Rural Bank predicts weather and inputs to hinder horticulture's boyuant production

Rural Bank's Australian Agriculture Outlook 2023 delivered a generally stable assessment of horticulture's future for this year, with fruit and vegetable prices forecast to remain well above average across most varieties.

However, strong production will see prices ease from recent highs as the year progresses, it said.

The report predicts improved export market access will hold horticultural exports in good stead, with vegetable producers expecting some short-term supply shortfalls following a challenging spring and summer planting period that was heavily impacted by flooding and rainfall events.

RURAL Bank highlighted potatoes in particular, saying they had been negatively impacted by flooding and heavy rainfall on the east coast.

"Potato crops throughout Tasmania have seen the largest impact with growers throughout Victoria and New South Wales also affected," the report said.

"This will see lower production volumes into autumn which, when paired with ongoing supply chain challenges, will elevate potato prices."

THE outlook for vegetables is further tempered by a reduction in domestic demand, according to Rural Bank.

This will be due to negative consumer sentiment and rising cost of living pressures drive a reduction in demand for higher priced fresh vegetables with consumers expected to utilise cheaper alternatives such as frozen vegetables as a substitute.

"The poor summer planting period will keep prices elevated into early 2023, though prices will ease as supply chains return to normal with lower consumer demand expected to add further pressure to prices," it said.

"While prices are forecast to soften, high production costs will keep vegetable prices above long-term averages."

ANOTHER generally high achiever in horticulture exports, table grapes, were given a positive appraisal with predictions production will significantly increase this season.

Rural Bank said table grape exports to Vietnam were expected to continue to grow, while the industry was also anticipating a rebound in export volumes to China despite the restrictive "COVID Zero" policy which remains in place.

"The likelihood of above average rainfall across key production regions including Sunraysia and southern New South Wales early in the year poses a risk to quality thanks to humid conditions," it said.

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"Increased output is being driven by the maturation of recent vine plantings and low irrigation costs with favourable weather also assisting yields.

"The USDA are forecasting a crop in the region of 210,000mt. This compares to an approximate harvest of 180,000 mt last season.

"This increased supply will pressure domestic table grape prices with wholesale prices of White Menindee expected to move back to $2.75/kg with Dark Crimson grapes expected to sit around $2.50/kg."

RURAL Bank said the apple and pear supply out of major production regions in Victoria was likely to be limited during the first few months of 2023 following damaging weather events throughout key production regions including Goulburn Valley and Shepparton.

"The regions impacted typically grow over 30 per cent of Australia's apple supply and 80 per cent of Australia's pears," the report said.

"Wholesale prices across both major apple and pear varieties are currently sitting below three-year averages, these are expected to spike and remain elevated into 2023 as a result."

The widespread rainfall experienced should have benefits for growers through low irrigation costs that in turn will drive strong fruit production volumes in the first half of 2023.

"Though recent damaging weather events throughout Victoria will keep volumes of certain seasonal varieties constrained, with quality also expected to be an issue into early 2023," Rural Bank said.

"Fruit prices are widely forecast to ease from recent highs, though they will remain above long-term averages with high input costs and a tight labour market continuing to squeeze grower margins."

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