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Insights October 2021

11 October 2021 |Horticulture
Workers in the field

Insights October 2021

11 October 2021 |Horticulture
The October update provides an analysis of production and pricing trends for Australian horticulture producers.

Commodity Overview

  • Over six million mango trays are forecast to be picked in the Northern Territory this season with harvest due to peak in October.
  • Avocado prices have remained at near record lows with strong production expected to keep prices low throughout October.
  • Onion production is expected to remain similar to 2020, a rise in retail buying offsetting a decline in hospitality demand.

The ongoing seasonal labour shortage will likely continue to impact growers over the short term. In positive labour news, four countries are negotiating to be included in the Agricultural worker visa scheme. It is hoped workers taken in under the scheme could arrive in Australia before the end of 2021. The ABARES Commodities Report for this quarter has forecast record horticultural production of $12.4 billion in 2021/22. This jump in value has been driven by the high prices and strong production currently seen across the horticulture sector.

Fruit
Mango harvest within the Northern Territory has continued to pick up pace over the past month. Over six million trays are expected to be delivered this season. Darwin has delivered almost 1.4 million trays so far, with Katherine’s harvest only just beginning over the last fortnight. Mango harvest across the NT is forecast to peak in late October before stabilising throughout November. Queensland mango production has been impacted by poor flowering across the winter and spring period.

Avocado prices continue to dwindle due to the ongoing strong production seen across Australia and New Zealand. NSW avocados are currently being sold below the cost of production as a result. This high supply means prices are unlikely to increase over the short term. The costs of bringing in overseas labour is further exacerbating the strain upon growers with many struggling to make a profit. The low prices have seen a surge in consumer demand, though it remains to be seen if this demand will continue in 2022.  

The USDA have forecast a slight increase in Australian table grape production in 2021/22. Production is expected to reach 210,000 mt a 10,000 mt increase upon last year's estimates. This production rise has been driven by increased plantings over past years and strong growing conditions.

Vegetables
Following the previous year’s onion harvest of 250,000 mt, similarly sized harvest is expected in 2021/22 with most planting now complete. Due to lockdowns in Victoria and New South Wales, hospitality demand for onions has been lower. This has been balanced out by increased retail demand due to an increase in home cooking. Onions which may have previously been too large for retail sales have been on shelves instead of in restaurant kitchens. Export demand is difficult to gauge at this point. However, increased freight and labour costs may present a hurdle to overseas markets.

Potatoes are facing similar issues. Demand for Australian potatoes continues to grow in South Korea, Malaysia, the Philippines, and Singapore. Despite this, various disruptions are impacting potato exporters. Container shortages and increased freight costs continue to limit and disrupt a smooth export program.

Nuts
A promising 2022 almond season has been forecast for Australian producers. This is due to higher almond prices following a poor Californian crop. Favourable growing conditions have been seen following strong rainfall across the Riverina region.

 

** The tropical fruit index includes bananas, mangoes, papaws, passionfruit and pineapples
Source: Australian Bureau of Statistics (ABS), Rural Bank and Ausmarket Consultants.

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