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Insights October 2024

7 October 2024 |Horticulture

Insights October 2024

7 October 2024 |Horticulture

Commodity Overview

  • Cherry picking is due to get underway across New South Wales and South Australia in October. Unfortunately, a significant frost event in mid-September has had a large impact on cherry orchards across key growing regions.
  • The fallout from the detection of tomato brown rugose fruit virus in South Australia has continued. Shortages should be minimal assuming quarantines aren’t expanded further.

Fruit

Mango harvest has continued to advance across the Northern Territory. Although current trays being sent to market lags last year. Darwin is now forecast to produce 2.14 million trays (7kg) of mangoes this season, down from 2.4 million trays forecasts last month. However, this is still up on last season’s 2.1 million trays. Katherine output is forecast at 2.06 million trays well up on last season’s 1.3 million trays. The 359,000 trays that have been sent to market as of publication are well behind last season’s 418,000 trays over the same period. The increased supply coming to market has seen prices ease. Wholesale prices of Kensington Pride mangoes out of the Northern Territory declined 27.2 per cent to $5.42/kg in September. From an export perspective the UAE, New Zealand and Singapore will remain the major export markets. Growers will also benefit from the expanded varietal access into Japan that was announced at the end of 2023.

A graph showing indexed prices for Kensington Price Mangoes out of the Northern Territory which are broadly in line with last season.
Source: Ausmarket Consultants

Cherry picking is due to get underway across New South Wales and South Australia in October. Victoria will see their season kick off in November. Tasmania is on track for a late December start. Unfortunately, a significant frost event in mid-September has had a substantial impact upon cherry orchards across key growing regions as shown in the images below. Cherry producers around Orange noted that fruit has been severely damaged due to frost. Damage is also likely across Young, and the Adelaide Hills. The key Tasmania production region of the Huon Valley (where the blossoming period was just starting) will likely see some yield reduction with lower temperatures there potentially affecting flowering and bee activity. The USDA forecast cherry production at 20,000 tonnes earlier this season, up from the estimate of 18,500 tonnes for the 2023/24 crop. The frost event will now see production come in closer to last season. Marketability of fruit may also be poor, impacting export demand. Higher prices for producers that weren’t impacted by frosts are expected as a result. Stonefruit yields across southeastern Australia are also likely to have been impacted to some degree.

An image of the lowest minimum temperature for the week ending the 21st of September.
Source BOM & USDA
An image showing the major cherry production regions of Australia.

Vegetables

AUSVEG have released their latest Industry Sentiment Report. High input costs, poor farmgate returns, workforce shortages, industrial relations changes, lack of funds to invest in innovation, and compliance were some of the key issues identified by growers in the report.  Favourable weather conditions and fewer supply chain disruptions over the last 12 months have ensured strong volumes are available to market. However, grower margins remain tight. As a result, 34 per cent of vegetable growers indicated they are considering exiting the sector. This could see higher prices at a retail level over the longer term. Solutions to these issues were detailed in the report. These included improving seasonal workforce policy and lifting domestic vegetable consumption (currently just 1.8 serves per day).

Tasmania has seen strong vegetable production so far this season. Yields were supported by a dry autumn which enabled efficient harvest and minimal disease impact. Irrigation has helped to aid those areas that have continued to experience dry weather throughout winter and spring. Meanwhile, the fallout from the detection of tomato brown rugose fruit virus in Adelaide (Australia's first known instances of the virus) has continued. The virus primarily impacts nightshade vegetables. State embargoes on importing tomatoes from South Australia have expanded, led by Western Australia. Globally both New Caledonia and New Zealand have placed export restrictions on South Australian tomatoes, capsicums, and chillies. Tomato shortages should be minimal assuming quarantines across South Australia aren’t expanded further. Current wholesale prices for tomatoes out of both Queensland and South Australia remain broadly in-line with last September.

A graph showing indexed prices for nightshade vegetable prices which are slightly below average at present.
Sources: Ausmarket Consultants, Rural Bank

*Nightshade vegetable index includes tomatoes, capsicums, chillies and eggplant.

Nuts

Almond production estimates for the 2024 crop have been reduced from 164,700 tonnes to 153,550 tonnes by the Almond Board of Australia. Reduced yields from older trees were the primary reason for this revision. Regardless, the industry is having a fantastic start to the 2024/25 marketing year (Mar-Feb). Domestic sales have seen a 22 per cent increase in July. This is a slight one per cent rise across the season. July saw Australian almond exports surge by 35.3 per cent year-on-year, reaching 20,139 mt thanks to strong demand from China. This export total is a new record for the month of July. Strong export volumes are expected continue following the lift in production volumes observed this season.

This article is intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). The information herein is believed to be reliable and has been obtained from public sources believed to be reliable. Rural Bank, a Division of Bendigo and Adelaide Bank Limited, ABN 11 068 049 178 AFSL/Australian Credit Licence 237879, makes no representation as to or accepts any responsibility for the accuracy or completeness of information contained in this report. Any opinions, estimates and projections in this report do not necessarily reflect the opinions of Rural Bank and are subject to change without notice. Rural Bank has no obligation to update, modify or amend this article or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth therein, changes or subsequently becomes inaccurate. This article is provided for informational purposes only. The information contained in this article does not take into account your personal circumstances and should not be relied upon without consulting your legal, financial, tax or other appropriate professional.

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