Vegetable industry

The cost 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 individual vegetable crops.

Estimates of unit costs of production and receipts are useful for monitoring the pressures facing vegetable-growing farms. From 2007–08 to 2017–18, average unit prices received for vegetables and unit costs of production both increased, but the average margin received has fluctuated slightly over time (Figure 31).

Cost of production for selected vegetables

Table 18 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 18.

Note: All dollar amounts are in 2018–19 dollars.
Source: ABARES Australian vegetable-growing farms survey

Margins per tonne (defined as the ratio of unit receipts to unit costs of production) vary between vegetables, with tomatoes having the highest average margin at around 34% and broccoli having the lowest average at around –3% from 2015–16 to 2017–18. In absolute terms, tomatoes had the highest gross margin (defined as unit receipts minus unit costs) at $696 per tonne and broccoli had the lowest at –$61 per tonne—both excluding the cost of family labour (Figure 32 and Figure 33).

When the cost of family labour is taken into account the average margin per tonne varies considerably between vegetables with average gross margins ranging between around –7 % for broccoli and 28% for tomatoes. Tomatoes had the highest gross margin in absolute terms at an average of $573 per tonne whereas broccoli had the lowest at an average of –$151 per tonne from 2015–16 to 2017–18.

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 2015–16 to 2017–18, broccoli-growing farms had a farm cash income of around $682,700 per farm and an average farm business profit of $503,700 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 and Figure 34 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% for potatoes to over 43% 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.

Note: Columns may not sum to 100 due to rounding.
Source: ABARES Australian vegetable-growing farms survey

Energy costs, consisting of electricity and fuel costs, comprised less than 10% of total costs for all vegetables, except carrots where energy made up just under 11% of total costs. Energy costs per tonne 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 29%, closely followed by carrots at 28% whereas these inputs only comprised around 15% of the total cost per tonne for tomatoes.

Cost of production by scale of production

The average cost of production for vegetables varies significantly by the scale of production (Tables 20 to 25, Figure 35 and Figure 36). For all selected vegetables, except carrots, the higher production farms had lower total costs per tonne produced. However, the magnitude of the difference in production costs varied significantly between vegetables. Lettuce-growers planting more than 5 hectares of lettuce had the largest difference at around $1,100 per tonne lower than lettuce-growers planting 5 hectares or fewer (Table 24).

Note: All dollar amounts are in 2018–19 dollars.
Source: ABARES Australian vegetable-growing farms survey

Note: All dollar amounts are in 2018–19 dollars
Source: ABARES Australian vegetable-growing farms survey

Note: All dollar amounts are in 2018–19 dollars
Source: ABARES Australian vegetable-growing farms survey

Note: All dollar amounts are in 2018–19 dollars
Source: ABARES Australian vegetable-growing farms survey

Note: All dollar amounts are in 2018–19 dollars
Source: ABARES Australian vegetable-growing farms survey

Note: All dollar amounts are in 2018–19 dollars
Source: ABARES Australian vegetable-growing farms survey

Smaller-scale growers of potatoes, onions, tomatoes, lettuce and broccoli received higher unit prices per tonne than their larger counterparts. These differences in prices per tonne 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 tonne were lower for larger producers for potatoes, onions, tomatoes and lettuce, 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 tonne, 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, lettuce and broccoli farms in the smaller-size category reported negative margins when family labour is included. However, when whole-farm financial performance is averaged for the three years from 2015–16 to 2017–18, 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.

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-growing farms. 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, higher 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 2017–18, more than half of all vegetable growers sold their produce to a wholesale vegetable market in their state (Figure 37). This was the most common selling method in all states except Tasmania, where the majority of vegetable producers sold their produce direct to processors (Table 26). South Australia, Victoria and Western Australia also had a relatively high proportion selling vegetables direct to processors.

Note: Based on preliminary estimates. Columns will not sum to 100 because farms can sell vegetables to multiple markets.
Source: ABARES Australian vegetable-growing farms survey

The most common selling method for vegetable growers across all size categories was selling produce to a wholesale market in their state. Very large vegetable-growing farms with more than 70 hectares planted to vegetables were more likely to export their produce than smaller vegetable growers. However, larger farms were less likely to sell directly at the local markets. Vegetable-growing farms with more than 5 hectares planted to vegetables also had a relatively high proportion selling vegetables direct to processors.

Selling direct to retailers

In 2017–18, vegetable-growing farms that received more than 50% of their total vegetable receipts by selling directly to retailers (such as Coles or Woolworths) were mostly small farms, around 57% of them planting less than 5 hectares of vegetables. These small farms accounted for 22% of the gross value of vegetable production. An estimated 18% of the farms selling directly retailers were very large farms planting more than 70 hectares of vegetables and these farms accounted for 57% of the gross value of vegetable production. More than half of these farms selling directly to retailers were located in Queensland. The average area planted to vegetables by these farms was around 125 hectares per farm. These vegetable-growing farms earned substantially larger cash incomes (average around $1.6 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 27).

Note: Based on preliminary estimates. Includes vegetable-growing farms that received more than 50% of their total vegetable receipts by selling their produce to these markets. a Excluding capital appreciation.
Source: ABARES Australian vegetable-growing farms survey

Selling to wholesale markets

Vegetable-growing farms that received more than 50% 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 40% of these farms planted fewer than 5 hectares of vegetables. These small farms accounted for only 9% of the gross value of vegetable production. An estimated 11% of the farms selling directly to wholesale markets were very large farms planting more than 70 hectares of vegetables and these farms accounted for 60% of the gross value of production. The average area planted to vegetables by these farms was around 33 hectares per farm. The average farm cash income of vegetable-growing farms selling mostly to wholesale markets was $249,200 per farm in 2017–18.

Selling direct to processors

Vegetable-growing farms that received more than 50% of their total vegetable receipts by selling directly to processors were mostly medium sized farms, with mainly outdoor vegetable operations. Around one-half of these farms planted 5 to 20 hectares of vegetables and accounted for 9% of the gross value of vegetable production. Another one-quarter planted around 20 to 70 hectares of vegetables and accounted for 17% of the gross value of vegetable production. The average area planted to vegetables by these farms was around 48 hectares per farm. The average farm cash income of vegetable-growing farms selling mostly to food processors was $197,200 per farm in 2017–18.

Selling direct to local markets

Vegetable-growing farms that received more than 50% of their total vegetable receipts by selling directly to the public (including selling to local markets, farmers’ markets and food services sector) were mostly smaller farms, with nearly one-third of them planting fewer than 5 hectares of vegetables and another one-third planting around 20 to 70 hectares of vegetables. These farms together accounted for 26% of the gross value of vegetable production. Most of these farms were mainly outdoor vegetable operations that recorded lower than average rates of return. The average area planted to vegetables by these farms was around 22 hectares per farm. A majority of these farms were located in Victoria (around 43%).

Relationship with main buyer

An estimated 89% of all vegetable-growing farms rated their relationship with their main buyer as being excellent or good. More than 80% of vegetable-growing farms in each state had an excellent or good relationship with their main buyer except Western Australia where around 74% of vegetable-growing farms indicated this level of relationship.

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 2017–18. However, only 9% 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 15% of vegetable-growing farms in Tasmania undertook value adding compared to 86% in South Australia. A higher proportion of farms receiving more than 50% of their total vegetable receipts by selling directly to retailers engaged in some form of value adding compared to other producers in 2017–18.

In 2017–18, only 11% of vegetable-growing farms indicated an intention to undertake more value adding activities on their farms in the future compared to one-quarter of farms in 2007–08. The proportion of vegetable growing farms with intentions of undertaking value adding also varied by state with a higher proportion of Western Australian vegetable-growing farms expecting to do more value adding compared to other states.

An estimated 93% of vegetable-growing farms that received more than 50% of their total vegetable receipts by selling directly to retailers engaged in some level of value adding to their produce in 2017–18 and 16% of these farms indicated their intention to undertake further value adding in the future.

More than half of vegetable-growing farms that received more than 50% 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 2017–18.

Irrigation

Irrigation water is an important input to vegetable production and many farms are highly reliant on irrigation. An estimated 97% of vegetable-growing farms used irrigation water in 2017–18.

In 2017–18, an average of 47 hectares of vegetable crops was irrigated per farm, ranging from 26 hectares in Tasmania to 65 hectares in Victoria. The average volume of water used was 172 megalitres per farm at an average water application rate of 3.6 megalitres per hectare of vegetables planted (Table 28).

Water use by vegetable-growing farms differs in each state, reflecting irrigation systems used, the main crops grown, differences in soil type and rainfall received during the growing season. Water application rates were lowest in Queensland in 2017–18. Vegetable-growing farms in South Australia recorded the highest water application rate in 2017–18.

Note: Based on preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Irrigation by crop

In 2017–18, lettuce was the main crop irrigated by area irrigated (Table 29), while Asian vegetables had the highest water application rate (6.8 megalitres per hectare). Tomatoes and onions also had higher water application rates in 2017–18. Green peas had the lowest rate (1.7 megalitres per hectare) in 2017–18.

Pumpkins had the highest rate of irrigation water used per tonne of output produced (4.7 megalitres per hectare) in 2017–18. Cabbages had the lowest rate of irrigation water used per tonne of output produced (0.06 megalitres per hectare).

Note: Based on preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Future intentions

In 2017–18 around one-third of Australian vegetable-growing farms indicated their intention to increase irrigation water use in the future, primarily by purchasing additional water entitlements (Table 30). Around 60% of these farms were smaller farms growing less than 20 hectares of vegetables (Table 31). The average area of irrigated vegetables for vegetable-growing farms that expressed their intention to increase use of irrigation water was around 86 hectares per farm in 2017–18. 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 66% of vegetable-growing farms expressed no intention to increase use of irrigation water. Most of these were smaller farms growing fewer than 20 hectares of vegetables.

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

Note: Based on preliminary estimates. a subset of farms intending to increase irrigation water. Total will not add to 100 because farms can use 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 28 hectares per farm in 2017–18. Water application rates of these farms were only slightly lower (3.5 megalitres per hectare) than farms that intended to increase future use of irrigation water (3.7 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 38). Only 5% of these farms were in Tasmania. All Tasmanian vegetable-growing farms that expressed no intention to increase use of irrigation water were larger farms growing more than 20 hectares of vegetables.

Production management

There are a number of food safety concerns in terms of microbiological, chemical or physical hazards associated with producing fresh vegetables on farm at any stage of production. Maintaining good agricultural practices and farm hygiene is vital to minimise food contamination and retain consumer confidence.

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 61% of Australian vegetable-growing farms in 2017–18 undertook a food safety assessment of their water source (Table 32). A lower proportion of vegetable growers in New South Wales conducted a risk assessment of their farm’s water source (38%) than in other states.

Note: Based on preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Around two-thirds of Australian vegetable-growing farms in 2017–18 tested their produce for chemical residues (Table 32). The proportion of vegetable growers who tested crops for chemical residues varied between states, with only an estimated 33% of vegetable-growing farms in New South Wales conducting such a test, compared with 87% in Victoria.

An estimated 74% of vegetable-growing farms already have food safety schemes (Table 32) 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 65% of vegetable growers in New South Wales have a food safety program in place, compared with 85% 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 45% of all vegetable-growing farms were implementing, or were considering having, an environmental management program in place (Table 32). However, around two-thirds of vegetable-growing farms in Queensland 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 33). An estimated 84% of large vegetable-growing farms conducted a food safety assessment of the farm’s water source, compared with 57% of vegetable-growing farms with less than 5 hectares of vegetables sown. Around 89% of large vegetable-growing farms tested produce for chemical residues, compared with 49% of vegetable-growing farms with less than 5 hectares of vegetables sown. However, less than one-half of large vegetable-growing farms had an environmental management plan for their property.

Note: Based on 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 96% of vegetable-growing farms having a pest and disease monitoring program in place (Table 32). Of the farms with a pest and disease monitoring program in place, around 98% routinely conducted pest and disease monitoring. The rest of the farms conducted intermittent or occasional surveillance of pests and diseases. All vegetable-growing farms with a pest and disease monitoring program in place in, South Australia and Western Australia conducted routine pest and disease monitoring.

A higher proportion of large farms (planting more than 20 hectares of vegetables) undertook production management precautions in 2017–18—that is, 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 (Table 34). On average, these farms were better performers with higher average farm cash incomes and rates of return.

Note: Based on preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

Vegetable production methods

On average around 90% of vegetable receipts per farm in 2017–18 came from vegetables grown outdoors. Receipts from vegetables grown hydroponically contributed 7% to total vegetable receipts and vegetables grown under cover contributed the remaining 2% to total vegetable receipts. Around 90% of vegetable receipts in 2017–18 came from vegetables grown outdoors in all states except in South Australia. Only 81% of vegetable receipts were from outdoor operations in South Australia.

In 2017–18, an estimated 15% of vegetable-growing farms produced vegetables under cover and, on average, 58% of their vegetable revenue came from vegetables grown under cover. An estimated 10% of vegetable-growing farms produced vegetables hydroponically and, on average, 89% of their vegetable revenue came from vegetables grown hydroponically.

Farms growing vegetables using hydroponics operated a smaller average land size and had a smaller area planted to vegetable crops compared to farms growing vegetables under protection or outdoors (Table 35). A range of vegetable types are grown hydroponically, however tomatoes (66%) and cucumbers (13%) mainly contributed to total hydroponic vegetable receipts. The average estimated rate of return (excluding capital appreciation) achieved by farms using hydroponic production was higher than farms using other covered or outdoor production.

The average price received for vegetables grown under cover or hydroponically was around five to six times that received by farms that grew vegetables outdoors. However, as a result of the larger scale of production (area planted to vegetables and quantity of vegetables produced), vegetable-growing farms with outdoor operations contributed to 84% of total vegetable receipts in 2017–18. Despite receiving higher prices for their produce, farms that produced under cover or hydroponically contributed only 16% of total vegetable receipts in 2017–18.

Note: Based on 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 2017–18, with an average of 96% of receipts from the sale of vegetables, compared with an average of 86% for vegetable-growing farms with outdoor operations.

Capsicum and tomatoes mainly contributed to vegetable receipts of vegetable-growing under cover in 2017–18. Potatoes, carrots and lettuce were the main contributors to vegetable receipts of vegetable-growing farms with outdoor operations.

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 70% of vegetable-growing farmers were involved in some kind of training and education related activity to improve their farm management and technical skills in 2017–2018.

Attending demonstration sites or field days was the most popular training choice among vegetable-growing farms during this period. An estimated 59% of vegetable growers attended field days to improve their farm management and technical skills in 2017–18 (Table 36). Of these vegetable growers, around 84% spent 1 to 2 days attending field days, while only 6% spent 5 days or more at field demonstrations.

Note: Based on preliminary estimates. Columns may not sum to 100 because farms can attend multiple categories of training activities.
Source: ABARES Australian vegetable-growing farms survey

Around 22% of vegetable-growing farms attended workshops and around 20% attended conferences. Around 7% of vegetable growers attended other activities like agronomist visits and discussions with input suppliers such as seedling, fertiliser and chemical providers. A higher proportion of larger vegetable growers attended training activities compared with smaller vegetable growers.

Business management is important to ensure efficient performance of all sections in an agricultural business by managing farms’ resources to meet the challenges of varying costs, process and climatic conditions. Around 8% of vegetable-growing farms did not engage in any business management and general administration related tasks in the month prior to the Australian vegetable-growing farms survey conducted from February to May 2018. A majority of farms engaged in less than 50 hours of administration related activities during the period (Table 37). Farms engaging in business management and general administration related tasks spent on average 34 hours per month on those activities in 2017–18.

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

Business management and general administration related work was mostly done by unpaid staff including operators, family members and other partners in 2017–18. A majority of paid staff (83%) 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. Western Australian vegetable growing farms staff spent more time on business management and general administration related work compared to other states.

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 2017–18 (93%). Its major uses were to assist vegetable-growing farmers to obtain meteorological information (57%), to manage their financial affairs (53%) and to obtain market information (48%) (Table 38). A higher proportion of farms in Queensland, Western Australia and Tasmania used ICT to assist them with industry linkages. An estimated 22% of farms used ICT for other purposes such as to operate automated irrigation systems, record keeping, direct sales, and to use social media to promote their business.

Note: Based on preliminary estimates. Columns may not sum to 100 because farms can elect multiple categories of uses.
Source: ABARES Australian vegetable-growing farms survey

Fewer smaller vegetable-growing farms planting less than 20 hectares of vegetables used computers and related technologies, such as GPS in assisting vegetable production activities like preparing, planting and harvesting (Table 39). Larger farms generally have greater financial capacity to undertake the capital investments required to implement production related ICT.

Note: Based on preliminary estimates. Columns may not sum to 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 the ongoing growth and improvement in 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 2017–18. An estimated 92% of vegetable-growing farms indicated it was a high priority (Table 40). Focus on higher-yielding varieties of vegetables (88%) and farm productivity (75%) were also identified as high priority research areas.

Note: Based on 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 2017–18, almost all large vegetable growers indicated research on higher-yielding varieties was the most important research area to benefit their business. Around 97% of all large vegetable growers placed very high or high priority for research on pest and disease management. Pest and disease management was the research and development priority most commonly identified as important for small vegetable growers. More than one-half of small farms and around two-thirds of larger growers indicated that environmental sustainability research was important for their business.

An estimated 28% of vegetable growers believe they were already as productive as possible (Table 41). However, 33% 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 (29%). An estimated 19% of vegetable growers stated other practices such as introducing disease or insect resistant varieties and specialised staff training as ways to improve productivity.

Note: Based on preliminary estimates. Columns may not sum to 100 because farms can select multiple categories of management practices.
Source: ABARES Australian vegetable-growing farms survey

Around one-third 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 42). However, 28% of small vegetable-growing farms believed increasing the scale of operations would improve farm productivity. Only 12% of large vegetable-growing farms operating more than 70 hectares of vegetables believed there was nothing they could do to improve farm productivity. An estimated 59% of large vegetable-growing farms operating more than 70 hectares of vegetables believed introducing higher-yielding varieties and around 53% thought introducing or expanding the use of technology was a way to improve the productivity of their farms.

Note: Based on preliminary estimates. Columns may not sum to 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, diverse and spread over a wide range of geographic locations. These diverse conditions offer a variety of opportunities for vegetable-growing farms as well as challenges now and in the future.

Producing high quality produce and niche products were identified as growth opportunities most often by survey participants in 2017–18 (Table 43). Although 15% of farms perceived exports as an opportunity for growth, only 3% of farms indicated that they sold their produce to export markets in 2017–18 (Figure 37). Around 21% of Australian vegetable growers perceived other growth opportunities such as diversifying their product mix, accessing new markets like selling directly to the public and vertical integration.

Note: Based on preliminary estimates. Columns may not sum to 100 because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Future intentions

At the time of the survey in 2017–18, around 68% of Australian vegetable growers intended to continue with vegetable production in five years’ time (Table 44). An estimated 11% of farms expected to change or diversify into other agricultural production in five years’ time and 18% expected to leave agriculture. Around 80% of vegetable growers in New South Wales and South Australia expected to continue vegetable production in five years’ time. In Western Australia, only 29% of vegetable-growers expected to continue vegetable production in five years’ time and many farms in the survey had already significantly scaled back their vegetable operations in 2017–18. Some of these Western Australian farms were exiting farming altogether while others were shifting their enterprise mix away from vegetables.

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 vegetable growers.

Note: Based on preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

On average, vegetable growers indicating an intention to continue vegetable production in five years were larger and more profitable in 2017–18 than farms intending to change to other agricultural production or leave agriculture (Table 45).

Note: Based on preliminary estimates.
Source: ABARES Australian vegetable-growing farms survey

An estimated 24% of vegetable-growing farms intended to expand vegetable production in the next three to five years (Figure 39). Of those farms, the most common method of expansion was to set-up additional vegetable-growing plots using existing farming area (Table 46).

Note: Based on preliminary estimates. These proportions are of the farms intending to expand vegetable production. Columns may not sum to 100 because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Purchasing or leasing more land were the main methods of expansion by vegetable-growing farms in Tasmania, Western Australia and Victoria intending to expand vegetable production in the next three to five years (Table 46).

Around 37% 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. An estimated 30% 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 2017–18, an estimated 98% of vegetable-growing farms indicated that they would face one or more constraints if they were to change their current crop mix. Climate suitability and a lack of knowledge or experience with growing particular crops were the most common constraints (Table 47). Vegetable-growing farms in Tasmania identified soil type as the major constraint 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. Around 19% of vegetable-growing farms indicated other constraints such as lack of investment to change technology and infrastructure to suit the desired cropping mix.

Note: Based on preliminary estimates. Columns may not sum to 100 because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Only around 9% of vegetable growers saw no impediments to developing export markets (Table 48). Around 56% of vegetable growers considered promoting exports was too difficult or time consuming. No developed markets and low prices for exported vegetables were also seen as major obstacles to developing export markets.

Note: Based on preliminary estimates. Columns may not sum to 100 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 reported by around 70% of growers as a barrier to future viability of vegetable farms in 2017–18 (Table 49). An estimated 47% of vegetable growers reported increased marketing costs as a risk to business viability, while around 24% of vegetable growers reported other concerns such as biosecurity issues, supermarket domination and climate change and frequent adverse weather conditions as risks.

Note: Based on preliminary estimates. Columns may not sum to 100 because multiple responses were allowed.
Source: ABARES Australian vegetable-growing farms survey

Lower prices was seen as the major threat to business viability by Western Australian vegetable-growing farms. A higher proportion of Queensland vegetable-growing farms indicated the cost of labour as a major threat to business viability compared with growers in other states. A higher proportion of vegetable-growing farms in New South Wales and South Australia considered urban expansion as a barrier to 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 to their viability. Availability of irrigation water and increased cost of labour are other factors that large vegetable-growing farms considered as barriers to business viability.

ABARES 2019, Agricultural commodities: June quarter 2019, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra, accessed 26 July 2019.

ABS 2019a, Agricultural Commodities, Australia, 2017–18, cat. no. 7121.0, Australian Bureau of Statistics, Canberra, accessed 26 July 2019.

ABS 2019b, Value of agricultural commodities produced, Australia, 2017–18, cat. no. 7503.0, Australian Bureau of Statistics, Canberra, accessed 26 July 2019.

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

Agriculture 2019, Vegetables levy and charge, Department of Agriculture, Water and the Environment, accessed 7 November 2019.

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