In this strange new pandemic world, impacts to farming businesses in Australia, thank goodness, have been relatively minimal. The longer this issue goes on though, the higher the risk of more inroads.
What have we seen for farmers, and what might we see:
- Global produce markets are nervous and that is being reflected in prices,
- $AUD is up at the moment but the market is volatile.
- Food service and tourism operators have been the most severely impacted businesses; therefore those producers most closely reliant on that trade are feeling definite effects.
- Prices for produce viewed as luxuries are under pressure.
- Labour shortages of overseas workers and travel restrictions are causing harvest and planting issues for some.
- New plant and equipment supplies are tight, and imports are especially slow. So, good used equipment is expensive and scarce as well.
- Demand for high-quality productive land is very high, and therefore, so is pricing. Family farmers and corporates are optimistic about agriculture’s future and those in a position to expand are doing so.
- Investor interest is once again high in productive agriculture, so we are seeing some new institutional players considering entering the market and some older ones re-visiting.
- Irrigation water pricing is not as yet under the same pricing pressure as property. But watch this space.
And what about our consumers?
- Supermarket trade is up, as are nursery, furniture and home-wares, hardware, sports equipment and handicrafts. This is all reflective of people spending more time at home.
- Consumers have real concerns about fresh food safety and supply.
- Provenance – knowing where food was grown, caught or raised; knowing how it was processed, stored and transported – is high on your consumers’ mind.
- Whilst there have been severe income impacts for many, a reasonably large proportion of the population that are still working have more disposable income.
What should we do?
- Focus on product quality.
- A good time to fully understand the costs that drive your business, and drive towards efficiency.
- Be more strategic about big purchases – think, plan and talk to your suppliers or agents well ahead of time.
- Take the time to get on top of maintenance, so when you’re ready to go, the equipment is. Tradies and replacements are scarce – a bit of TLC on the old gear will pay off.
- Explore new tech that might ease the labour issue.
- Stay positive, Look for opportunities. Spend quality time with your families.
- Stay safe.