Cost of living: Farmers hit by ‘perfect storm’ warn shoppers they’ll have to pay more for vegetables

Shoppers shouldn’t expect any relief at the checkout any time soon, with food producers warning they have no choice but to pass on their higher costs with some farmers claiming transport costs have increased by nearly 50% and fertiliser 300%, while others complain they have no one to pick their produce. Rod McPherson of Market West, which represents fruit and vegetable wholesalers at Canning Vale’s Perth Markets, said his members were being hit by soaring production costs and are being crippled with labour shortages. Supply of some produce was tighter because growers were reducing their crop sizes, aware they couldn’t get pickers and packers, with backpackers yet to return, he said. Carnarvon grower Dan Kuzmicich said the labour shortage was the worst part of the “perfect storm” of pressures. “If you haven’t got that workforce, the supply is going to be down, which means prices are going to be up,” Mr Kuzmicich told The West Australian. “Tomatoes are expensive, beans are expensive, zucchinis are expensive. “It comes down to the producer can’t get it out to market. “A tomato grower (I know) didn’t even pick his tomatoes because he couldn’t get the labour.” He said the cost of operating a farm had “gone through the roof”, with transport costs up 48 per cent over the past six months or so. Another major grower said the price of fertiliser was up more than 300 per cent since the end of 2021. “When you’re talking a margin of 5-10 per cent, that just blows you out of the water,” Mr Kuzmicich said. All the talk at an industry conference last week was $12 lettuces on the east coast after flooding and heavy rains, he said, but there was more price pain for shoppers to come, with some WA growers of carrots, beans and sweet corn telling supermarkets they needed to pay more. “My understanding is that they’ve accepted that and are going to forward on the cost to the consumer,” Mr Kuzmicich said. Rabobank senior dairy analyst Michael Harvey confirmed supermarkets were fielding “unprecedented” requests by food producers for better prices. Even lucky WA lettuce growers helping to boost east coast supply are on thin margins. Simon Vu, who alongside father Khai Vu produces leafy greens in Perth’s north, said shoppers were paying “absurd” prices, with lettuces costing $5-6 a head in WA, but their business expenses were higher than ever. “So even though the returns are also higher than ever, it’s not making too much of a difference,” he said. “Our biggest concern at the moment would be labour. It’s hard to find workers and the cost of labour is also a lot more expensive. “There’s no-one to harvest.” The weather is also wreaking havoc with Woolworths telling customers its supply of fancy, cos and iceberg lettuce, had been affected by “heavy rain in the growing regions” at its Inglewood store. Meanwhile, heavy rain in Carnarvon last week is causing tomatoes and capsicums to split. VegetablesWA’s Manus Stockdale said capsicum was among produce lines already in tight supply over recent months and suggested growers were absorbing big cost increases, with a sizeable gap between what they were being paid versus the high prices shoppers faced. “The prices you see at retail are not reflective of the prices that the grower receives,” Mr Stockdale said. “Growers are struggling to maintain their profitability.” Eggs producers are also feeling the pain, particularly from grain prices as Russia’s invasion of Ukraine slashes supply. “Consumers need to be aware that prices may be going up and the reasons behind this is just the pressures we’re facing,” Rachel Wilson of Eggs WA said. “It’s just not sustainable for us to be able to keep our prices as they are and expect to make a profit. “The cost is going to be passed along.” She said she didn’t expect egg prices would spike dramatically but added: “You can never say never”. “It’s not going to be something that happens overnight. “A lot of the price is beholden to the big retailers, what they’re willing to offer and to pay.” Mr Harvey said higher costs were across all consumables, throughout the supply chain and around the world, with the latest Australian Bureau of Statistics inflation numbers at 10-year highs and even higher in North America and Europe. “It’s broad-based and we think there’s more coming down the line,” he said. “We do caution consumers to be bracing for a period of sustained high food inflation. “The natural consumer response is trading down ... looking to discounters, bulk buyers, maybe not buying a brand product but a private label product.” He said farmgate prices for milk were at record levels this season and signs pointed to a further 15-20 per cent surge in 2022-23, which would likely be passed onto consumers. WHAT YOU’RE PAYING: Tomatoes - $10/kg or up to $1.09 each Stringless beans - Up to $16kg Carrots: Up to $2.40/kg Sweet corn: $12/kg or up to $2.20 each Zucchinis - Up to $2 each Iceberg lettuce - Up to $6.50 each Red capsicum - $10/kg or $2.48 each Yellow capsicum - $15/kg or $3.73 each Green capsicum - $9/kg *Prices at Coles, Woolworths and Gilberts