000 per farm because of an estimated increase in vegetable production and despite lower expected prices. Vegetable production is projected to have risen because of higher yields for most vegetables.

Table 6 Financial performance, vegetable-growing farms, New South Wales, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable receipts$407,520478,200499,000
Total cash receipts$464,830521,900539,000
% cash receipts from vegetables%889293
Total cash costs$366,010350,200362,000
Farm cash income$98,810171,700177,000
Farm business profit$7,59079,50083,000
Rate of return
– excluding capital appreciation%0.63.63.8
– including capital appreciation%2.47.0na

p Preliminary estimate. y Provisional estimate. na Not available.
Source: ABARES Australian vegetable-growing farms survey

Victoria

In 2016–17 average farm cash income for Victorian vegetable-growing farms fell by an estimated 23 per cent to average $460,100 per farm (Table 7). Total vegetable production per farm increased as a result of higher yields for most vegetables. Increased vegetable production led to an increase in average total vegetable receipts despite lower vegetable prices. Higher receipts from carrots, tomatoes, cauliflower and brussels sprouts mainly contributed to the increase in total vegetable receipts. In 2016–17 more vegetable-growing farms engaged in intense vegetable-producing operations compared to 2015–16. Average total cash costs increased by 6 per cent to $1,893,700 per farm. In 2016–17 the cost of packing materials and charges, fuel, oil and grease, freight, and crop and pasture chemicals largely contributed to increased cash costs.

Average farm cash income is estimated to have increased in 2017–18 by around 53 per cent to $703,000 per farm. Vegetable receipts are estimated to have increased mainly as a result of higher vegetable production per farm due to estimated increases in average area planted to vegetables. Average total cash costs are also estimated to have increased by around 4 per cent.

Table 7 Financial performance, vegetable-growing farms, Victoria, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable receipts$1,946,2802,156,5002,334,000
Total cash receipts$2,153,8802,353,8002,663,000
% cash receipts from vegetables%909288
Total cash costs$1,779,7901,893,7001,961,000
Farm cash income$374,090460,100703,000
Farm business profit$196,920299,800539,000
Rate of return
– excluding capital appreciation%4.34.88.0
– including capital appreciation%5.810.0na

p Preliminary estimate. y Provisional estimate. na Not available.
Source: ABARES Australian vegetable-growing farms survey

Queensland

In 2016–17 average farm cash income for Queensland vegetable-growing farms increased by around 33 per cent to average $274,400 per farm (Table 8). Total vegetable production per farm declined as a result of a decline in the average area planted to vegetables and lower yields. Lower receipts from lettuce, green beans, cauliflower and cabbage largely contributed to the increase in vegetable receipts. Average total cash costs decreased by 8 per cent to around $1,092,600 per farm, offsetting the decline in total cash receipts. Expenditure on hired labour, packing materials and charges, freight, seeds, and crop and pasture chemicals largely contributed to the decline in total cash costs in 2016–17.

Average farm cash income is estimated to have declined in 2017–18 to around $188,000 per farm. Vegetable receipts are estimated to have fallen by around 3 per cent, mainly as a result of a decline in onions, green beans, tomatoes and capsicum receipts. The average area planted and quantities produced for most vegetables are estimated to have declined. Average total cash costs are estimated to have increased by around 6 per cent.

Table 8 Financial performance, vegetable-growing farms, Queensland, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable receipts$1,230,8701,185,0001,146,000
Total cash receipts$1,391,5401,367,0001,348,000
% cash receipts from vegetables%888785
Total cash costs$1,184,4001,092,6001,160,000
Farm cash income$207,150274,400188,000
Farm business profit$49,350135,30046,000
Rate of return
– excluding capital appreciation%2.65.63.0
– including capital appreciation%3.87.0na

p Preliminary estimate. y Provisional estimate. na Not available.
Source: ABARES Australian vegetable-growing farms survey

South Australia

In 2016–17 average farm cash income for South Australian vegetable-growing farms declined by an estimated 12 per cent to around $277,900 per farm (Table 9). Total vegetable production per farm fell as a result of a decrease in the average area planted to vegetables. Reduced vegetable production and lower vegetable prices led to a decline in average total vegetable receipts. The fall in total vegetable receipts was largely a result of reduced receipts from potatoes, tomatoes, cucumbers, and onions. Average total cash costs decreased by 18 per cent to around $763,100 per farm, partially offsetting the effect of reduced receipts. Decreases in total cash costs in 2016–17 were largely driven by the cost of contracts paid, hired labour, fuel, oil and grease, seed, and freight costs.

Average farm cash income is estimated to have increased in 2017–18 by around 23 per cent to $342,000 per farm. Vegetable production is projected to have risen because of increases in the area planted to vegetables and higher yields for most vegetables. Average total cash costs are also estimated to have increased by around 3 per cent as a result of increases in all cost categories reflecting the estimated increases in area planted.

Table 9 Financial performance, vegetable-growing farms, South Australia, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable receipts$1,142,340771,100928,000
Total cash receipts$1,243,8401,041,1001,128,000
% cash receipts from vegetables%927482
Total cash costs$926,770763,100786,000
Farm cash income$317,070277,900342,000
Farm business profit$199,730158,200220,000
Rate of return
– excluding capital appreciation%8.96.38.2
– including capital appreciation%9.79.1na

p Preliminary estimate. y Provisional estimate. na Not available.
Source: ABARES Australian vegetable-growing farms survey

Western Australia

In 2016–17 average farm cash income for Western Australian vegetable-growing farms increased by 1 per cent to around $398,300 (Table 10). Total vegetable receipts decreased by 13 per cent as a result of lower vegetable prices. Higher vegetable yields led to an increase in total vegetable production per farm despite a fall in the average area planted to vegetables. The fall in total vegetable receipts was largely a result of declines in receipts for broccoli, cabbage, cauliflower and lettuce. Total cash costs decreased by around 12 per cent, mainly driven by decreases in packing materials and charges, contracts paid, hired labour, and fertiliser costs.

Average farm cash income is estimated to have decreased in 2017–18 by 28 per cent to $285,000 per farm. Total vegetable receipts are expected to have declined by around 7 per cent because of the projected fall in total vegetable production and prices. Reduced receipts mainly from lettuce, potatoes, tomatoes and onions are estimated to have contributed to the decline in vegetable receipts. Total cash costs are estimated to have increased by around 4 per cent.

Table 10 Financial performance, vegetable-growing farms, Western Australia, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable receipts$1,550,2001,355,9001,291,000
Total cash receipts$1,734,3701,574,8001,508,000
% cash receipts from vegetables%898686
Total cash costs$1,338,9501,176,6001,223,000
Farm cash income$395,410398,300285,000
Farm business profit$233,040252,700137,000
Rate of return
– excluding capital appreciation%4.47.54.7
– including capital appreciation%3.97.9na

p Preliminary estimate. y Provisional estimate. na Not available.
Source: ABARES Australian vegetable-growing farms survey

Tasmania

In 2016–17 average farm cash income for Tasmanian vegetable-growing farms declined by 4 per cent to $162,500 per farm (Table 11). Total vegetable receipts decreased by 8 per cent, largely as a result of lower vegetable prices. Onions, cauliflower, carrots and cabbage receipts contributed mainly to the decrease in vegetable receipts. Total cash costs decreased by 10 per cent, mainly because of reduced expenditure on hired labour, freight, electricity and repairs and maintenance.

Average farm cash income is estimated to have increased in 2017–18 by around 73 per cent. Total vegetable receipts are estimated to have risen by around 28 per cent, primarily because of increases in potato receipts. Increases in the expenditure on fertiliser, hired labour and contracts contributed to estimated increases in average total cash costs in 2017–18.

Table 11 Financial performance, vegetable-growing farms, Tasmania, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable receipts$468,540430,600551,000
Total cash receipts$805,130737,100871,000
% cash receipts from vegetables%585863
Total cash costs$635,190574,500589,000
Farm cash income$169,940162,500282,000
Farm business profit$47,20045,500162,000
Rate of return
– excluding capital appreciation%2.32.85.9
– including capital appreciation%4.85.1na

p Preliminary estimate. y Provisional estimate. na Not available.
Source: ABARES Australian vegetable-growing farms survey

Farms growing vegetables under the National Vegetable Levy

The National Vegetable Levy (NVL) is payable on specific vegetables grown in Australia by producers who either sell the product or use it in the production of other goods. Vegetables subject to the NVL are shown in Table 12. The levy is used to fund Horticulture Innovation Australia—a grower-owned research and development company that invests in horticultural research, development and marketing. The following analysis covers only growers who produced vegetables subject to the NVL.

Table 12 National Vegetable Levy—inclusions and exemptions
Included under NVLExempt from NVL a
CarrotsPotatoes
PumpkinsOnions
Sweet cornTomatoes
Peas and beansAsparagus
LettucesMushrooms
Broccoli
Cauliflower
Capsicums
Other vegetables

a Statutory R&D levies apply to mushrooms, onions and potatoes.
Note: The ABARES Australian vegetable-growing farms survey does not collect information on asparagus and mushrooms as individual vegetable commodities.
Source: AUSVEG 2012

Farms paying the NVL accounted for an estimated 73 per cent of vegetable-growing farms in 2016–17 (Table 13). Many of these farms also produced vegetables not covered by the levy.

Table 13 Australian vegetable-growing farms, by area planted to vegetables, 2016–17
Area planted to vegetablesAll vegetable-growing farm businesses (no.)Proportion of farms that pay NVL a
<5 hectares86183
5–20 hectares80867
20–70 hectares54961
>70 hectares33279
All farms255073

a Population excludes farms that only grow asparagus, mushrooms, onions, potatoes and tomatoes.
Source: Australian Bureau of Statistics, ABARES Australian vegetable-growing farms survey

In 2016–17 an estimated 84 per cent of NVL-paying vegetable-growing farms had exclusively outdoor vegetable operations. Some farms used hydroponics (6 per cent) or under-cover systems (15 per cent).

NVL-paying farms are on average smaller than the average for non-NVL-paying vegetable-growing farms. Around 68 per cent of NVL-paying farms planted less than 20 hectares of vegetables in 2016–17. The average area operated by NVL-paying farms was estimated to have been around 132 hectares, compared to 400 hectares for non-NVL-paying vegetable-growing farms. NVL-paying farms also tend to be more diversified than the average, producing various vegetable crops and running non-vegetable enterprises such as livestock. In comparison, non-NVL farms tend to be larger and specialise in one or two vegetable enterprises.

The average farm cash income of NVL-paying vegetable-growing farms decreased by 2 per cent in 2016–17 to an estimated $271,500 per farm (Table 14). This was a result of reduced total vegetable receipts from a decline in vegetable production per farm. Average farm cash income is projected to have increased by around 11 per cent in 2017–18 to average $300,000 per farm.

Table 14 Financial performance, National Vegetable Levy–paying farms, 2015–16 to 2017–18
average per farm
Financial estimatesUnits2015–162016–17p2017–18y
Vegetable cash receipts$1,332,5101,199,5001,242,000
Total cash receipts$1,485,8801,336,7001,436,000
% cash receipts from vegetables%909087
Total cash costs$1,209,8101,065,2001,136,000
Farm cash income$276,070271,500300,000
Farm business profit$138,700143,200168,000
Rate of return
– excluding capital appreciation%4.74.65.3
– including capital appreciation%5.98.1na

p Preliminary estimate. y Provisional estimate. na Not available.
Note: Population excludes farms that are specialist asparagus, mushroom, onion, potato and tomato growers.
Source: ABARES Australian vegetable-growing farms survey

Farm business profit of NVL-paying vegetable growing farms in 2016–17 increased by an estimated 3 per cent to $143,200 per farm (Table 14). Farm business profit is projected to have increased further to average $168,000 per farm in 2017–18.

On average, over the 5 years from 2012–13 to 2016–17 carrots receipts were the largest component of vegetable receipts, contributing around 12 per cent, followed by receipts from lettuce, broccoli, potatoes, green beans and onions (Figure 20).

Figure 20 Major components of vegetable receipts, NVL-paying vegetable-growing farms, Australia, 2012–13 to 2016–17
average proportion per farm
Source: ABARES Australian vegetable-growing farms survey

Total cash receipts for NVL-paying vegetable-growing farms are estimated to have decreased by 10 per cent in 2016–17 to average $1,336,700 per farm (Table 14). Total vegetable receipts declined by 10 per cent as a result of reduced vegetable production per farm. Cash receipts from the sale of vegetables accounted for 90 per cent of total cash receipts in 2016–17. Sales of carrots was the largest contributor (16 per cent) to total vegetable receipts, followed by lettuce (9 per cent) and broccoli (6 per cent). Declines in receipts from broccoli, lettuce, onions and green beans contributed most to the decline in total vegetable receipts in 2016–17. In 2017–18 total vegetable receipts are projected to have increased by 4 per cent.

The average quantity of vegetables produced per NVL-paying farm decreased by 9 per cent in 2016–17 to be 43 per cent higher than the 10-year average from 2006–07 to 2015–16. This was the result of a decline in average area planted despite higher crop yields for most vegetables. Estimated average farmgate prices increased for some vegetables, including carrots, cauliflower, cabbage, brussels sprouts, lettuce and Asian vegetables but declined for pumpkins, green peas, green beans, broccoli and capsicum. In 2016–17 the average area of vegetables planted per NVL-paying farm fell by 14 per cent to be around 24 per cent higher than the 10-year average from 2006–07 to 2015–16. Reduced broccoli, green peas and lettuce plantings were the main drivers of the fall in total vegetable plantings in 2016–17.

Average cash costs decreased by 12 per cent in 2016–17 to $1,065,200 per farm (Table 14). The largest components were hired labour, contracts paid, packing materials and charges, repairs and maintenance, and freight costs (Figure 21). Average total cash costs are projected to have increased by 7 per cent in 2017–18.

Figure 21 Major components of cash costs, NVL-paying vegetable-growing farms, Australia, 2016–17 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

On average, NVL-paying farms generated higher rates of return compared to non-NVL-paying vegetable-growing farms (Figure 22). In 2017–18 non-NVL-paying farms are projected to have recorded rates of return of 6.1 per cent and NVL-paying farms are projected to have recorded rates of return of 5.3 per cent.

Figure 22 Rate of return, vegetable-growing farms, Australia, 2006–07 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

Farm debt and equity

  • Average debt of Australian vegetable-growing farms decreased by 20 per cent to around $438,000 per farm in 2016–17, mainly because of reduced working capital debt.
  • With reductions in average farm debt the proportion of farm receipts needed to fund interest payments remains low at around 2 per cent.

Detailed farm debt and equity

James Frilay, Aruni Weragoda and Dale Ashton

Trends in average debt per farm

Debt is an important source of funds for investment and ongoing working capital for many vegetable-growing farms. At the national level, from 2006–07 to 2016–17 average total debt per farm increased by around 38 per cent in real terms (Figure 23). The overall increase in average debt has been accompanied by increases in average total cash receipts per farm. Changes in debt from year to year are mainly a result of changes in debt for working capital and land purchases. In 2016–17 total farm debt at 30 June decreased by around 20 per cent to an average of around $438,000 per farm, mainly because of reduced working capital debt.

Figure 23 Total farm debt at 30 June, vegetable-growing farms, Australia, 2006–07 to 2016–17
average per farm
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

In ABARES farm surveys, debt is recorded by its main purpose. However, because some loans cover a range of purposes, estimates of debt by main purpose provide a guide only.

Over the 3 years to 2016–17 working capital accounted for the largest proportion of total farm debt at 36 per cent on average (Figure 24). A further 35 per cent of debt was for land purchases and around 11 per cent was for purchases of vehicles and machinery. The remaining debt was for a range of purposes such as buildings and structures and land development.

Figure 24 Main purpose of farm debt, vegetable-growing farms, Australia, 2014–15 to 2016–17
average proportion per farm
Source: ABARES Australian vegetable-growing farms survey

Equity ratio

Increases in average total debt of vegetable-growing farms at 30 June have been largely matched by equivalent changes in farm equity. As a consequence, from 2006–07 to 2016–17 the average equity ratio of vegetable-growing farms was around 86 per cent.

In 2016–17 an estimated 62 per cent of vegetable-growing farms had an equity ratio above 90 per cent or more (Table 15), 24 per cent had an equity ratio of 70 per cent to 90 per cent and the remaining 14 per cent had an equity ratio of less than 70 per cent. The main difference between the three groups was that vegetable-growing farms with lower equity ratios tended to generate significantly higher receipts per hectare than farms with higher equity ratios.

Table 15 Farm performance, by equity ratio, vegetable-growing farms, Australia, 2016–17
average per farm
Equity ratioUnitMore than 90%70 to 90%Less than 70%
Proportion of farms%622414
Total area operatedha182136158
Total area sown to cropsha405497
Total area planted to vegetablesha203540
Area planted to vegetables as a proportion of total area planted to crops%506541
Vegetable receipts$480,500919,7001,256,500
Total cash receipts$573,3001,175,4001,461,100
Vegetable receipts as a proportion of total receipts%847886
Receipts per hectare operated$3,2008,6009,300

Source: ABARES Australian vegetable-growing farms survey

Debt-servicing capacity

The long-term viability of a farm is affected by its capacity to service debt by making interest payments and paying down the principal. The proportion of farm receipts spent on interest payments is a useful indicator of short-term capacity to service debt. From 2006–07 to 2012–13 the proportion of farm receipts needed to fund interest payments fluctuated, averaging around 5 per cent (Figure 25). From 2012–13 the ability of vegetable-growing farms to service their debts improved as a result of higher farm receipts and reduced interest rates. For 2017–18 it is estimated that the proportion of receipts needed to meet interest payments was just over 2 per cent.

Figure 25 Ratio of interest paid to total cash receipts, vegetable-growing farms, Australia, 2006–07 to 2017–18
average per farm
p Preliminary estimate. y Provisional estimate.
Source: ABARES Australian vegetable-growing farms survey

At the national level, around 42 per cent of vegetable-growing farms reduced their total debt from 1 July 2016 to 30 June 2017 (Figure 26). An estimated 29 per cent of vegetable-growing farms increased their debt and around 5 per cent had no change in debt. The remaining 24 per cent of farms held no debt at 1 July 2016 and 30 June 2017.

Figure 26 Distribution of farms, by change in debt, vegetable-growing farms, Australia, 2016–17
proportion of farms
Note: Change in debt from 1 July 2016 to 30 June 2017.
Source: ABARES Australian vegetable-growing farms survey

Distribution of farms, by debt and equity

From 2014–15 to 2016–17 an estimated 31 per cent of vegetable-growing farms held no debt at 30 June, with a further 22 per cent of vegetable-growing farms holding less than $100,000 in debt. Despite being similarly sized to farms holding less than $100,000 in debt, vegetable-growing farms holding no debt had higher levels of farm cash income and rates of return (Table 16).

On average, the 48 per cent of vegetable-growing farms holding debt less than $500,000 generated lower rates of return and had a higher proportion of farms with negative farm business profit than the 52 per cent of vegetable-growing farms holding either no debt or $500,000 or greater.

Table 16 Farm performance, by debt group, vegetable-growing farms, Australia, 2014–15 to 2016–17
three-year average per farm
Performance indicatorUnitNo debtLess than $100,000$100,000 to less than $250,000$250,000 to less than $500,000$500,000 to less than $1m$1m to less than $2mMore than $2m
Proportion of farms%31221411966
Total cropping areaha2824403769140251
Total area planted to vegetablesha151217203668154
Vegetable receipts$385,000226,000387,000520,0001,003,0001,398,0004,276,000
Total cash receipts$439,000294,000504,000654,0001,214,0001,892,0004,931,000
Farm cash income$172,000101,000109,000165,000286,000428,000917,000
Total capital$2,554,0002,284,0002,495,0003,169,0004,886,0006,584,00012,440,000
Total debt$041,000164,000366,000703,0001,390,0004,187,000
Proportion of farms with negative farm business profit%58656161423935
Rate of return a%3.40.00.82.14.04.57.5
Equity ratio%100989388857966

a Rate of return excluding capital appreciation.
Note: ‘Proportion of farms’ row may not sum to 100 due to rounding.
Source: ABARES Australian vegetable-growing farms survey

An estimated 62 per cent of vegetable-growing farms had equity ratios above 90 per cent in 2016–17, with a significant proportion of these farms having no debt (Table 17). An estimated 11 per cent of vegetable-growing farms held debt in excess of $1 million, however only 14 per cent of all vegetable-growing farms had an equity ratio below 70 per cent.

Table 17 Distribution of farms, by farm business debt and equity ratio, vegetable-growing farms, Australia, 30 June 2017
percentage
Equity ratioNo debtLess than $100,000$100,000 to less than $250,000$250,000 to less than $500,000$500,000 to less than $1m$1m to less than $2mMore than $2mTotal
More than 90%28238111062
80% to less than 90%006221113
70% to less than 80%005212111
60% to less than 70%00021025
Less than 60%00203129
Total2823227956100

Note: Row and column totals may not sum to 100 due to rounding.
Source: ABARES Australian vegetable-growing farms survey

Debt and equity, by state

Debt and equity ratios of vegetable-growing farms vary significantly by state. In 2016–17 vegetable-growing farms in New South Wales had lower average debt and higher farm equity ratios than other states (Figure 27 and Figure 28). This is primarily a result of the smaller operating size of New South Wales vegetable-growing farms.

Figure 27 Total farm debt at 30 June, vegetable-growing farms, by state, 2016–17
average per farm
Source: ABARES Australian vegetable-growing farms survey
Figure 28 Equity ratio, vegetable-growing farms, by state, 2016–17
average per farm
Source: ABARES Australian vegetable-growing farms survey

The distribution of debt among vegetable-growing farms in each state also varied significantly (Table 18). In New South Wales, around 40 per cent of vegetable-growing farms had no debt at 30 June 2017 and a further 29 per cent held less than $100,000 in debt. Only 4 per cent of farms in New South Wales had debt in excess of $1 million. The proportion of farms with more than $1 million of debt was highest in Western Australia where around 21 per cent of vegetable-growing farms held debts greater than $1 million at 30 June 2017. This was mainly as a result of large on-farm investments and intensive vegetable production.

Table 18 Distribution of farms, by farm business debt, vegetable-growing farms, by state, 30 June 2017
percent of farms
StateNo debtLess than $100,000$100,000 to less than $250,000$250,000 to less than $500,000$500,000 to less than $1m$1m to less than $2mMore than $2m
New South Wales4029214322
Victoria33261241168
Queensland211726121365
South Australia392797936
Western Australia140431391011
Tasmania84221010712

Note: Row and column totals may not sum to 100 due to rounding.
Source: ABARES Australian vegetable-growing farms survey

Farm capital and investment

  • The total value of capital for Australian vegetable-growing farms decreased by 15 per cent in real terms from 2006–07 to 2016–17 as a result of decline in the total number of vegetable-growing farms.
  • On average, 39 per cent of vegetable-growing farms each year made additions to their total capital from 2006–07 to 2016–17.

Detailed farm capital and investment

James Frilay, Aruni Weragoda, Dale Ashton

Total farm capital

Investment in farm capital is important for the ongoing development of the Australian vegetable-growing industry. New and more efficient technologies are important for farm productivity and investments in land, fixed improvements, and plant and equipment are key drivers of vegetable grower’s capacity to generate farm outputs.

From 2006–07 to 2016–17 the total value of capital for all Australian vegetable-growing farms decreased by around 15 per cent, in real terms (Figure 29). This decline in the total value of capital can be attributed to the reduction in the total number of vegetable-growing farms. On a per farm basis, average total capital increased by around 23 per cent to around $4.2 million per farm, largely as a result of recent increases in land values per hectare and the total value of plant and equipment per farm.

Figure 29 Total value of capital and number of farms, vegetable-growing farms, Australia, 2006–07 to 2016–17
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

From 2012–13 to 2016–17 land accounted for an average of 85 per cent of total capital per farm (Figure 30). Plant and equipment accounted for around 14 per cent of total capital and trading stocks accounted for around 1 per cent.

Figure 30 Components of capital, vegetable-growing farms, Australia, 2012–13 to 2016–17
average per farm
Note: Trading stocks is the value of all inventories including herd, flock, stocks of wool, fruit, vegetables and grains held on the farm at 30 June.
Source: ABARES Australian vegetable-growing farms survey

Return on land

ABARES uses two rates of return to farm capital—rate of return excluding capital appreciation and rate of return including capital appreciation. Rate of return is defined as farm profit expressed as a percentage of total capital. Because land is the largest component of total farm capital, it plays a key role in determining changes to total farm returns over the medium to longer term.

Due to the location of most Australian vegetable-growing farms, land values per hectare are generally much higher than those of other agricultural producers. From 2006–07 to 2016–17 the average value of land and fixed improvements per hectare for Australian vegetable-growing farms fluctuated, peaking at an average of around $21,500 per hectare in 2011–12 before decreasing to around $18,500 per hectare in 2016–17, in real terms (Figure 31). From 2006–07 to 2016–17 the average value of land and fixed improvements per hectare for vegetable-growing farms increased by around 21 per cent, in real terms.

Figure 31 Value of land and fixed improvements per hectare, vegetable-growing farms, Australia 2006–07 to 2016–17
average per farm
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

New farm investment

Most farmers make new investments each year to add to the existing capital stock or to replace capital items that have reached the end of their useful life. Farm investments are usually made with longer-term outcomes in mind and based on expected returns over the life of the investment.

In total, Australian vegetable growers made an average of $280 million in new capital investment in land, buildings, structures, plant and livestock each year from 2006–07 to 2015–16, in real terms (Figure 32). In 2016–17 vegetable growers made a total of $319 million in new investment in land, buildings and structures, and plant and livestock.

Figure 32 Aggregate capital additions, vegetable-growing farms, Australia, 2006–07 to 2016–17
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

From 2006–07 to 2016–17, on average, each year around 39 per cent of vegetable-growing farms made additions to their total capital (Figure 33). The average amount invested each year by those making capital additions was $267,000, in real terms. In 2006–07 a relatively low proportion of vegetable growers surveyed made relatively large capital additions, resulting in a much higher average for that year than subsequent years. In 2011–12 relatively fewer farms surveyed made large capital investments, resulting in a much lower average than in other years.

In 2016–17 an estimated 52 per cent of vegetable-growing farms made capital additions at an average of $241,000 per farm.

Figure 33 Total Capital additions, vegetable-growing farms, Australia, 2006–07 to 2016–17
proportion of farms and average per farm
p Preliminary estimate.
Note: Total capital additions is the average of those farms making capital additions.
Source: ABARES Australian vegetable-growing farms survey

Land is the biggest component of capital additions each year. However from 2012–13 to 2016–17 only 3 per cent of vegetable growers bought land each year, on average (Figure 34). Average expenditure on land for those making purchases was around $1.2 million per farm.

Over the period, around 39 per cent of all vegetable growers made additions to plant and equipment on average each year, at an average of around $111,000 per farm. Around 8 per cent of vegetable growers made additions to buildings and structures. Expenditure on these capital additions averaged around $251,000 per farm.

Figure 34 Components of capital additions, vegetable-growing farms, Australia, 2012–13 to 2016–17
proportion of farms and average per farm in category
Source: ABARES Australian vegetable-growing farms survey

Farm capital and investment, by state

Since 2006–07 the number of vegetable-growing farms in each state has decreased (Figure 1). From 2006–07 to 2016–17 the number of farms in South Australia fell by 44 per cent, with all other states besides New South Wales falling by more than 30 per cent.

In 2016–17 Victoria and Queensland each accounted for an estimated 24 per cent ($76 million) of the value of capital additions made by all vegetable growers (Figure 35), followed by New South Wales ($60 million) and South Australia ($46 million).

Figure 35 Aggregate capital additions, vegetable-growing farms, by state, 2016–17p
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

From 2006–07 to 2016–17 the share of total industry capital in each state has fluctuated, with an upward trend in Victoria but a downward trend in Queensland and South Australia (Figure 36). The share of total industry capital in New South Wales, Western Australia and Tasmania has fluctuated over time but is relatively unchanged from 2006–07 levels.

Figure 36 Proportion of total capital, vegetable-growing farms, by state, 2006–07 to 2016–17
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

When averaged over the 5 years to 2016–17 land was the primary component of farm capital for vegetable-growing farms in all states, accounting for more than 80 per cent of total capital, on average (Figure 37). Plant and equipment was the next largest, accounting for between 11 per cent and 16 per cent in all states. Livestock and trading stocks accounted for around 1 per cent of total capital in all states except Tasmania, where it accounted for 3 per cent, on average. This was because Tasmania has a higher proportion of vegetable growers who produce livestock or crops other than vegetables.

Figure 37 Components of capital, vegetable-growing farms, by state, 2012–13 to 2016–17
average per farm
Note: Trading stocks is the value of all inventories including herd, flock, stocks of wool, fruit, vegetables and grains held on the farm at 30 June.
Source: ABARES Australian vegetable-growing farms survey

From 2006–07 to 2016–17 changes in land values per hectare varied by state, with average land values trending upwards in New South Wales and Victoria, but falling in Queensland and Western Australia (Figure 38).

In 2006–07 a higher proportion of farms surveyed in Western Australia were located around Perth. As a result, average land values for that state were significantly higher in 2006–07 than in subsequent years.

Figure 38 Value of land and fixed improvements per hectare, vegetable-growing farms, by state, 2006–07 to 2016–17
average per farm
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

From 2012–13 to 2016–17 the average proportion of vegetable-growing farms making capital additions varied by state. Tasmania had the highest proportion of vegetable growers making capital additions in all three categories—buildings and structures, land, and plant and equipment (excluding leased) (Figure 39).

In all states, plant and equipment additions were the most common additions made by vegetable growing farms, followed by buildings and structures.

Figure 39 Farmers making capital additions, vegetable-growing farms, by state, 2012–13 to 2016–17
proportion of farms
Source: ABARES Australian vegetable-growing farms survey

Supplementary analysis

The Australian vegetable-growing industry faces a range of important challenges in the face of import competition, market fragmentation and tight margins. The industry includes many farm businesses that are geographically dispersed, people from a range of ethnic and cultural backgrounds, and supply a variety of products to meet domestic and export consumer demand.

The ABARES Australian vegetable-growing farms survey includes a set of supplementary questions that allow detailed analysis of a range of issues. These include: vegetable-growing cost of production; markets and value adding; irrigation and production management; training and business management; research and development; and opportunities and intentions.

Vegetable-growing cost of production

  • From 2007–08 to 2016–17 average unit prices received for vegetables and unit costs of production both increased, but the average margin received has fluctuated slightly over time.
  • The cost of labour makes up a considerable proportion of total costs for all vegetables.
  • When the cost of family labour is taken into account the average margin per ton (receipts over costs) in the 3 years to 2016–17 varies considerably between vegetables with average gross margins ranging between 26 per cent for tomatoes and around –0.5 per cent for broccoli.

Detailed vegetable-growing cost of production

James Frilay, Aruni Weragoda and Dale Ashton

The costs of producing vegetables is determined by a number of factors including the production system in use, the location of the farm, the type of vegetable(s) produced, and the scale and intensity of production.

When examined in aggregate, average cash costs do not tell the full story of how costs are changing for specific vegetables due to the highly varied production systems utilised by vegetable-growing farms. As such, the ABARES Australian vegetable-growing farms survey includes a series of questions to allow costs to be apportioned by vegetable crop.

Estimates of unit costs of production and receipts are useful for monitoring the pressures facing vegetable-growing farms. From 2007–08 to 2016–17 average unit prices received for vegetables and unit costs of production both increased, but the average margin received has fluctuated slightly over time (Figure 40).

Figure 40 Unit price received and cost of production per ton of vegetables produced, vegetable-growing farms, Australia, 2007–08 to 2016–17
average per farm
p Preliminary estimate.
Source: ABARES Australian vegetable-growing farms survey

Cost of production for selected vegetables

Table 19 shows a three year average of the main components of costs for vegetable-growing farms for a selection of vegetables. It is important to note that the table includes all types of vegetable-growing farms and, as such, will include farms that are producing highly-specialised products as well as large-scale farms producing vegetables for processing. Typically, these farms have widely varying production costs. For example, the results for tomatoes include some very large and highly intensive tomato growers that influence the results shown in Table 19.

Margins per ton (defined as the ratio of unit receipts to unit costs of production) vary between vegetables, with tomatoes having the highest margin at around 33 per cent and broccoli having the lowest at around 4 per cent. In absolute terms, tomatoes had the highest gross margin (defined as unit receipts minus unit costs) at $527 per ton and broccoli had the lowest at $74 per ton—both excluding the cost of family labour (Figures 41 and 42).

When the cost of family labour is taken into account the average margin per ton varies considerably between vegetables with average gross margins ranging between around –0.5 per cent for broccoli and 27 per cent for tomatoes. Tomatoes had the highest gross margin in absolute terms at an average of $432 per ton whereas broccoli had the lowest at an average of –$6 per ton.

Family labour is imputed using the hours reported by the co-operator that were worked by the owner-manager and any family members and then valued at the relevant award wage (see ABARES farm surveys definitions and methods). This ensures that family labour is valued equally across all farms.

Although the average margin for broccoli is negative when family labour is included, broccoli-growing farms still recorded positive average farm business profits. When averaged over the three years from 2014–15 to 2016–17, broccoli-growing farms had a farm cash income of around $634,200 per farm and an average farm business profit of $453,300 per farm. As such, these vegetable-growing farms derived their profits in this period from other enterprises or other vegetables planted and there may be rotational benefits from planting a broccoli crop.

Table 19 Average cost of production per ton, selected vegetables, Australia, 2014–15 to 2016–17
3 year average
  Unit Potatoes Onions Carrots Tomatoes Lettuce Broccoli
Administration $/t 8 5 5 19 25 32
Fuel $/t 22 19 16 58 38 59
Hired labour $/t 39 71 53 256 261 271
Contracts $/t 13 21 12 150 196 421
Electricity $/t 10 13 10 24 31 46
Packing and freight $/t 15 20 13 84 86 101
Fertiliser $/t 41 34 32 50 71 117
Repairs and maintenance $/t 31 31 25 70 67 131
Seed $/t 35 22 21 66 123 129
Chemicals $/t 19 24 16 41 56 84
Water $/t 2 2 1 10 6 21
Other costs $/t 76 90 43 266 340 515
Family labour $/t 37 19 13 95 49 80
Total cost $/t 312 353 248 1,094 1,299 1,929
Unit price received $/t 394 499 330 1,621 1,545 2,002
Margin $/t 82 146 81 527 246 74
Margin w/ family labour $/t 45 127 69 432 197 –6

Note: All dollar amounts are in 2017–18 dollars.
Source: ABARES Australian vegetable-growing farms survey

Figure 41 Average cost of production, potatoes, onions and carrots, Australia, 2014–15 to 2016–17
3 year average
Source: ABARES Australian vegetable-growing farms survey
Figure 42 Average cost of production, tomatoes, lettuce and broccoli, Australia, 2014–15 to 2016–17
3 year average
Source: ABARES Australian vegetable-growing farms survey

Table 20 and Figure 43 show a breakdown of costs by contribution to total costs. The three categories of labour (hired labour, contracts, and family labour) make up a considerable proportion of total costs ranging from around 26 per cent for potatoes to over 42 per cent for tomatoes. However, the utilisation of these three types of labour varies between vegetables produced, with tomato-growers having the highest proportion of hired labour, broccoli-growers having the highest proportion of contract labour and potato-growers having the highest proportion of family labour. The differences in the ratios of labour used are determined by a number of factors, including seasonality of the crop, methods of harvesting, and the availability of capital equipment to harvest specific types of vegetables. For example, an under-cover tomato-grower may require permanent staff to harvest their crop year-round whereas an outdoors broccoli-grower may only require contractors for harvesting over a few weeks.

Energy costs, consisting of electricity and fuel costs, comprised less than 10 per cent of total costs for all vegetables, with the highest being carrots where energy made up just under 10 per cent of total costs. Energy costs per ton were similar for carrots, potatoes and onions.

As a proportion of total costs, potatoes had the highest expenditure on seed, fertiliser, water and chemicals at 28 per cent whereas these inputs only comprised around 14 per cent of the total cost per ton for tomatoes.

Table 20 Components of production costs as a proportion of total cost, selected vegetables, Australia, 2014–15 to 2016–17
3 year average
  Unit Potatoes Onions Carrots Tomatoes Lettuce Broccoli
Administration % 2.2 1.5 2.0 1.6 1.8 1.6
Fuel % 6.3 5.2 6.0 4.9 2.8 2.9
Hired labour % 11.3 19.2 20.2 21.5 19.4 13.5
Contracts % 3.8 5.7 4.7 12.6 14.5 21.0
Family labour % 10.7 5.0 4.8 8.0 3.6 4.0
Electricity % 3.0 3.4 3.9 2.0 2.3 2.3
Packing and freight % 4.2 5.5 5.0 7.1 6.4 5.1
Fertiliser % 11.8 9.1 12.1 4.2 5.3 5.8
Repairs and maintenance % 8.7 8.3 9.7 5.9 5.0 6.5
Seed % 10.0 6.0 8.1 5.5 9.1 6.4
Chemicals % 5.6 6.5 6.2 3.5 4.1 4.2
Water % 0.6 0.4 0.6 0.8 0.4 1.0
Other costs % 21.8 24.2 16.5 22.4 25.2 25.6

Source: ABARES Australian vegetable-growing farms survey

Figure 43 Components of production costs as a proportion of total cost, selected vegetables, Australia, 2014–15 to 2016–17
3 year average
Source: ABARES Australian vegetable-growing farms survey

Cost of production by scale of production

The average cost of production for vegetables varies significantly by the scale of production (Tables 21 to 26). For all selected vegetables, the higher production farms had lower total costs per ton produced. However, the magnitude of the difference in production costs varied significantly between vegetables, with tomato-growers planting more than 2 hectares of tomatoes having the largest difference at almost $1,400 per ton lower than tomato-growers planting 2 hectares of tomatoes or fewer (Table 24).

Smaller-scale growers of potatoes, tomatoes, lettuce and broccoli received higher unit prices per ton than their larger counterparts. These differences in prices per ton may reflect differences in sale methods or the production of specialised types of these vegetables to secure a premium. Similarly, the larger producers may be growing their vegetables primarily to be processed or for bulk wholesale markets, and as such are not selling into the same markets as the smaller growers.

Labour costs per ton were lower for larger producers for all selected vegetables, and the mix of labour used varied significantly by scale of production. For all selected vegetables, farms with larger areas planted to the selected vegetable had lower family labour costs per ton, with hired labour or contracts comprising a greater proportion of total labour costs per hectare. It is possible that this is simply due to a higher scale of production requiring more labour than a family can provide or it could be attributed to the higher scale of production making it more appealing to hire contractors or to have permanent staff.

On average, farms in the smaller-size category reported negative margins when family labour is included for all selected vegetables. However, when whole-farm financial performance is averaged for the three years from 2014–15 to 2016–17, farms in both size categories reported positive average farm cash incomes. Similarly, average farm business profit was positive for all farm sizes and all selected vegetables except for smaller-scale tomato growers who reported an average farm business profit of –$4,200.

Table 21 Average cost of production per ton by scale of production, potatoes, Australia, 2014–15 to 2016–17
3 year average
  Potatoes
Unit 40 ha or fewer More than 40 ha
Administration $/t 11 6
Fuel $/t 25 20
Hired labour $/t 34 43
Contracts $/t 18 10
Electricity $/t 12 10
Packing and freight $/t 20 11
Fertiliser $/t 44 39
Repairs and maintenance $/t 38 26
Seed $/t 41 31
Chemicals $/t 24 17
Water $/t 3 2
Other costs $/t 91 68
Total cost $/t 361 282
Family labour $/t 68 18
Unit price received $/t 416 383
Margin $/t 55 101
Margin w/ family labour $/t –13 83

Note: All dollar amounts are in 2017–18 dollars.
Source: ABARES Australian vegetable-growing farms survey

Table 22 Average cost of production per ton by scale of production, onions, Australia, 2014–15 to 2016–17
3 year average
  Onions
Unit 15 ha or fewer More than 15 ha
Administration $/t 9 5
Fuel $/t 25 18
Hired labour $/t 57 76
Contracts $/t 43 15
Electricity $/t 12 13
Packing and freight $/t 23 19
Fertiliser $/t 45 31
Repairs and maintenance $/t 39 29
Seed $/t 19 24
Chemicals $/t 28 23
Water $/t 4 1
Other costs $/t 71 96
Total cost $/t 375 352
Family labour $/t 45 12
Unit price received $/t 369 537
Margin $/t –6 185
Margin w/ family labour $/t –51 173

Note: All dollar amounts are in 2017–18 dollars
Source: ABARES Australian vegetable-growing farms survey

Table 23 Average cost of production per ton by scale of production, carrots, Australia, 2014–15 to 2016–17
3 year average
  Carrots
Unit 15 ha or fewer More than 15 ha
Administration $/t 8 5
Fuel $/t 20 16
Hired labour $/t 47 54
Contracts $/t 35 9
Electricity $/t 12 10
Packing and freight $/t 12 13
Fertiliser $/t 37 31
Repairs and maintenance $/t 31 25
Seed $/t 14 22
Chemicals $/t 19 16
Water $/t 2 1
Other costs $/t 38 44
Total cost $/t 276 246
Family labour $/t 26 11
Unit price received $/t 241 340
Margin $/t –35 94
Margin w/ family labour $/t –61 83

Note: All dollar amounts are in 2017–18 dollars
Source: ABARES Australian vegetable-growing farms survey

Table 24 Average cost of production per ton by scale of production, tomatoes, Australia, 2014–15 to 2016–17
3 year average
  Tomatoes
Unit 2 ha or fewer More than 2 ha
Administration $/t 62 15
Fuel $/t 203 43
Hired labour $/t 509 231
Contracts $/t 118 154
Electricity $/t 81 18
Packing and freight $/t 96 84
Fertiliser $/t 143 41
Repairs and maintenance $/t 148 62
Seed $/t 183 54
Chemicals $/t 75 38
Water $/t 43 5
Other costs $/t 694 224
Total cost $/t 2,354 968
Family labour $/t 579 41
Unit price received $/t 2,789 1,487
Margin $/t 435 519
Margin w/ family labour $/t –145 478

Note: All dollar amounts are in 2017–18 dollars
Source: ABARES Australian vegetable-growing farms survey

Table 25 Average cost of production per ton by scale of production, lettuce, Australia, 2014–15 to 2016–17
3 year average
  Lettuce
Unit 5 ha or fewer More than 5 ha
Administration $/t 60 23
Fuel $/t 94 35
Hired labour $/t 716 234
Contracts $/t 99 205
Electricity $/t 73 29
Packing and freight $/t 30 91
Fertiliser $/t 120 67
Repairs and maintenance $/t 157 60
Seed $/t 242 117
Chemicals $/t 40 58
Water $/t 22 5
Other costs $/t 765 316
Total cost $/t 2,418 1,239
Family labour $/t 318 29
Unit price received $/t 2,166 1,507
Margin $/t –252 269
Margin w/ family labour $/t –570 239

Note: All dollar amounts are in 2017–18 dollars
Source: ABARES Australian vegetable-growing farms survey

Table 26 Average cost of production per ton by scale of production, broccoli, Australia, 2014–15 to 2016–17
3 year average
  Broccoli
Unit 15 ha or fewer More than 15 ha
Administration $/t 83 27
Fuel $/t 116 54
Hired labour $/t 518 251
Contracts $/t 239 435
Electricity $/t 80 43
Packing and freight $/t 91 102
Fertiliser $/t 173 112
Repairs and maintenance $/t 212 124
Seed $/t 168 125
Chemicals $/t 100 83
Water $/t 18 21
Other costs $/t 537 513
Total cost $/t 2,336 1,890
Family labour $/t 365 56
Unit price received $/t 2,567 1,955
Margin $/t 232 65
Margin w/ family labour $/t –133 8

Note: All dollar amounts are in 2017–18 dollars
Source: ABARES Australian vegetable-growing farms survey

Figure 44 Average cost of production, potatoes, carrots and onions, by scale of production, Australia, 2014–15 to 2016–17
3 year average
Source: ABARES Australian vegetable-growing farms survey
Figure 45 Average cost of production, tomatoes, lettuce and broccoli, by scale of production, Australia, 2014–15 to 2016–17
3 year average
Source: ABARES Australian vegetable-growing farms survey

Markets and value adding

  • In 2016–17 nearly one-half of all vegetable growers sold their produce to a wholesale vegetable market.
  • Very large vegetable-growing farms were more likely to sell their produce directly to processors or retailers than other vegetable growers.
  • An estimated 56 per cent of vegetable-growing farms engaged in some level of value adding to their produce in 2016–17, but only 8 per cent of growers regarded the extent of their value adding to be high.

Detailed markets and value adding

Aruni Weragoda, James Frilay and Dale Ashton

Vegetable growers have a range of options for selling their products and marketing is an important factor in determining the financial success of many vegetable-producing enterprises. Vegetables can be marketed directly by vegetable producers to consumers, or indirectly through other means such as wholesalers, brokers, processors, packing facilities or buyers for retail outlets.

Selling direct to the consumer, such as at farmers’ markets, has the lowest costs and lowest number of constraints. Another option is selling to restaurants and other food service providers. Typically, the volume of product sold is lower, demand may fluctuate more frequently, and more time needs to be spent on marketing and distribution.

Selling direct to retailers cuts out third parties and may be based on a contracted price that provides surety of income. This usually means also having to meet more exacting standards in quality and packaging, volume to service all retailers’ outlets, and continuity of supply.

Wholesale markets exist in all capital cities of Australia with most growers supplying an agent to market the product for them. Some agents specialise in certain crops or regions and have differing requirements for payments, quality assurance, packaging, and freight.
Selling product to processors typically attracts lower but more stable prices than achieved in fresh markets. However the number of processors operating in Australia has declined over the past decade.

In 2016–17 nearly one-half of all vegetable growers sold their produce to a wholesale vegetable market in their state (Figure 46). This was the most common selling method in all states except South Australia and Tasmania (Table 27). In South Australia and Tasmania the majority of vegetable producers sold their produce direct to a processor. Around 27 per cent of vegetable-growing farms across all states sold their produce direct to processors. Tasmania also had a relatively high proportion selling vegetables direct to food services (30 per cent).

Very large vegetable-growing farms with more than 70 hectares planted to vegetables were more likely to sell their produce directly to processors or retailers than other vegetable growers. However, they were less likely to sell directly at the local markets. Smaller vegetable-growing farms with less than 5 hectares planted to vegetables sold most of their produce at wholesale markets or directly at the local markets.

Selling direct to retailers

In 2016–17, vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling directly to retailers (such as Coles or Woolworths) were mostly very large farms, around 41 per cent of them planting more than 70 hectares of vegetables. The average area planted to vegetables by these farms was around 217 hectares per farm. These vegetable-growing farms earned substantially larger cash incomes (average around $1.4 million per farm) compared to farms selling to other markets. These farms had more intense vegetable producing operations with high levels of capital investments and very high rates of return (Table 28).

Selling to wholesale markets

Vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling to wholesale markets (in their state or in other states) were mostly small farmers with mainly outdoor vegetable operations. Around 39 per cent of these farms planted less than 5 hectares of vegetables. The average area planted to vegetables by these farms was around 24 hectares per farm. The average farm cash income of vegetable-growing farms selling mostly to wholesale markets was $275,100 per farm in 2016–17.

Selling direct to processors

Vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling directly to processors were mostly medium sized farms, with mainly outdoor vegetable operations and lower average rates of return. Around one-third of these farms planted 5 to 20 hectares of vegetables and another one-third planted around 20 to 70 hectares of vegetables. The average area planted to vegetables by these farms was around 41 hectares per farm. The average farm cash income of vegetable-growing farms selling mostly to food processors was $192,800 per farm in 2016–17.

Selling direct to local markets

Vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling directly to the public (including selling to local markets, farmers markets and food services sector) were mostly very small farms, with nearly half of them planting less than 5 hectares of vegetables. The average area planted to vegetables by these farms was around 18 hectares per farm.

Table 28 Selected performance measures, vegetable-growing farms, by selling method, 2016–17
average per farm or proportion of farms
Performance measure Unit Selling methods a
Wholesale Retail Processors Local markets
Total vegetable receipts $ 888,900 6,845,100 599,700 339,000
Farm cash income $ 275,100 1,402,600 192,800 133,300
Total capital $ 3,199,800 14,348,800 5,028,600 2,320,100
Rate of return
   - excluding capital appreciation % 6.0 9.8 2.3 3.2
Average area planted ha 24 217 41 18
Vegetable growing environment
   - Outdoor % 89 67 91 81
   - Hydroponics % 6 11 0 6
   - Under cover % 9 31 9 19
Area planted to vegetables
   - Less than 5 hectares % 39 26 17 47
  - 5 to 20 hectares % 35 11 32 36
  - 20 to 70 hectares % 18 22 32 12
  - More than 70 hectares % 8 41 20 5
Farms engaged in some form of value addition % 67 92 42 43
Farms with intention to undertake further value addition % 9 18 11 3

Note: Preliminary estimate. a Include vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling their produce to these markets.
Source: ABARES Australian vegetable-growing farms survey

Relationship with main buyer

An estimated 84 per cent of all vegetable-growing farms rated their relationship with their main buyer as being excellent or good. More than 80 per cent of vegetable-growing farms in each state had an excellent or good relationship with their main buyer except Victoria where around 70 per cent of vegetable-growing farms indicated this level of relationship. More than half of vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling directly at a local market indicated that they maintained an excellent relationship with their main buyer.

Value adding

Value adding includes a wide range of activities, including pre-packaging, pre-processing or pre-prepared meals in response to changing consumer habits. Value adding involves strategies of assessing end user needs and meeting these demands by developing new products, identifying niche markets, or responding to product trends.

An estimated 56 per cent of vegetable-growing farms engaged in some level of value adding to their produce in 2016–17. However, only 8 per cent of vegetable growers regarded the extent of their value adding to be high or very high. The proportion of vegetable-growing farms undertaking value adding varied by state. Only around 16 per cent of vegetable-growing farms in Tasmania undertook value adding compared to 89 per cent in South Australia. A higher proportion of farms receiving more than 50 per cent of their total vegetable receipts by selling directly to retailers engaged in some form of value adding compared to other producers in 2016–17.

In 2016–17, only 8 per cent of vegetable-growing farms indicated an intention to undertake more value adding activities on their farms in the future compared to one-third of farms in 2006–07. The proportion of vegetable growing farms with intentions of undertaking value adding also varied by state with higher proportion of South Australian vegetable-growing farms expecting to do more value adding compared to other states.

An estimated 92 per cent of vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling directly to retailers engaged in some level of value adding to their produce in 2016–17 and a higher proportion of these farms indicated their intention to undertake further value adding in the future (18 per cent) compared to other vegetable growers.

More than half of vegetable-growing farms that received more than 50 per cent of their total vegetable receipts by selling directly to food processors or at a local market did not engage in some level of value adding to their produce in 2016–17.

Irrigation and production management

  • In 2016–17 around one-quarter of Australian vegetable-growing farms indicated their intention to increase irrigation water use in the future, primarily by purchasing additional water entitlements.
  • Around two-thirds of vegetable growers conduct food safety assessments of irrigation water, test produce for chemical residues, and have a food safety program in place.
  • Nearly all vegetable growers have a pest and disease monitoring program.

Detailed irrigation and production management

Aruni Weragoda, James Frilay and Dale Ashton

Irrigation

Irrigation water is an important input to vegetable production and many farms are highly reliant on irrigation. An estimated 98 per cent of vegetable-growing farms used irrigation water in 2016–17.

In 2016–17, an average of 46 hectares of vegetable crops was irrigated per farm, ranging from 25 hectares in New South Wales to 90 hectares in Victoria. The average volume of water used was 188 megalitres per farm at an average water application rate of 4.1 megalitres per hectare of vegetables planted (Table 29).

Water use by vegetable-growing farms differs in each state, reflecting irrigation systems used, the main crops grown, and differences in soil type. Water application rates were lowest in Queensland and Tasmania. Vegetable-growing farms in Western Australia recorded the highest water application rate in 2016–17 mainly because the vegetable industry in Western Australia is almost totally dependent on irrigation rather than supplementing rainfall.

Table 29 Area irrigated and water applied, irrigated vegetable-growing farms, by state, 2016–17
average per farm
  Unit Australia NSW Vic. Qld SA WA Tas.
Total area of vegetables irrigated ha 46 25 90 58 27 32 28
Total volume of water applied to vegetables ML 188 101 470 144 139 178 107
Water application rate ML/ha 4.1 4.0 5.2 2.5 5.2 5.5 3.9

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Irrigation by crop

In 2016–17, carrots was the main crop irrigated by area irrigated (Table 30) and had the highest water application rate (7.1 megalitres per hectare). Lettuce and tomatoes also had larger water application rates in 2016–17. Green beans had the lowest rate (1.9 megalitres per hectare) in 2016–17.

Table 30 Area irrigated and water applied, irrigated vegetable-growing farms, by vegetable crop, 2016–17
average per farm irrigating each crop
  Area irrigated (ha) Water applied (ML) Water application rate (ML/ha)
Potatoes 32 145 4.5
Pumpkin 10 24 2.5
Green beans 61 115 1.9
Tomatoes 7 35 4.9
Onions 15 59 4.0
Carrots 72 514 7.1
Cauliflower 14 62 4.4
Broccoli 49 198 4.0
Cabbage 7 21 3.0
Lettuce 48 271 5.6
Capsicum 5 21 4.2
Other vegetables 19 67 3.5
All vegetables 46 188 4.1

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Future intentions

In 2016–17 around a quarter of Australian vegetable-growing farms indicated their intention to increase irrigation water use in the future, primarily by purchasing additional water entitlements (Table 31). Around two-thirds of these farms were larger farms growing more than 20 hectares of vegetables (Table 32). On average, vegetable-growing farms with an intention to increase irrigation water recorded higher farm cash incomes, high levels of capital investment and higher rates of return compared to farms with no intention to increase irrigation water.

An estimated 76 per cent of vegetable-growing farms expressed no intention to increase use of irrigation water. Most of these were smaller farms growing less than 20 hectares of vegetables (Table 32). These results likely reflect the differing locations of large and small vegetable-growing farms. The majority of small vegetable-growing farms tend to be located closer to major cities and large urban centres with greater access to town water and have less need to increase water use. Many large farms are located in areas that rely heavily on regulated irrigation systems and have less reliable annual rainfall.

Table 31 Farms intending to increase irrigation water use, Australia, 2016–17
percentage of farms
  Australia
Intending to increase irrigation water 24
Source of additional water a
Increase on-farm storage 31
Increase water re-use 15
Purchase water entitlements/licences 65
Access treated water 6
Other 21

Note: Preliminary estimates. a subset of farms intending to increase irrigation water. Total will not add to 100 because farmers can use more than one source of additional water.
Source: ABARES Australian vegetable-growing farms survey

Table 32 Selected estimates, by future irrigation water intentions, 2016–17
average per farm and percentage of farms
  Unit Farms intending to increase irrigation water Farms not intending to increase irrigation water
Less than 20 ha More than 20 ha Less than 20 ha More than 20 ha
Proportion of farms % 8 15 52 24
Total area of vegetables irrigated ha 6 164 7 71
Total volume of water applied to vegetables ML 23 737 23 262
Water application rate (ML/ha) 3.8 4.5 3.4 3.7
Source of additional water a
Increase on-farm storage % 42 25 na na
Increase water re-use % 12 16 na na
Purchase water entitlements/licences % 58 69 na na
Access treated water % 0 10 na na
Other % 41 9 na na

Note: Preliminary estimates. a subset of farms intending to increase irrigation water. Total will not add to 100 because farmers can choose more than one sources of additional water. na not applicable.
Source: ABARES Australian vegetable-growing farms survey

The average area of irrigated vegetables for vegetable-growing farms that expressed no intention to increase use of irrigation water was around 27 hectares per farm in 2016–17. Water application rates of these farms were slightly lower (3.7 megalitres per hectare) than farms that intended to increase future use of irrigation water (4.5 megalitres per hectare).

Of the vegetable-growing farms that expressed no intention to increase use of irrigation water more than half were located in New South Wales and Queensland (Figure 47). Only 6 per cent of these farms were in Tasmania. More than half of Victorian vegetable-growing farms that expressed no intention to increase use of irrigation water were larger farms growing more than 20 hectares of vegetables.

Figure 47 Farms with no intention to increase irrigation water use, by state, 2016–17
proportion of farms
Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Production management

In addition to irrigation, water use in vegetable production includes applications of pesticides and fertilizers, and post-harvest uses including produce rinsing, cooling, waxing, and transport. Concern about the quality of water used to grow fresh produce is directly related to the concern about the foodborne illness risks it may present. An estimated 63 per cent of Australian vegetable-growing farms in 2016–17 undertook a food safety assessment of their water source (Table 33). A lower proportion of vegetable growers in New South Wales conducted a risk assessment of their farm’s water source (31 per cent) than in other states.

Table 33 Production management precautions undertaken, by state, 2016–17
proportion of farms
  Unit NSW Vic. Qld SA WA Tas. Australia
Conducted a food safety assessment of the farm's water source % 31 81 65 55 89 84 63
Test produce for chemical residues % 29 88 58 60 92 96 64
Have a food safety program in place % 53 77 65 62 56 72 64
Have an environmental management program in place % 18 31 43 41 25 51 33
Have a pest and disease monitoring program in place % 99 95 99 100 100 98 98

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Around two-thirds of Australian vegetable-growing farms in 2016–17 tested their produce for chemical residues (Table 33). The proportion of vegetable growers who tested crops for chemical residues varied between states, with only an estimated 29 per cent of vegetable-growing farms in New South Wales conducting such a test, compared with 96 per cent in Tasmania.

An estimated 64 per cent of vegetable-growing farms already have food safety schemes (Table 33) such as Freshcare, Woolworths Quality Assured, Coles Quality Assured, Hazard Analysis and Critical Control Points (HACCP) or other farm specific food safety programs in place. Only 53 per cent of vegetable growers in New South Wales have a food safety program in place, compared with 77 per cent in Victoria.

An environmental management plan is important to integrate environmental considerations and requirements into day-to-day management and long-term planning for a farm to improve environmental and economic performance. However, only one-third of all vegetable-growing farms were implementing, or were considering having, an environmental management program in place (Table 33). However, around one-half of vegetable-growing farms in Tasmania implemented, or were considering having, an environmental management program in place.

A greater proportion of large vegetable-growing farms undertook production management activities to monitor food safety compared to smaller vegetable growers (Table 34). An estimated 86 per cent of large vegetable-growing farms conducted a food safety assessment of the farm’s water source, compared with 55 per cent of vegetable-growing farms with less than 5 hectares of vegetables sown. Around 87 per cent of large vegetable-growing farms tested produce for chemical residues, compared with 45 per cent of vegetable-growing farms with less than 5 hectares of vegetables sown. However, around one-half of large vegetable-growing farms had an environmental management plan for their property.

Table 34 Production management precautions undertaken, by area planted, 2016–17
proportion of farms
  Unit Less than 5 ha 5 to 20 ha 20 to 70 ha More than 70 ha
Conducted a food safety assessment of the farm's water source % 55 54 74 86
Test produce for chemical residues % 45 59 88 87
Have a food safety program in place % 49 55 82 92
Have an environmental management program in place % 27 26 43 51
Have a pest and disease monitoring program in place % 98 100 100 95

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

On average, vegetable-growing farms undertaking food safety assessment of their water source were higher performing farms with higher average farm cash incomes, capital invested and higher rates of return. This was also the case for vegetable growers who test their produce for chemical residues, having food safety programs in place and implementing environmental management programs on their property.

Presence of pests and diseases can significantly reduce crop yields, quality and subsequent incomes if not properly managed. As a result, most vegetable growers were concerned about pests and diseases, with an estimated 98 per cent of vegetable-growing farms having a pest and disease monitoring program in place (Table 33). Of the farms with a pest and disease monitoring program in place, around 97 per cent routinely conducted pest and disease monitoring. The rest of the farms conducted intermittent or occasional surveillance of pests and diseases. The proportion of farms undertaking routine surveillance of pests and diseases increased over the period from 2013–14 to 2016–17. All vegetable-growing farms with a pest and disease monitoring program in place in Victoria, South Australia and Western Australia conducted routine pest and disease monitoring compared with 93 per cent in New South Wales.

All large vegetable-growing farms with a pest and disease monitoring program in place conducted routine pest and disease monitoring. Around 95 per cent of small vegetable-growing farms with a pest and disease monitoring program in place conducted routine pest and disease monitoring and the remaining 5 per cent of farms conducted intermittent pest and disease monitoring.

Farms that undertook all of the above-mentioned production management precautions (conducting a food safety assessment of the farm's water source, testing produce for chemical residues, having a food safety program in place, having an environmental management program in place and having a pest and disease monitoring program in place) in 2016–17 were mostly larger farms with more than one-half of farms planting more than 20 hectares. An average of 88 hectares were planted to vegetables by these farms (Table 35). Potatoes, broccoli, green beans and lettuce were the main vegetables grown by area planted. On average, these farms were better performers with higher average farm cash incomes and rates of return. Of all farms that undertook all off these production management precautions, 26 per cent were in Queensland and 22 per cent were in Victoria.

Table 35 Selected estimates, vegetable-growing farms undertaking all production management precautions, 2016–17
average per farm and proportion
Selected estimates Unit Farms undertaking all management precautions All vegetable-growing farms
Area operated ha 255 195
Area planted to vegetables ha 88 38
Farm cash income $ 567,400 283,600
Total capital at 30 June $ 7,651,700 4,153,000
Rate of return (excluding capital appreciation) % 6.8 4.9
Proportion of area planted to vegetables
 - Potatoes % 19 14
 - Broccoli % 10 6
 - Green beans % 9 7
 - Lettuce % 8 5

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Vegetable production methods

On average around 92 per cent of vegetable receipts per farm in 2016–17 came from vegetables grown outdoors. Receipts from vegetables grown under cover and hydroponics contributed 4 per cent each to total vegetable receipts. More than 90 per cent of vegetable receipts in 2016–17 came from vegetables grown outdoors in all states except in South Australia. Only 72 per cent of vegetable receipts were from outdoor operations in South Australia.

In 2016–17, an estimated 13 per cent of vegetable-growing farms produced vegetables under cover (Table 3) and, on average, 54 per cent of their vegetable revenue came from vegetables grown under cover. An estimated 6 per cent of vegetable-growing farms produced vegetables hydroponically and, on average, 88 per cent of their vegetable revenue came from vegetables grown hydroponically.

Farms growing vegetables using hydroponics operated a smaller average land area and had a smaller area planted to vegetable crops compared to farms growing vegetables under cover or outdoors (Table 36). A range of vegetable types are grown hydroponically, however tomatoes (62 per cent) and cucumbers (20 per cent) were the main contributors to total vegetable receipts. The average estimated rate of return (excluding capital appreciation) achieved by farms using hydroponic production was the highest compared with farms using other covered or outdoor production.

The average price received for vegetables grown under cover or hydroponically was around four to five times the average amount received by farms growing vegetables outdoors (Table 36). However, as a result of the larger scale of production (area planted to vegetables and quantity of vegetables produced) by farms with outdoor operations, vegetable-growing farms with outdoor operations contributed 80 per cent of aggregate vegetable receipts in 2016–17. Despite receiving higher prices for their produce, farms that produced under cover or hydroponically contributed only 20 per cent of aggregate vegetable receipts in 2016–17.

Table 36 Selected estimates, vegetable-growing farms, by vegetable production method, 2016–17
average per farm
Selected estimates Unit Hydroponics Under cover Outdoor
Total area operated ha 27 61 216
Area planted to vegetables ha 3 22 42
Total vegetable receipts $ 1,334,300 1,843,300 981,900
Total cash receipts $ 1,361,700 1,879,100 1,178,600
Total cash costs $ 970,700 1,657,800 898,600
Farm cash income $ 391,000 221,400 280,000
Total capital at 30 June $ 2,936,900 2,309,700 4,390,200
Price received for vegetables $/t 3,500 2,900 700
Rate of return (excluding capital appreciation) % 12.9 5.0 4.6
Farm cash income per hectare of vegetables planted $/ha 117,300 10,300 6,700

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Vegetable-growing farms using hydroponics or other covered production also had fewer non-vegetable farm enterprises in 2016–17, with an average of 98 per cent of receipts from the sale of vegetables, compared with an average of 83 per cent for vegetable-growing farms with outdoor operations.

Tomatoes and lettuce mainly contributed to vegetable receipts of vegetable-growing under cover in 2016–17. Potatoes, carrots and lettuce were the main contributors to vegetable receipts of vegetable-growing farms with outdoor operations.

Training, technology, R&D and opportunities

  • Around two-thirds of vegetable growers used field days as a source of education and training, while around one-fifth attended conferences, workshops or short courses.
  • A majority of vegetable growers used information and communications technology to obtain meteorological information (59 per cent) and to manage their financial affairs (51 per cent).
  • Research on pest and disease management and higher-yielding varieties were most commonly identified as important to vegetable growers in 2016–17.
  • Around 40 per cent of vegetable growers perceived high quality products as a key growth opportunity.

Detailed training, technology, R&D and opportunities

Aruni Weragoda, James Frilay and Dale Ashton

Training and business management

Training and education is an important input for human resource development. Improved technical and farm management skills can generate substantial returns when organisations employ the new skills and knowledge productively. Around two-thirds of vegetable-growing farmers were involved in some kind of training and education related activity to improve their farm management and technical skills over the year from 1 July 2016 to 30 June 2017.

Attending demonstration sites or field days was the most popular training choice among vegetable-growing farms during this period. An estimated 62 per cent of vegetable growers attended field days to improve their farm management and technical skills in 2016–17 (Table 37). One-half of growers spent 1 to 2 days attending field days. Only 3 per cent of growers spent more than 5 days at field demonstrations.

Around 21 per cent of vegetable-growing farms attended workshops and around 18 per cent attended conferences. Around 6 per cent of vegetable growers attended other activities like agronomist visits, discussions with input suppliers such as seedling, fertiliser and chemical providers, and overseas trainings/research. A higher proportion of larger vegetable growers attended training activities compared with small vegetable growers.

Table 37 Training and education undertaken by vegetable-growing farms, by state, 2016–17
proportion of farms
  Unit NSW Vic. Qld SA WA Tas. Australia
Field days/demonstration sites % 69 66 53 68 26 85 62
Conferences % 15 42 15 20 3 4 18
Workshops/short courses % 21 18 16 19 19 41 21
TAFE % 1 1 1 1 0 0 1
Specialist training % 3 6 2 4 9 2 4
Other % 13 3 1 4 1 15 6

Note: Preliminary estimates. Percentages will not equal 100 because farms can attend multiple categories of training activities.
Source: ABARES Australian vegetable-growing farms survey

Around 8 per cent of vegetable-growing farms did not engage in any business management and general administration related tasks in the month prior to Australian vegetable-growing farms survey conducted between February to May 2017. Time spent on business management tasks differed by size of the vegetable-growing farm. Around 86 per cent of farms engaged in less than 50 hours of administration related activities during the period (Table 38). Farms engaging in business management and general administration related tasks spent on average 29 hours per month on those activities in 2016–17.

Business management and general administration related work was mostly done by unpaid staff including operators, family members and other partners in 2016–17. A majority of paid staff (87 per cent) were not involved in any of the business management and general administration tasks. However, paid staff of farms earning more than $2 million total cash receipts spent more time on business management and general administration related tasks compared with unpaid staff.

Table 38 Distribution of farms, by total cash receipts and monthly time spent on administrative tasks, vegetable-growing farms, Australia, 2016–17
proportion of farms
Time spent on administrative tasks per month Unit Total cash receipts
less than $500,000 $500,000 to less than $1 m $1m to less than $2m More than $2m Total
0 hours % 5 2 0 2 8
0 to less than 10 hours % 21 1 1 0 23
10 to less than 50 hours % 35 10 5 5 55
50 to less than 100 hours % 2 3 1 2 9
more than 100 hours % 0 1 1 4 5
Total % 62 17 8 12 100

Note: Preliminary estimates. Row and column totals may not sum to 100 due to rounding.
Source: ABARES Australian vegetable-growing farms survey

Technology

Information and communications technology (ICT) increases the communication and business opportunities for the agricultural community. These technologies increase the amount of information farmers can process, from details on day-to-day operations to the latest research that contribute to the advancement of agriculture. It also allows farmers to research alternative management decisions.

Most vegetable growers used computers/internet and related technologies to run their businesses in 2016–17 (around 82 per cent). However, its use was limited and most commonly used to assist vegetable-growing farms to obtain meteorological information (59 per cent) and to manage their financial affairs (51 per cent) (Table 39). An estimated 20 per cent of farms used ICT for other purposes such as to operate automated irrigation systems, direct sales, communicate with their stakeholders and to use social media to promote their business.

Table 39 Use of computers on vegetable-growing farms, by state, 2016–17
proportion of farms
Activity Unit NSW Vic. Qld SA WA Tas. Australia
GPS % 11 33 25 14 26 66 26
Financial affairs % 48 53 42 74 45 61 51
Market information % 27 41 43 62 49 35 41
Weather information % 42 52 83 54 48 68 59
Purchasing farm inputs % 26 29 22 45 25 16 26
Education % 18 13 17 22 49 29 22
Media releases % 4 8 19 15 37 18 14
Industry links % 17 39 28 42 37 46 32
Other % 42 6 1 14 57 6 20

Note: Preliminary estimates. Percentages will not equal 100 because farms can elect multiple categories of uses.
Source: ABARES Australian vegetable-growing farms survey

Fewer small vegetable-growing farms used computers and related technologies such as GPS in assisting vegetable production activities like preparing, planting, and harvesting compared with large vegetable-growing farms with more than 70 hectares planted to vegetables (Table 40). Larger farms have greater financial capacity to undertake the capital investments required to implement production related ICT.

Table 40 Use of computers on vegetable-growing farms, by size, 2016–17
proportion of farms
  Unit Less than 5 ha 5 to 20 ha 20 to 70 ha More than 70 ha
GPS % 4 16 51 69
Financial affairs % 41 40 71 73
Market information % 32 30 55 65
Weather information % 52 47 75 78
Purchasing farm inputs % 14 17 40 58
Education % 15 18 25 41
Media releases % 8 10 22 29
Industry links % 24 21 40 64
Other % 20 21 22 12

Note: Preliminary estimates. Percentages will not equal 100 because farms can select multiple categories of uses.
Source: ABARES Australian vegetable-growing farms survey

Research and development

Research and development is essential for ongoing growth and improvement in the productivity, profitability, competitiveness and sustainability of vegetable-growing farms. Research on pest and disease management was most commonly identified as important for vegetable growers in 2016–17. An estimated 91 per cent of vegetable-growing farms indicated it was a high priority (Table 41). Focus on higher-yielding varieties and farm productivity were also identified as high priority research areas.

Table 41 Research and development priorities, by state, 2016–17
proportion of farms
Research area Unit NSW Vic. Qld SA WA Tas. Australia
Pest and disease % 89 94 88 93 93 95 91
Higher-yielding varieties % 77 86 95 61 93 87 84
Farm productivity % 69 61 72 61 42 65 64
Marketing and market development % 23 47 48 38 33 44 38
Consumer research % 26 20 37 34 19 23 27
Chilling/storage technology % 23 23 11 26 30 24 21
Environmental sustainability % 39 33 68 66 30 53 48

Note: Preliminary estimates. The proportions are the proportion of farms indicating each research and development area as very high or high priority.
Source: ABARES Australian vegetable-growing farms survey

In 2016–17 almost all of the large vegetable growers indicated research on higher-yielding varieties were the important research area that would benefit them. Pest and disease management was the research and development priority most commonly identified as important for small vegetable growers, with around 85 per cent indicating it was a high priority. More than one-half of these farms were also interested in marketing and market development, and environmental sustainability research.

Around one-third of vegetable growers believe they were already as productive as possible (Table 42). However, 29 per cent of vegetable growers revealed introducing higher-yielding vegetable varieties as one way of increasing productivity on their farm. The next highest response was a need to introduce or expand their use of technology (21 per cent). An estimated 17 per cent of vegetable growers stated other practices such as introducing disease or insect resistant varieties and specialised staff training as ways to improve productivity.

Table 42 Management practices to improve vegetable-growing farm productivity, by state, 2016–17
proportion of farms
  Unit NSW Vic. Qld SA WA Tas. Australia
Expand mechanisation % 5 22 24 34 27 6 18
Introduce or expand technology use % 8 21 10 35 21 55 21
Increase scale of operation % 21 9 29 18 8 7 18
Improve financial management % 3 7 11 12 11 28 10
Introduce higher-yielding varieties % 29 35 24 33 13 43 29
Introduce genetically modified vegetables % 5 0 2 6 1 5 3
Nothing, already as productive as possible % 42 31 26 24 61 13 33
Other % 19 20 17 15 11 17 17

Note: Preliminary estimates. Percentages will not equal 100 because farms can select multiple categories of management practices.
Source: ABARES Australian vegetable-growing farms survey

Around 27 per cent of vegetable-growing farms operating with less than 5 hectares of vegetables planted believed there was nothing they could do to improve farm productivity (Table 43). However, 26 per cent of small vegetable-growing farms believed increasing the scale of operations would improve farm productivity. Similar to other groups, the next most common way that growers with small vegetable farms believed they could increase productivity was through higher-yielding varieties. More than one-half of large vegetable-growing farms operating with more than 70 hectares of vegetables planted believed introducing higher-yielding varieties and introducing or expanding the use of technology as ways to improve the productivity of their farms.

Table 43 Management practices to improve vegetable-growing farm productivity, by size, 2016–17
proportion of farms
  Unit less than 5 ha 5 to 20 ha 20 to 70 ha More than 70 ha
Expand mechanisation % 20 7 26 28
Introduce or expand technology use % 13 9 30 53
Increase scale of operation % 26 7 14 26
Improve financial management % 11 6 9 18
Introduce higher-yielding varieties % 24 17 39 59
Introduce genetically modified vegetables % 0 0 5 14
Nothing % 27 49 29 16
Other % 20 25 10 3

Note: Preliminary estimates. Percentages will not equal 100 because farms can select multiple categories of management practices.
Source: ABARES Australian vegetable-growing farms survey

Growth opportunities

The Australian vegetable industry is complex and diverse. It is spread over a wide range of geographic locations across the country. These diverse conditions offer several opportunities for vegetable-growing farms to capitalise as well as challenges vegetable growers face now and in the future.

According to the survey results, the opportunities for vegetable growers in 2016–17 are more likely to associate with providing high quality products and the development of niche vegetable markets (Table 44). Although 15 per cent of farms perceived export as an opportunity for growth, only 3 per cent of farms indicated that they sold their produce to export markets in 2016–17 (Figure 46). Around 25 per cent of Australian vegetable growers perceived other growth opportunities such as diversifying their product mix and accessing new markets like selling directly to public.

Table 44 Perceived growth opportunities for vegetable-growing farms, by state, 2016–17
proportion of farms
  Unit NSW Vic. Qld SA WA Tas. Australia
Exports % 5 21 13 20 19 26 15
Selling direct to retail % 10 6 13 30 7 6 11
Selling Direct to food services sector % 14 10 10 8 1 4 9
Niche products % 12 23 17 23 10 22 17
High-quality produce % 46 38 39 42 12 59 40
Value adding on vegetables % 3 5 5 25 3 4 6
Under protective cropping % 6 0 6 0 11 2 4
Hydroponics % 6 1 1 9 5 0 3
Other % 23 13 21 22 66 27 25

Note: Preliminary estimates. Percentages do not add to 100 per cent because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Future intentions

At the time of the survey in 2016–17, nearly two-thirds of vegetable growers intended to continue with vegetable production in five years time (Table 45). Another 7 per cent expected to focus on other agricultural production in five years time and 24 per cent expected to leave agriculture. In Victoria only one-half of vegetable-growers expected to continue vegetable production in five years time. The remaining 50 per cent of farms intended to either focus on other agricultural production or leave agriculture.

A higher proportion of smaller vegetable-growing farms with less than 20 hectares planted to vegetables expected to either focus on other agricultural production or leave agriculture in five years time compared with larger growers.

Table 45 Intentions of vegetable growers in five years, by state, 2016–17
proportion of farms
  Unit NSW Vic. Qld SA WA Tas. Australia
Continue with vegetable production % 66 50 63 78 70 69 65
Change to other agricultural production % 4 4 10 1 10 20 7
Leave agriculture % 29 45 23 7 15 10 24
Continue vegetable production and diversify to other agricultural production % 0 1 3 0 4 1 2
Other % 1 0 1 14 0 0 2

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

On average, vegetable growers indicating an intention to continue vegetable production in five years time operated a larger area of land and had a larger area planted to vegetables in 2016–17 than the farms intending to change to other agricultural production or leave agriculture (Table 46).

Table 46 Selected estimates, by farmers' intentions, 2016–17
average per farm
  Unit Continue vegetable production Change to other agricultural production Leave agriculture
Total area operated ha 252 121 67
Area planted to vegetables ha 51 14 14
Farm cash income $ 434,600 75,500 80,000
Rate of return (excluding capital appreciation) % 7.4 –0.9 0.7

Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

An estimated 20 per cent of vegetable-growing farms intended to expand vegetable production in the next three to five years during 2016–17 (Figure 48). Of those farms intending to expand vegetable production in the next three to five years, the most common method of expansion was to set-up additional vegetable-growing plots using existing farming area (Table 47).

Around 28 per cent of vegetable-growing farms in Tasmania expected to expand vegetable production in the next three to five years mainly by purchasing more land. Victorian vegetable-growing farms intended to expand vegetable production mainly by leasing more land.

Figure 48 Proportion of farms intending to expand in nest three to five years, by state, 2016–17
Note: Preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey
Table 47 Intentions to expand vegetable production in the next three to five years, by state, 2016–17
proportion of farms
  Unit NSW Vic. Qld SA WA Tas. Australia
Use existing land more intensively % 4 5 28 5 15 19 15
Additional vegetable area using existing farm land % 82 16 40 91 48 37 48
Purchase more land % 14 30 32 4 17 63 30
Lease more land % 4 78 15 4 29 48 30
Share farming % 0 0 0 0 0 8 1

Note: Preliminary estimates. These proportions are of the farms intending to expand vegetable production. Percentages do not add to 100 because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Around 42 per cent of large vegetable-growing farms with more than 70 hectares planted to vegetables intended to expand vegetable production in the next three to five years. The most common method of expansion was purchasing more land. Only 13 per cent of small vegetable-growing farms with less than 5 hectares planted to vegetables intended to expand vegetable production in the next three to five years mainly by setting-up additional vegetable-growing plots using existing farming area.

Constraints

In 2016–17 an estimated 93 per cent of vegetable-growing farms indicated that they would face one or more constraints if they were to change their current crop mix. Lack of knowledge or experience with growing particular crops and marketing those products, as well as climate suitability were the most common constraints revealed (Table 48). Vegetable-growing farms in Queensland identified soil type and availability of water also as constraints if they were to change crop mix. Water availability was the most constraining factor for Western Australian vegetable-growing farms followed by Knowledge or experience with marketing products.

Table 48 Constraints to changing vegetable crop mix, by state, 2016–17
proportion of farms
  Unit NSW Vic. Qld SA WA Tas. Australia
Soil type or topography % 7 26 26 17 6 27 18
Climate suitability % 8 27 35 30 47 23 26
Water availability % 14 14 26 6 57 19 21
Knowledge or experience with growing crops % 51 41 23 41 25 21 35
Knowledge or experience with marketing products % 45 28 16 35 56 0 30
Other % 19 9 11 23 32 48 20

Note: Preliminary estimates. Percentages do not add to 100 because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Around 6 per cent of vegetable growers saw export markets as a possible channel for expanding their market with no impediments (Table 49). However, growers highlighted a number of impediments to developing export markets. Around 64 per cent of vegetable growers considered promoting export was too difficult or time consuming. Lower prices for exported vegetables and higher shipping costs were also seen as major obstacles to developing export markets.

Table 49 Perceived impediments to developing export markets, by state, 2016–17
proportion of farms
  NSW Vic. Qld SA WA Tas. Australia
No local agents 3 14 1 17 4 4 6
Prices not high enough 8 25 19 46 8 8 18
Shipping costs too high 2 11 4 32 8 43 12
Transport not available 6 2 0 0 4 2 2
Additional infrastructure on farm 11 2 1 31 5 7 8
Too hard/time consuming 74 46 69 68 84 38 64
No developed markets 8 13 10 1 2 36 11
Other 2 5 7 2 9 27 7
No impediments 14 1 2 15 4 0 6

Note: Preliminary estimates. Percentages do not add to 100 per cent because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Vegetable-growing farms generally agree on the major factors threatening the viability of their farms regardless of their geographic location and size of the business. Increased farm input costs (such as water, fuel and fertiliser) was most commonly reported as a barrier to future viability of vegetable farms in 2016–17 (Table 50). Around two-thirds of vegetable-growing farms viewed input costs as a drawback. Other impediments reported by the majority of vegetable growers included increased distribution and marketing costs, and low vegetable prices due to import competition and other reasons. An estimated 30 per cent of vegetable growers reported other concerns such as biosecurity issues and supermarket domination in the market as risks to business viability.

Table 50 Perceived threats to business viability of vegetable-growing farms, by state, 2016–17
proportion of farms
  NSW Vic. Qld SA WA Tas. Australia
Increased on farm input costs 70 70 61 83 68 64 68
Increased marketing costs 43 43 36 44 71 22 42
Low prices due to imports 9 19 21 37 26 44 22
Low prices for other reasons 21 32 32 50 50 39 34
Availability of irrigation water 9 16 33 4 19 11 17
Quality of irrigation water 5 3 9 18 11 0 7
Environmental sustainability 6 0 4 11 9 4 5
Urban expansion 23 5 2 36 4 7 12
Closure of local processing plants 6 6 0 11 0 32 7
Access to labour 3 5 3 6 1 0 3
Cost of labour 8 21 5 5 8 17 11
Other 42 11 24 5 59 45 30

Note: Preliminary estimates. Percentages do not add to 100 per cent because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

A higher proportion of Tasmanian vegetable-growing farms indicated closure of a local processing plant as a major factor threatening their viability. Increase in cost of labour was seen as a major threat to the viability of Victorian vegetable-growing farms. A higher proportion of vegetable-growing farms in New South Wales and South Australia considered urban expansion also as a barrier for their viability compared with vegetable growers in other states. Smaller vegetable-growing farms with less than 5 hectares planted to vegetables also considered urban expansion as a major threat for their viability. Availability and quality of irrigation water and increased cost of labour are other factors that large vegetable-growing farms considered as barriers to business viability.

References

ABS 2018a, Agricultural commodities, Australia, 2016–17, cat. no. 7121.0, Australian Bureau of Statistics, Canberra, accessed 28 August 2018

ABS 2018b, Value of agricultural commodities produced, Australia, 2016–17, cat. no. 7503.0, Australian Bureau of Statistics, Canberra, accessed 27 August 2018.

ABARES 2018, Agricultural commodities: June quarter 2018, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

ABARES 2017, Agricultural commodity statistics 2017, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

AIHW 2018, Australia's health 2018: in brief, Australian Institute of Health and Welfare, Cat. No. AUS 222, Canberra.

AUSVEG 2012, Australian vegetable industry strategic investment plan 2012–2017, Horticulture Australia Limited, March.

Data and other resources


This project is funded by Hort Innovation, using the Hort Innovation Vegetable research and development levy, and co-investment from the Department of Agriculture and Water Resources. Hort Innovation is the grower-owned, not-for-profit research and development corporation for Australian horticulture.

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Last reviewed:
14 Dec 2018