Australian Horticulture Annual Review 2018 - Rural Bank
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Australian Horticulture Annual Review 2018
About the research About Rural Bank
The Australian Horticulture Annual Review includes data and Rural Bank has been a wholly-owned subsidiary of Bendigo and
outlooks on production in Australia, seasonal conditions, prices Adelaide Bank Limited since 2010. It is the only Australian-owned
and demand. Significant effort has been taken to secure the most and operated dedicated agribusiness bank in the country, providing
recent data available. exceptional financial services, knowledge and leadership for
Australian farmers to grow.
About Ag Answers
Ag Answers is a specialist insights division of Rural Bank.
Recognising that good information is the key to making good
business decisions, Ag Answers provides research and analysis
into commodities, farmland values, farm business performance
and topical agricultural issues to enable farmers to make
informed decisions.
This report 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 Limited, ABN 74 083 938
416 AFSL / Australian Credit Licence 238042 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 report 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 report is provided for informational purposes only. The information
contained in this report does not take into account your personal circumstances and should not be relied upon without consulting your legal, financial, tax or
other appropriate professional.
© Copyright Rural Bank Ltd ABN 74 083 938 416 and Bendigo and Adelaide Bank Ltd ABN 11 068 049 178 (RBL18874) (02/18)
2
Summary
The Australian Bureau of Statistics The Australian Bureau of Statistics The value of table grape
fruit price index is expected vegetable price index is expected exports to China increased
46
to increase by up to to increase by
%
10 in 2018
%
7 in 2018
%
in 2017
Average avocado Australian wine exports to The value of almond
price increased China could reach exports to India increased by
78 in 2017
%
$1 in 2018
B
27 in 2017
%
Most of Australia’s horticulture industries recorded an increase Wine production increased again in 2016/17 with demand growing
in production in 2017. An early spring in Queensland and optimal strongly as a result of the China-Australia Free Trade Agreement.
growing conditions in Western Australia saw an overlap of growing China has the potential to surpass $1 billion in wine imports from
seasons for spring harvested fruit and vegetables. This put prices Australia in 2018. Table grapes are also benefitting from growing
under pressure for a number of fruit and vegetable categories. Chinese demand with average export price per kilogram rising every
Despite these exceptional seasonal conditions, most fruit and year since 2012.
vegetables prices are expected to increase in 2018.
Horticulture Innovation Australia will focus research and
Growing demand from India for Australian almonds looks set to development on growing exports of fruit and vegetables between
continue in 2018. Price appears stable and demand could increase now and 2021. Avocados, oranges, mandarins and bananas
with India seemingly happy not to utilise their stock pile to satisfy are fruits to watch in 2018 as demand grows along with supply.
domestic consumption, instead relying on imports. Macadamia Vegetables such as broccoli, celery, lettuce, carrots and mushrooms
exports continue to grow as a result of demand from China and all stand to benefit from growing export markets in 2018.
Vietnam. The export price per kilogram has almost doubled since
2012 and should continue positive growth in 2018.
3
Fruit - Outlook
The weighted average fruit price index for all capital cities in Australia The outlook for mandarins in terms of price, demand and supply
is expecting moderate growth of between two and 10 per cent looks positive. Significant growth in exports to China (+187%) and
in 2018. Domestic fruit consumption is growing, combined with Japan (+66%) in 2017 is boosting the industry. Unlike other fruit
increasing export exposure which will likely lead to more demand for categories that tend to see growth in demand for export or from the
fruit in 2018, which could have a positive impact on price. domestic market, mandarins have both. Something to consider is
how the growth of 2017 can be replicated in 2018, given the growth
Fruit categories to watch in 2018 will be avocados, oranges,
in the market is relatively new. The months to watch will be from July
mandarins and bananas. Avocado production has increased
to September.
significantly in the last decade. Plantings have gone from 2,640
hectares in 2011 to around 3,848 hectares in 2016. Production is The banana industry has potential to benefit from solid domestic
expected to increase again in 2018 as the yield of younger trees demand and an emerging export market to Japan. Bananas are
increases. Popularity domestically has grown as a result of marketing one of the most popular fruits domestically with 96 per cent of
and the café culture of Australians which is spreading across every households buying them regularly. Supply is growing so it would be
age demographic. The average wholesale price for avocados at the beneficial for the industry to diversify markets where possible. Over
Brisbane market increased by 78 per cent in 2017 compared to 2016. the past 12 months, Japan imported 82 tonnes of fresh bananas,
December 2017 prices were 17 per cent higher than December which is up from 18 tonnes in 2016. There was no real pattern to
2016. Horticulture Innovation Australia is funding a research and monthly exports aside from October – December being slightly
development program for avocados which is forecast to increase the higher on volume. If the banana industry can replicate the success of
value of the industry by as much as $212 million and could see the mandarin industry in the Japanese market demand could grow
10 per cent of production being exported by 2021. quickly. Risks to consider in 2018 include cyclones early in the year
and the spread of Panama TR4 which is present in north Queensland
Navel oranges are increasingly being exported to China and Japan.
and does kill banana plants. Research into resistant banana varieties
China has now overtaken Japan as Australia’s largest market for
will be important to mitigate the risk of the Panama TR4 disease.
oranges. Fresh orange exports to China increased 59 per cent in
2017 compared to 2016. Plantings are growing, but are constrained Horticulture Innovation Australia will invest over $10M on trade
by the time it takes nurseries to grow new trees. This could be activities during 2018. It is a timely announcement from the industry
beneficial for preserving price especially if demand continues to grow. body as production particularly in the fruit industry continues to grow.
In November 2017, China recognised South Australia as being fruit fly Commodities likely to benefit most from an export boost include
free, which could benefit exports in 2018. avocados, cherries and strawberries.
Australian fruit price index and 2018 forecast
130
120
110
100
90
2011/12 = 100
80
70
60
95% confidence level
50
68% confidence level
0
Mar -13
May -13
Jul -13
Sep -13
Nov -13
Jan -14
Mar -14
May -14
Jul -14
Sep -14
Nov -14
Jan -15
Mar -15
May -15
Jul -15
Sep -15
Nov -15
Jan -16
Mar -16
May -16
Jul -16
Sep -16
Nov -16
Jan -17
Mar -17
May -17
Jul -17
Sep -17
Nov -17
Jan -18
Mar -18
May -18
Jul -18
Sep -18
Nov -18
Source: ABS
4
Fruit - Production
Looking back on 2017, it was a year of mixed results for horticulture tonnes. Production also increased around Atherton (+107 per cent),
producers. Production in Queensland was reduced early in the Babinda (+62 per cent) and Innisfail (+26 per cent).
year due to cyclone Debbie. The impact was not as severe as first
Australian orange production has increased 17 per cent since 2014.
thought aside from the long-term damage to some tree crops such as
Demand for fresh navel oranges both domestically and for export has
mangoes. Temperatures over winter were mild, with average to above
encouraged growers away from the juicing variety Valencia to Navel
average for the eastern states. Moisture was adequate resulting in
oranges. NSW produces over 50 per cent of Australia’s oranges
the onset of an early spring particularly in New South Wales and
with a mix of both major varieties. The area around Griffith produces
Queensland. Production increased across many varieties during this
around 57 per cent of the state’s oranges. Production in the Griffith
period. Bananas, blueberries and strawberries all recorded increases
area increased 24 per cent in 2016. Victoria and South Australia
in production.
account for most of Australia’s exports at 44 per cent and 40 per
Historically fruit production has increased at an average of three cent of the national total respectively. Late in 2017, China declared
per cent each year since 2012/13. The latest figures from the South Australia fruit fly free, which could see exports increase and
Australian Bureau of Statistics (ABS), albeit current only to 2015/16 provide incentive for SA fruit growers to expand production.
show that olive production increased 55 per cent, bananas 43 per
Strawberry production has been boosted by way of increased
cent, avocados 39 per cent, mandarins 24 per cent, cherries 22 per
planting and improved yield through genetic improvement. This
cent, oranges 19 per cent, mangoes 12 per cent, grapes eight per
growth has more than satisfied the domestic market and exports of
cent, strawberries seven per cent, peaches seven per cent, and apples
fresh strawberries have recorded very strong growth in recent years.
five per cent. Nectarine and pineapple production declined one and
Exports have grown from 728 tonnes in 2010 to 4,197 tonnes in
two per cent respectively.
2017. Western Australia accounts for 84 per cent of fresh strawberry
Avocado production has increased in the last decade particularly exports from Australia.
around Bundaberg (13,828 tonnes in 2016) and Atherton (8,216
The sustainability of the current level of strawberry production is an
tonnes in 2016) in Queensland. Queensland avocado plantings have
issue. Key metrics to keep an eye on in 2018 will be the growth in
risen from 2,640 hectares in 2011 to over 3,800 hectares in 2016.
fresh exports and the stabilisation of domestic price as an indicator
Production is expected to increase again in 2018 as the yield from
of whether or not consumption increases. Around 75 per cent of total
younger trees increases. Average yield increased 22 per cent in 2016
expenditure on strawberries comes from one third of the population.
to 8.35 tonnes per hectare.
Consumers purchase on average 3.62kg per year. Horticulture
Banana production increased significantly in 2016. Over 94 per cent Innovation Australia is expected to invest in growing domestic
of Australia’s bananas come from north Queensland, primarily Tully consumption.
where production increased by 42 per cent in 2016 to 163,966
5
Fruit - Price
Average avocado The ABS fruit price index is Fresh navel orange export
price increased forecast to increase by as much as prices increased
78 in 2017
%
10 in 2018
%
19 in 2017
%
Domestic market prices varied across fruit categories in 2017. Some Mango prices have decreased significantly this season which runs
popular fruits recorded gains in average price while others that came from December to February. Average price for Queensland mangoes
under pressure from supply recorded decreases. sold in the Brisbane market are 20 per cent below the 2016/17
season average. The December 2017 average price of $14.63/8
Avocado prices continued to rise in 2017 despite increased kg carton is down 32.7 per cent compared to December 2016. A
production. The average price for Hass avocados produced in long growing season has produced an overlap of supply between
Queensland and sold in Brisbane increased by 78 per cent from Far North Queensland and the Burdekin region resulting in an
$3.06/kg in 2016 to $5.46/kg in 2017. Western Australian produced oversupplied market since November. Northern Territory mango prices
Hass avocados sold in Melbourne have also experienced an increase weren’t much better in the Brisbane or Sydney market. Price is more
in price. During the 2016/17 peak season, the average price was stable in the Melbourne market where NT produced mangoes are
$4.25/kg. The current 2017/18 season is up 26 per cent, averaging selling for an average of $21.39/8kg carton, down seven per cent
$5.37/kg. compared to December 2017.
Banana prices increased slightly during 2017, averaging $2.23/kg
sold as a 13kg carton in the Melbourne market, an increase of 9.9 per
cent. The price at February 2018 is $2.44/kg which is 15.6 per cent
above the long-term average.
Navel oranges have eased this season compared to 2016. The price
for a 15kg carton at the Sydney market during the 2016/17 season
averaged $20.30 or $1.35/kg. The current 2017 season is averaging
$19.09 or $1.27/kg which is a decrease of 5.9 per cent. Fresh navel
orange export prices were 19 per cent higher in 2017. Average price
per kilogram in 2016 was $1.36 and $1.61 in 2017. This increase was
largely driven by demand from China between February and April,
which pushed prices as high as $2.46/kg.
Queensland imperial mandarin prices increased 12 per cent in 2017.
In the Sydney market, Queensland produced mandarins sold for an
average of $1.35/kg in 2017 compared to $1.21/kg in 2016. Export
price also increased by 12 per cent in 2017 compared to 2016.
Average price per kilogram was $2.15 in 2017 up from $1.91 in 2016.
Queensland strawberry prices began the 2017 season 23.6 per cent
higher than 2016 averaging $2.72/250g punnet. Early spring weather
resulted in increased production and average price began to fall. In
the second half of the 2017 season average price was only 3.5 per
cent higher than 2016 at $0.89/250g. The minimum monthly price
fell to $0.65/250g compared to $0.78/250g in 2016.
New South Wales blueberries dominate local markets in terms of
supply. Average monthly price at the Sydney market got as high as
$4.52/125g punnet in June 2017 which is the traditional peak in
price due to seasonal low supply. The 2017 season produced lower
prices compared to 2016, average price was down one per cent to
$2.58/125g punnet. Increased local supply has put pressure on
prices since September. Blueberries are imported into Australia to
supplement demand with around 18 per cent of total supply imported
in 2015/16.
6
Fruit - Price table
CATEGORY LATEST ONE YEAR AGO 2 YEAR 80TH 20TH
AVERAGE PERCENTILE PERCENTILE
VICTORIA
Apples 12kg ctn MLB 27.00 32.10 30.94 32.17 27.00
Grapes crimson 10kg ctn MLB 21.31 25.48 29.09 37.50 22.50
Grapes thompson 10kg ctn MLB 25.00 20.13 24.75 28.78 19.99
NEW SOUTH WALES
Apples 5kg tray SYD 20.00 27.60 22.04 22.00 20.00
Blueberries 125g pun SYD 1.55 1.89 2.65 3.41 1.84
Cherries 5kg ctn SYD 42.50 45.00 45.51 49.55 42.50
Oranges 15kg ctn SYD 20.00 18.00 14.39 18.82 10.57
SOUTH AUSTRALIA
Apples 12kg ctn ADL 31.95 35.70 34.51 34.62 31.45
Nectarines 5kg ctn ADL 28.10 24.75 26.58 28.10 22.50
Oranges 3kg bag ADL 3.65 3.00 3.08 3.65 2.43
QUEENSLAND
Avocado Hass 10kg ctn BRS 128.33 90.00 51.78 72.50 24.07
Bananas 13kg ctn MLB 30.08 27.52 29.29 31.57 25.53
Mandarins 9kg ctn SYD 11.73 9.96 13.37 17.25 10.36
Mangoes Calypso 8kg BRS 18.50 26 19.93 24.83 15.70
Mangoes Kensington 10kg BRS 18.76 18.66 17.51 20.26 14.59
Strawberries 250g pun BRS 2.07 1.14 2.06 2.66 1.23
TASMANIA
Apples 18kg ctn SYD 47.50 37.00 37.17 47.50 31.09
Raspberries 125g pun ADL 2.50 4.04 5.73 6.70 4.69
WESTERN AUSTRALIA
Avocado Hass 10kg ctn MLB 107.60 105.75 60.48 75.00 35.00
NORTHERN TERRITORY
Mangoes Kensington 10kg MLB 23.75 20.00 30.28 42.17 21.31
EXPORT PRICES $/KG
Fresh Cherries 13.26 15.61 17.83 21.60 13.33
Fresh Mandarins 2.43 6.72 2.63 2.64 1.69
Fresh Navel Oranges 1.19 1.10 1.47 1.50 1.19
Data: Ausmarket consultants
ctn = carton, pun = punnet
Categories are shown by state of origin and which market
they were sold in, denoted by MLB, SYD, ADL and BRS.
7
Fruit - domestic demand
Domestic consumption of Mandarin consumption In 2016, approximately
53
fresh fruit has increased has increased
%
9 %
since 2014
55 since 2014
%
of Australian households
regularly purchased avocados
Domestic consumption of fresh fruit is up nine per cent since 2014 Domestic fruit consumption trend since 2014
to 70.86 kg per capita. Significant consumption growth occurred
in mandarins up 55 per cent, mangoes 20 per cent, apples 17 60%
per cent, avocados 17 per cent, oranges 12 per cent, blueberries
10 per cent and bananas four per cent. Consumption of fresh 50%
strawberries declined by 8.8 per cent and table grapes consumption
40%
was unchanged.
Mandarin consumption in 2016 was 4.34 kg per capita up from 30%
2.52 kg per capita in 2014. The fruit has been well marketed as a
20%
convenient snack and with a focus on healthy eating in schools and
at home the mandarin has gained popularity. It’s estimated that 61 per 10%
cent of households are purchasing mandarins regularly.
0%
Mango consumption increased from 1.86 kg per capita in 2014
to 2.24 kg per capita in 2016. Around 43 per cent of Australian -10%
households purchased mangos in 2016. This suggests domestic
consumption has room to grow through continued investment -20%
in marketing.
Mandarins
Mangoes
Apples
Avocados
Oranges
Blueberries
Bananas
Strawberries
Table grapes
Apple consumption increased from 7.79 kg per capita in 2014 to 9.12
kg per capita in 2016. Consumption remained unchanged between
2015 and 2016. Domestic consumption will need to keep growing
to meet increasing apple production over the last three years. A
positive for the industry is that around 90 per cent of Australian Source: HIA Fruit Handbook
households purchased fresh apples, making it one of Australia’s most
popular fruits. Methods of consumption are something that can aid avocado demand
Avocado consumption continues to grow assisted by increased domestically. Prepared ready to eat tubes of avocado, dips and as a
marketing. Consumption in 2014 was 2.62 kg per capita and 3.14 breakfast item at cafés all compliment fresh consumption.
kg per capita in 2016. Around 53 per cent of Australian households Fresh orange consumption is also increasing. In 2014, consumption
purchased avocados in 2016. was 5.37 kg per capita, increasing to 6.02 kg per capita in 2016.
Oranges are reasonably popular at the checkout, with 62 per cent of
Australian households purchasing fresh oranges regularly in 2016.
Fresh blueberries face strong competition from alternatives such as
frozen berries which are often cheaper. Fresh blueberry consumption
has grown slightly from 0.30 kg per capita in 2014 to 0.33 kg
per capita in 2016. Around 41 per cent of Australian households
purchased blueberries in 2016.
Banana consumption was 15.73 kg per capita in 2014, increasing to
16.37 kg per capita in 2016. Bananas are a very popular item at the
supermarket with 96 per cent of Australian households purchasing
bananas in 2016. Bananas have been marketed well in the last few
years particularly as ‘nature’s energy bar’, encouraging consumers to
choose bananas over processed energy products.
8
Fruit - export demand
The value of fruit Mandarin exports to Orange exports to
exports increased China increased China increased
17 in 2017
%
187 in 2017
%
54 in 2017
%
Australian fruit exports are estimated to reach $699 million for the Australia’s top five fruit export markets by value
2017 calendar year, up 17 per cent compared to 2016. Major markets
included China (+70 per cent), Japan (+20 per cent), New Zealand $180
(+19 per cent) and Hong Kong (+11 per cent).
$160
The value of exports to China surged in 2017. This was almost
exclusively due to the value of citrus exports increasing by 90 per $140
cent. The value of mandarin exports increased 187 per cent from
$16.4M to $41.1M. The value of fresh orange exports increased $120
54 per cent from $55.8M to $89M. China will remain a key market
$100
for Australian citrus in 2018. The growth in the value of orange and
mandarin exports to China was driven by increases in volume, which $80
indicates depth in Chinese demand.
$60
Exports to Japan have consistently grown in value over the last three
years. In 2017, it was also citrus that led the way. The value of fresh $40
mandarin exports increased 66 per cent from $4.8M to $8M and
fresh orange exports increased 14 per cent from $46.9M to $53.5M. $20
The quantity imported has tracked similarly, indicating that extra
$-
supply in 2017 was welcome and that full demand potential may
China Hong Kong Japan Singapore UAE
not have been met. Australian bananas also entered the Japanese
market in 2017. Exports totalled just $23,000 in 2016 but managed to 2015 2016 2017
grow to $130,000 in 2017. Further growth can be expected in 2018.
Source: GTIS
Citrus exports were largely responsible for the 11 per cent increase
in the value of fruit exports to Hong Kong in 2017. Total citrus
exports increased 30 per cent compared to 2016. The value of fresh
mandarin exports were up 68 per cent to $13.4M and fresh orange
exports were up 14 per cent to $29.6M. Grapefruit exports also
contributed to the increase in value. Up from just $760 in 2016 to
over $700,000 in 2017.
Fruit exports to New Zealand increased in 2017 due to an increase in
citrus exports. Fresh pear exports also increased in 2017, up 32 per
cent to $4.3M. Fresh orange exports increased 11 per cent to $3.8M
and fresh mandarin exports increased 10 per cent to $7.8M. Lemon
and lime exports to New Zealand also increased from a small base in
2017 going from $199,000 to $242,000.
The value of exports to Singapore was down in 2017, largely due to
a decrease in strawberry exports. The value of strawberry exports to
Singapore was down 42 per cent compared to 2016. The quantity
exported reverted back to 2015 levels, meaning market share gained
in 2016 wasn’t retained. This may have been due to lower export
prices offered by Singapore making it less profitable. The average
price was down by 21.6 per cent in 2017 compared to 2016. In 2016
average price per kg was $6.98, in 2017 it was $5.47.
9
Vegetables - Outlook
Most vegetable categories are expected to return to long term growing. Early reports suggest production was down in 2017 which
average prices in 2018. During 2017, a number of factors such as is possibly why most key markets recorded a drop in value but an
warmer conditions, adequate rainfall and overlapping seasons led increase in price per kilogram. This suggests that there is room for
to a price fall across many categories. If 2018 is a more traditional production growth in 2018 which should result in a higher value for
season the vegetable price index should recover the declines of 2017. exports. The key market will be Japan.
Positive outlooks will come primarily from vegetables with a stable
The tomato industry is almost entirely reliant on domestic
local consumption level and a growing export market.
consumption. Domestic consumption is growing, something that has
Broccoli is a vegetable that is enjoying growing domestic promoted production growth, however, in spring 2017, the market
consumption, increasing prices and a growing export market. These came under pressure from oversupply. This scenario could become
are three reasons why broccoli production is likely to increase in more frequent as tomato production has grown significantly since
2018. The second half of the calendar year will be the time to look 2012. This creates a risk for the future, the key will be what happens
for signs of growth in demand from Singapore. If the monthly value of this spring, because either side of spring price generally returns to its
exports continues to rise it will indicate that demand is still growing in long-term average.
this important market. The mushroom industry could improve in 2018 and beyond if
The lettuce industry has achieved stable domestic consumption declining domestic consumption can be improved. Australia is a net
which could provide a platform to grow export markets. Price risk is importer of mushrooms which indicates there is room in the market
diversified if both markets can work together. Average domestic price for local production increases. Another positive sign is a growing
increased when comparing the 2017 selling season to 2016. export market in Japan. There was some price growth on the
domestic market in 2017 which could be a sign of increasing demand.
Celery production could be set to increase further, as exports to
Malaysia and Singapore continue to grow. Domestic consumption The potato industry has endured a challenging period. Domestic
is flat and price has been stable in 2017, so any incentive to grow consumption continues to decline, despite the popularity of potatoes
production will come from the export market. which is high at 88 per cent of Australian households regularly
purchasing potatoes. This could indicate that Australians are still
Last year was an exceptional year for carrot production. Seasons eating potatoes but there is now more variety on their plate which
overlapped and ideal growing conditions in WA and in eastern states is resulting in less potato consumption per capita. Popularity is
caused the usually stable domestic price to decline. The decline important, and if per capita consumption is to increase, potatoes need
in price in 2017 indicates a domestic market which is mature and a new image. They are popular enough that people would eat more of
doesn’t have a lot of depth to support increased production. If 2018 them if they were reminded of their health benefits. A positive for the
returns to a more traditional season, price should return to the long industry is that exports are growing in the South Korean and Hong
term average. The carrot industry will look to build export markets for Kong markets. These market offer significant potential particularly
growth, particularly to the UAE. South Korea where export value grew 74 per cent in 2017.
The outlook for asparagus is good despite declining consumption Horticulture Innovation Australia has a significant goal of increasing
domestically. Asparagus production is split 54 per cent for export and the value of vegetable exports by 40 per cent by 2020. This is
46 per cent for domestic consumption. This reduces the industry’s expected to come from a range of categories but the focus for
reliance on any one sales channel. Domestic price declined in 2017 2018 will be more on getting farms export ready and increasing the
while exports increased. This is a reflection of where demand is efficiency of the supply chain.
Vegetable price index and 2018 forecast Source: ABS
140
130
120
110
100
90
95% confidence level
80 68% confidence level
0
Mar -13
Jun -13
Sep -13
Dec -13
Mar -14
Jun -14
Sep -14
Dec -14
Mar -15
Jun -15
Sep -15
Dec -15
Mar -16
Jun -16
Sep -16
Dec -16
Mar -17
Jun -17
Sep -17
Dec -17
Mar -18
Jun -18
Sep -18
Dec -18
10Vegetables - Production
Vegetable growing conditions in 2017 were characterised by a mild seems to have plateaued). The top three producing states South
winter and adequate moisture resulting in the onset of an early spring Australia, Tasmania and Victoria have all recorded declines since
particularly in New South Wales and Queensland. As a result, some 2012. However Victoria reported growth in production of 10 per
vegetable categories became more readily available than normal. cent in 2016 and South Australia grew by 1.8 per cent. The industry
Supply was very strong for vegetables such as Asian greens, beans, is more mature than most and demand has decreased since 2014
beetroot, broccoli, carrots, leek, zucchini, sweet potato, lettuce and
despite how much of a staple potatoes are with 88 per cent of
tomatoes, putting pressure on prices mid-way through the year.
households purchasing them in 2016.
Fresh capsicum production in Australia fell 16 per cent in 2015/16.
The major growing areas around Bowen and Bundaberg have Asparagus production is largely being driven by demand from Japan.
seen production decline over the last five years. Production in the Production has increased by 22 per cent since 2014. Koo Wee Rup
Bowen region has averaged a seven per cent decline since 2011 in Victoria is a major growing region producing around 90 per cent
and Bundaberg has averaged an 11 per cent decline for the same of Australia’s 7,576 tonnes of asparagus. The 2017 season did start
period. Due to the seasonal nature of capsicums there is a relatively off slowly due to some colder than usual nights at the beginning
short window of three months between January and March where of spring.
production peaks. Increasing supply can be difficult due to a high
cost of production and the potential for the market to become Carrot production has been increasing since 2014, averaging 11 per
oversupplied. Growing capsicums indoors is supplementing off peak cent growth per year. Since 2014 South Australia production is up 114
supply demands as is importing capsicums from New Zealand. per cent, Queensland 59 per cent and Victoria 46 per cent. Growth in
export demand is driving the increase in demand. Domestic demand
Victoria accounts for 67 per cent of Australia’s tomato production.
has declined slightly since 2014. The volume of carrots produced in
Growth in production has averaged 36 per cent year on year since
2017 was particularly large due to exceptional growing conditions in
2012. The region around Rushworth accounted for 46 per cent
of Victoria’s tomato production in 2016, increasing 21 per cent Western Australia and Queensland.
compared to 2015. Production also increased in the Loddon region Broccoli production has increased 12 per cent since 2012. Almost
which grew 50 per cent in 2016. half of Australia’s broccoli comes from Victoria where production has
Potato production has slowly declined over the last five years, plateaued in recent years. The industry is growing in Queensland
averaging a decrease of 2.4 per cent per year (although this decline where production has increased by 54 per cent since 2012.
11Vegetables - Price
The ABS vegetable price index is Average capsicum Average broccoli
forecast to increase price decreased price increased
7 %
in 2018
26 in 2017
%
8 %
in 2017
Vegetable prices were lower in 2017 due to exceptional growing sold in Sydney averaged $24.30/ 15kg carton, which is 30 per cent
conditions. The weighted average price index for vegetables dipped lower than the 2016 average largely due to fewer supply disruptions.
sharply in the September quarter of 2017. Vegetable prices are Weather events in mid to late 2016 restricted supply in southern
expected to increase slightly by around 1.6 per cent during the Australia as a result potato prices increased sharply early in 2017.
March quarter of 2018, and then by around 5.6 per cent across the
Victorian produced asparagus sold in the Melbourne market for an
remaining quarters of 2018. This would result in vegetable prices
average of $36.75/ 7kg carton across the 2016/17 season. Part way
returning to a level similar to that of the June 2017 quarter before the
through the 2017/18 season prices have eased by 11.8 per cent to
early spring weather increased supply.
$32.42/ 7kg carton. Export prices were higher in 2017 averaging
Capsicum prices trended lower in 2017 due to increased supply. $10.49/kg up 13.3 per cent compared to 2016.
Queensland capsicums sold at the Brisbane market were 17.9
Carrot prices came under pressure in 2017 with excellent growing
per cent lower in December 2017 compared to 2016. The peak
conditions in Western Australia and in eastern states. West Australian
production season is now underway and will run to the end of March.
grown carrots sold in the Melbourne market are generally consistent
The average price during 2017 was $16.94/ 8kg carton -26 per cent
at around $19-21/ 15kg carton however price decreased at the
compared to $22.90 in 2016.
beginning of spring to $14.75/ 15kg carton. The average price
Tomato prices were influenced by higher spring production after the for a 15kg carton in 2016 was $21.19, the average price for 2017
price peaked in winter. The current price has come back to the two was $17.86 a decline of -15.7 per cent. The export price for carrots
year average. Queensland tomatoes sold in the Brisbane market averaged $0.79/kg in 2017 which is an increase of 5.2 per cent
averaged $15.24/10kg carton during spring 2017, a decrease of 34 compared to 2016.
per cent compared to the same period in 2016. Victorian tomatoes
Average broccoli prices increased eight per cent in 2017 for
came under similar pressure in spring dipping to $8.02/10kg carton.
broccoli produced in Victoria and sold in Melbourne. Prices
Gourmet Kipfler potatoes grown in Tasmania and sold in the Sydney averaged $17.64/8kg carton compared to $16.37 in 2016. Current
market averaged $35.34/10 kg bag in 2017, 2.5 per cent below the price is 20.4 per cent higher than this time last year. Export prices
2016 average. Washed white potatoes grown in South Australia and remained flat at $2.95/kg.
12Vegetables - Price table
CATEGORY LATEST ONE YEAR AGO 2 YEAR 80TH 20TH
AVERAGE PERCENTILE PERCENTILE
VICTORIA
Asparagus 7kg ctn MLB 47.24 42.59 34.89 42.59 25.00
Broccoli 9kg ctn MLB 19.29 16.40 17.13 21.07 12.33
Cauliflower 25kg ctn MLB 27.48 21.00 23.39 27.43 16.28
Celery 15kg ctn SYD 13.33 13.30 16.19 18.10 13.00
Lettuce 12kg ctn MLB 14.24 11.85 18.28 26.54 11.85
Mushrooms kg MLB 5.88 6.48 6.69 7.67 5.20
Tomatoes 10kg ctn SYD 22.12 20.38 22.86 33.28 13.92
NEW SOUTH WALES
Mushrooms kg SYD 6.70 5.79 6.79 7.27 6.25
Pumpkin kg SYD 0.57 0.70 0.64 0.89 0.43
SOUTH AUSTRALIA
Carrots 15kg ctn ADL 23.00 41.38 21.71 22.00 21.30
Onions 20kg bag ADL 12.25 24.41 16.73 21.45 12.69
Potatoes 15kg ctn SYD 29.50 24.41 26.77 29.50 21.50
QUEENSLAND
Capsicum 8kg ctn BRS 19.83 21.91 19.34 23.63 12.93
Cauliflower 25kg ctn BRS 23.50 17.21 19.84 23.54 14.27
Pumpkin 20kg ctn BRS 25.90 20.70 25.80 28.52 20.90
Sweet potatoes 18kg ctn BRS 14.29 32.61 23.63 31.69 15.86
Tomatoes 10kg ctn BRS 25.29 28.35 25.24 28.58 19.82
TASMANIA
Onions 20kg bag MLD 13.90 14.00 12.66 14.00 11.00
Potatoes 10kg bag SYD 25.00 6.80 35.72 46.28 23.80
WESTERN AUSTRALIA
Carrots 15kg ctn MLB 16.93 20.60 19.20 22.00 16.94
Lettuce 12kg ctn ADL 17.00 16.00 18.66 24.44 14.35
EXPORT PRICES $/KG
Fresh Asparagus 8.48 8.75 9.74 11.92 6.71
Fresh Carrots 0.87 0.89 0.88 0.89 0.86
Fresh cauliflower and broccoli 3.51 3.09 2.97 3.40 2.61
Fresh Celery 1.61 1.42 1.61 1.71 1.52
Fresh Lettuce 7.58 6.85 6.37 7.17 5.63
Data: Ausmarket consultants
ctn = carton, pun = punnet
Categories are shown by state of origin and which market
they were sold in, denoted by MLB, SYD, ADL and BRS.
13Vegetables - domestic demand
Tomato consumption Potato consumption Domestic per capita consumption
has increased by has decreased by of fresh vegetables was
6 %
since 2014
4 %
since 2014
87
kilograms in 2016
Domestic fresh vegetable consumption has plateaued in the last Domestic vegetable trend since 2014
three years. Consumption per capita in 2016 was 87kg, with 99 per
cent of Australian households regularly purchasing vegetables. 8%
Fresh domestic tomato consumption has increased six per cent since 6%
2014. Per capita consumption was 10.25 kg in 2016 with 86 per cent
of Australian households purchasing tomatoes. 4%
Broccoli consumption has increased by 4.3 per cent since 2014. Per 2%
capita consumption was 2.6 kg in 2016 and 69 per cent of Australian
households purchased fresh broccoli regularly. This would indicate 0%
there is room for growth in domestic consumption as 69 per cent isn’t
as high as other staple vegetables. It would appear that broccoli has -2%
both a strong export market and a growing domestic market.
-4%
Sweet potato consumption has increased slightly since 2014 at 1.3
per cent growth. Per capita consumption was 2.3 kg in 2016. Around -6%
65 per cent of Australian households purchased sweet potato in
-8%
2016, this number indicates there could be room for growth on the
domestic market through specific marketing activities.
Tomatoes
Broccoli
Sweet potato
Capsicum
Lettuce
Carrots
Pumpkin
Potatoes
Asparagus
Capsicums are a seasonal vegetable in Australia with imports filling
the off season demand. Domestic consumption has grown one
per cent since 2014. Per capita consumption in 2016 was 2.88
kg. Around 66 per cent of Australian households purchased fresh
Source: HIA Vegetable handbook
capsicum regularly in 2016.
Fresh head lettuce consumption has grown one per cent since 2014. Domestic potato consumption has decreased by four per cent since
Per capita consumption was 5.19 kg in 2016 and 69 per cent of 2014. Potatoes are one of the most consumed vegetables in Australia
Australian households purchased head lettuce regularly. at 18.79 kg per capita in 2016. Around 88 per cent of Australian
households regularly purchase potatoes. Potato consumption has
Domestic fresh carrot consumption has declined by two per cent
been in decline for a number of years. Possible reasons for this
since 2014. Per capita consumption has slipped to 7.95 kg with
decline is the carbohydrate dense perception of potatoes and the
91 per cent of Australian households purchasing carrots regularly.
freedom of substitution consumers have when buying vegetables.
Carrots are a popular vegetable in Australian shopping trolleys and
demand is unlikely to waver too much. Growth in the carrot industry is Fresh asparagus consumption has decreased by six per cent since
being driven more by exports than domestic markets. 2014. Per capita consumption was 0.3 kg in 2016 with just 30 per
cent of Australian households purchasing asparagus regularly. The
Fresh pumpkin consumption has decreased by three per cent since
asparagus market is more reliant on exports with 54 per cent of
2014. Per capita consumption was 4.58 kg in 2016 and just 60 per
production being exported in 2016.
cent of Australian households purchased fresh pumpkin regularly.
This figure is fairly low for a staple vegetable and indicates there
could be room for growth through better marketing.
14Vegetables - export demand
The value of vegetable Cauliflower and broccoli Carrot exports to the
exports increased by exports to Singapore increased UAE increased
1 %
in 2017
27 in 2017
%
12 in 2017
%
The value of vegetable exports in 2017 increased by one per cent to Australia’s top five vegetable export markets by value
$251.6M. This modest growth in value follows a 24 per cent increase
in 2016 with exports growing $51M since 2015. $60
Singapore remains Australia’s largest market for fresh vegetable
exports recording a value of $48.3M in 2017, an increase of 10 per $50
cent. Australia primarily exports cauliflower and broccoli heads as
well as carrots to Singapore. Cauliflower and broccoli head exports
accounted for approximately 27 per cent of the value of vegetable $40
exports to Singapore in 2017. Carrot exports increased five per cent
in 2017 to $12.3M. The value of celery exports increased 58 per cent
$30
in 2017 and has more than doubled since 2015. Pumpkin exports
increased 25 per cent after a decline in 2016. Asparagus exports
eased eight per cent in 2017. While lettuce exports increased 48 per $20
cent and have nearly doubled since 2015.
The United Arab Emirates is Australia’s largest market for fresh $10
carrots. The value of carrot exports increased 12 per cent to $28.7M.
The quantity of carrots exported to the UAE has almost doubled since
$-
2012 at approximately 33,000 tonnes in 2017. The total value of India China Vietnam Spain Japan
vegetable exports to the UAE increased by 12 per cent in 2017.
The value of vegetable exports to Japan eased four per cent in 2017. 2015 2016 2017
Japan is the largest importer of Australian asparagus, exports totalled
Source: GTIS
$21.6M in 2017, down seven per cent. Fresh asparagus exports have
achieved 14 per cent growth since 2015. Japan is also a growing
An emerging market for fresh vegetables is South Korea. The value
market for fresh mushroom exports, which were up 20 per cent in
of this market has increased 64 per cent since 2015. Fresh potatoes
2017 to $0.9M. Mushroom exports have almost doubled since 2015.
are the major vegetable export along with asparagus. Potato exports
The value of fresh vegetable exports to Malaysia decreased by 12 are up 74 per cent since 2015 totalling $12M in 2017 and asparagus
per cent in 2017. This was largely due to a reduction in onion exports, exports are up 44 per cent since 2015 totalling $0.8M.
down by 78 per cent compared to 2016. It appears that demand for
onions in Malaysia has decreased significantly, something that could
be price related due to India putting a minimum price per tonne on
onion exports which resulted in an increase in the price of onions in
Malaysia. Australian export prices for onions increased in 2017. Fresh
carrots are the main export vegetable in the Malaysian market, value
increased two per cent in 2017 to $12M.
In 2017 the value of vegetable exports to Hong Kong increased by 11
per cent to $15.8M. This follows a 59 per cent increase in 2016. The
growth in 2017 came from cauliflower and broccoli heads up by 46
per cent to $1M, head lettuce exports up 25 per cent to $2.5M and
potato exports up by four per cent to $2M. Other major vegetables
which are established in the Hong Kong market are asparagus which
has nearly doubled since 2015 and carrots which have grown 28 per
cent since 2015.
15Nuts
Australian nut production The volume of almond exports The volume of macadamia
has increased by to India increased by exports to China increased by
19 since 2014
%
27 in 2017
%
47 in 2017
%
Australian nut production has increased significantly in the last Australia’s top five nut export markets by value
three years. Since 2014 nut production has increased by 19 per
cent. Almond production has increased 27 per cent since 2014 and $250
macadamia production 19 per cent. Export value decreased two per
cent in 2017 largely due to a drop in almond exports to Spain.
Domestic almond consumption has increased seven per cent since $200
2014. Macadamia consumption has been flat since 2014. The majority
of demand for nuts comes from the export market. Almond exports
increased significantly in 2015 as a result of drought and production $150
decreases in California. Since 2015 exports have settled around
$445M in 2017, three per cent below 2016. Macadamia exports have
retained the growth achieved in 2015 when export value increased $100
by 14 per cent. In 2017 the value of macadamia exports eased by two
per cent to $272M.
India is Australia’s largest export market for almonds. Volume $50
exported increased by 27 per cent in 2017. Demand from India has
been strong with volume more than doubling since 2012. A positive
$-
for Australian producers in 2017 was an increase in unit price for
India China Vietnam Spain Japan
both shelled and in shell almonds sold to India. The shelled almond
price increased 14 per cent to $7.88/kg. The in-shell almond price 2015 2016 2017
increased 11 per cent to $6.13/kg. Australian almond exports are
mostly in-shell but a lift in unit price for shelled almonds resulted in Source: GTIS
increased export value in 2017.
The outlook for almond exports to India is positive. India’s ending Major production regions include Bundaberg (QLD), Ballina (NSW)
stocks of almonds peaked in 2014 at a record high of 29,800 tonnes and Lismore (NSW).
and began reducing in 2015 dropping by 30 per cent. Ending stocks Macadamia exports are a reasonably new opportunity for Australia.
are holding at 20,000 tonne which is why we are seeing growth in Their popularity has grown quickly particularly in the two main
exports as India uses imports to satisfy current demand. Imports are markets, China and Vietnam. The volume exported to China in 2017
at a record high of 95,000 tonnes in 2017. Domestic consumption increased 47 per cent to 10,468 tonnes. Moreover, the unit price
is also at a record high of 96,000 tonnes. Australia accounts for continues to increase year on year. In 2012, exports to China were
approximately 26 per cent of India’s almond imports which is a very $3.52/kg and in 2017 the price averaged $6.57/kg for in shell
large share of total Australian production. Based on these statistics macadamias. The volume exported to Vietnam increased 18 per cent
we expect almond exports to India will again be higher in 2018. The in 2017 to 7,427 tonnes. Vietnam had been importing very small
price appears to have settled and should average around $6-7/kg for quantities of shelled macadamias since 2012 but in the last two
in shell almonds and $7-8/kg for shelled almonds. years they have imported a large volume of in shell macadamias. In
It’s worth noting that Australia has spread its market risk across 2015, in-shell exports to Vietnam were none existent, then in 2016
multiple markets for almonds. Although most in-shell almonds are we exported 5,793 tonnes and followed up in 2017 with 6,183
exported to India, half of Australia’s production is exported as shelled tonnes. The unit price of macadamias exported to Vietnam has also
almonds to six markets. The majority goes to Spain followed by grown in the last two years from $6.56/kg to $6.60/kg for in shell
Germany, U.S, Netherlands, India and the UAE. macadamias. Based on export growth we expect macadamias to
perform well in 2018. Prices should continue to grow and average
Australia is the largest producer of macadamias in the world around $6.60-7/kg for in shell macadamias. Local price for in shell
producing 35-40,000 tonnes per year. Production growth has macadamias is around $5.50/kg up from an average of $3/kg in
averaged around eight per cent year-on-year since 2011. 2013. We expect that as demand grows so too will local prices.
16Nuts - Price table
CATEGORY LATEST ONE YEAR AGO 2 YEAR 80TH 20TH
AVERAGE PERCENTILE PERCENTILE
EXPORT $/KG
Almonds - in shell 6.16 4.82 5.76 6.33 4.83
Almonds - shelled 7.40 7.33 7.53 8.33 6.99
Macadamia - in shell 7.05 10.15 9.25 9.96 6.55
Macadamia - shelled 23.74 24.41 19.65 22.72 16.37
Source: GTIS
17Wine and table grapes
Australian wine export Australian wine exports Table grape exports
value increased to China could reach to China increased by
13 in 2017
%
$1 in 2018
B
46 in 2017
%
Australian wine production increased five per cent for the 2016/17 Exports of wine and table grapes to China
year to 1.37 billion litres. The volume of grapes crushed was up eight
per cent to 1.98 million tonnes. Overall, 2016/17 was a successful $800
year for wine production and sales. Wine sales increased eight per
cent to $5.6B. The split by volume in 2016/17 was 61 per cent $700
export and 39 per cent domestic. In 2017 exports were up 13 per
cent to $2.6B, with volume increasing eight per cent to 816M litres. $600
Red wine dominated exports with 60 per cent of volume. Domestic
consumption increased two per cent to 500M litres at a value $500
of $3.3B up six per cent. The split between red and white wine
domestically was 45 per cent white and 40 per cent red. With red $400
becoming more popular in 2016/17 in comparison to other years.
Domestically, red wine sales increased with Pinot up 22 per cent and $300
Shiraz nine per cent.
$200
Australian wine exports were strong in 2017 largely due to demand
from China. Wine exports to China were up 51 per cent compared to $100
2016, totalling $709M. China accounts for 27 per cent of Australia’s
wine exports by value. Red wine is in high demand in China with $-
exports increasing 53 per cent in 2017 to $671M. White wine exports Wine Table grapes
to China also increased in 2017 up 32 per cent to $22M.
2015 2016 2017
Since 2015, wine exports to China have more than doubled.
The China-Australia Free Trade Agreement has increased the Source: GTIS
competitiveness of Australian wine exports with tariffs reducing
from 14 per cent to 2.8 per cent. Growth in value of exports since Domestic consumption continues to be flat, with production growth
the implementation of the Free Trade Agreement has averaged 44 being driven by export markets. Export value increased two per cent
per cent per year since 2015. Monthly export value is yet to establish in 2017 to $373M. Australia’s largest market for table grapes is
a seasonal pattern which implies demand is still growing and the China. Total value increased 46 per cent in 2017 to $148M. Aside
market is yet to reach a demand/supply balance. We expect another from China, the value of table grapes fell in other major markets such
year of strong growth in wine exports to China particularly in red wine. as Indonesia down by 11 per cent to $50M and Japan down by five
Considering the growth since the FTA, it’s possible that the value of per cent to $29M. Average unit price increased to $3.49/kg across
wine exports to China could surpass $1B in 2018. all markets, up 4.6 per cent compared to 2016. Average unit price for
Table grape production in Australia has grown by 23 per cent since fresh grapes into China increased six per cent to $3.60/kg. Average
2014. The majority of supply comes from Victoria around Mildura and export price has continued to rise since 2012, which is an indicator of
Robinvale. Production in the Robinvale area increased significantly strong demand.
in 2016 up 49 per cent to 40,153 tonnes. Production around Mildura Despite total export volume falling in 2017, the growth in demand
was up 37 per cent in 2016 to 64,900 tonnes. Melbourne market from China in the last two years puts the industry in an excellent
prices for Victorian produced white table grapes were on average 16 position to continue production growth in 2018 and beyond.
per cent higher in 2017 at $2.58/kg. Red table grapes were down by
16 per cent in 2017 averaging $2.68/kg.
18Seasonal conditions
Recent conditions in Australia have been characterised by above
average rainfall and warmer than average temperatures in the west.
Queensland conditions have been below to very much below average
rainfall with above average temperatures. The southern states have
received average rainfall in the Riverina with warmer than average
temperatures. Tasmania has experienced its highest average
temperatures for November to January.
The ENSO Outlook remains at LA NIÑA status, however recent
observations in the tropical Pacific suggest this event may be in the
early stages of decline. Climate models also suggest this event may
have peaked, with all model outlooks indicating the tropical Pacific
Ocean is likely to continue to warm, and most suggesting a return to
neutral by April 2018. This would be in line with typical El Niño / La
Niña evolution, where events tend to peak in December / January
and transition back to neutral in the autumn months. (BOM 2018)
A late monsoon season has delayed rainfall in Queensland, with much
of the wet season rainfall yet to fall. A weak La Niña is nearing its
peak in the tropics. The rainfall outlook for February to April is likely to
be more rain in Western Australia and the Northern Territory. Tasmania
and eastern Victoria is likely to be wetter than average for the next
three months. Temperatures are likely to be warmer than average
in Tasmania and Queensland but cooler than average in Western
Australia and south eastern regions of NSW. Irrigation catchments are
lower than this time last year in Victoria and could do with a top up.
Water storages in Tasmania are higher than this time last year which
is a positive for local irrigators.
Chance of exceeding median maximum temperatures Chance of above median rainfall from
February to April 2018. February to April 2018.
Source: Bureau of Meteorology (BoM)
Source: Bureau of Meteorology (BoM)
19For report enquiries: AG ANSWERS P 1300 796 101 E ag.answers@ruralbank.com.au For banking enquiries: RURAL BANK P 1300 660 115 W ruralbank.com.au ELDERS P 1300 618 367 E bankmarketing@elders.com.au
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