Soaring input costs squeeze food producers


Official government data has revealed total input costs for wheat farmers has doubled in just two years.

According to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Financial performance of cropping farms 2029-20 to 2021-22 report, total input costs for the average wheat farm in NSW increased from $212 per hectare in 2019-20 to $425 per hectare in 2020-21, with further increases expected through to 2022-23. Fertiliser costs increased from $64 to $82 per hectare, while the cost of chemicals increased from $30 to $63 per hectare.

NSW Farmers Vice President Rebecca Reardon said the figures reinforced what farmers had been saying for many months: the cost of food production was outpacing the prices paid to farmers.

“Everywhere you look people are worried about the rising cost of food, the rising cost of power, the rising cost of fuel, farmers are no different,” Mrs Reardon said.

“What is different for farmers is that we have very little ability to pass on these price rises to our customers, so what you’re left with are shrinking profit margins.

“The natural disasters we’ve seen over the past year are compounding this squeeze, and we are very concerned about the pressure it’s putting on productivity.”

For the 12 months to the June 2022 quarter, the consumer price index rose 6.1 per cent, with transport costs soaring by 13.1 per cent, while food prices rose by 5.9 per cent.

Mrs Reardon said boosting productivity by producing more from less was a fundamental way to tackle inflation and relieve the stress of rising input costs. She called for greater investment in productivity-boosting measures such as precision agriculture technologies, which reduce the amount of fertiliser and chemical applications, and world-class agricultural education courses which improve the capability of farmers to adopt new productivity-boosting technologies.

“Australians are a nation of innovators, and our farmers are always looking for an edge and a way to improve what they do,” Mrs Reardon said.

“Fundamentally, if farmers can produce more food and fibre at a lower cost, and get it to consumers at a lower cost, we’ll see a reduction of this cost-of-living pressure.

“Farmers and families are in this together – albeit on different ends of the supply chain – and we appreciate the support Aussie families have shown for the agriculture sector.”


Date: Thursday, July 28, 2022
Media Contact: Steve Mudd  | 0429 011 690 | mudds@nswfarmers.org.au