17 Jan 2020

Bushfires hit fruit, vegetable supply lines

The impact of bushfires on transport networks and power supplies is among factors pressuring fruit and vegetable prices, according to industry figures.

The problems delaying the delivery of fresh food to markets or keeping produce in cold storage come on top of farmers having to deal with the prolonged drought.

Vegetable industry association Ausveg said in times of extreme events, such as the bushfires, price increases are typically short-term.

That is because Australia often has other growing regions which might pick up supply, although different areas had different peak seasons.

Still, Ausveg’s Shaun Lindhe said the ongoing fires had created “logistical issues in getting product from the farm to consumers”.

This included highway closures, and trucks being diverted and spending more time on the road.

“There's also ... power outages. So that affects cold-storage facilities, it affects picking and packing, so again compounding some of the supply issues,” he said.

He said among crops affected included broccoli, lettuce and cauliflower. Another impact comes from damage to farms, although it is unclear how many operations have been damaged.

Drought was also a long-running issue but Mr Lindhe said farmers were focusing on practices that would mitigate its impact.

Brisbane Markets, which receives produce from more than 7000 growers, said the bushfires and persistent drought was squeezing fruit and vegetable production “as well as road transport both within and between states”.

“This is creating supply issues in relation to a range of products, including many vegetable lines, and unfortunately the impact could run over an extended period particularly in relation to infrastructure and the damage caused to the likes of tree and vine orchards,” Brisbane Markets chief executive Andrew Young said.

“As supply volumes tighten, that was likely to be reflected in price increases for many product lines.”

Mr Young argued that the cost of fresh fruit and vegetables still remained “very reasonable”, while Ausveg’s Mr Lindhe urged people to keep buying produce as this would support farmers and regional communities.

Both men declined to make specific price  forecasts.

Higher inflation

UBS economists  this month said the bushfires would impact sectors including agriculture as well as retail, with consumer confidence dropping.

“Higher food prices due to drought and bushfires along with rising insurance premiums will likely see higher headline inflation,” they said.

“Much of this impact will likely be trimmed out of ‘core’ measures so will likely be looked through by the Reserve Bank of Australia.”

Listed operations that have reported an impact include the Vitalharvest Freehold Trust, which has citrus and berry farms in its portfolio and leases the assets to produce grower and marketer Costa.

Vitalharvest told the market  this month that bushfires in NSW had affected one farm that accounted for 6 per cent of its berry plantings. The plants  did not appear to have been  affected but a packing shed was damaged, Vitalharvest said.

Last month Costa  said the drought was causing it to alter cropping – less rain than forecast prompted it to remove a large part of a raspberry crop and  triggered an early prune of some “lower value blueberry varieties to conserve the priority crop”.

But berry farms in Tasmania and Far North Queensland were unaffected by drought, Costa said.

Attempts to obtain comment from Costa on Wednesday were unsuccessful.

Other organisations also are yet to see the fallout. Steve Marafiote, of South Australian-based Sundrop Farms, which uses technology such as solar power and hydroponics to grow tomatoes and capsicums, said the  bushfires had had “no impact on our business as yet”.

SOURCE ; https://www.afr.com/companies/agriculture/bushfires-hit-fruit-vegetable-supply-lines-20200115-p53rps

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