Sunday, November 28, 2021

Price hikes a double whammy on harvest efforts

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NSW Farmers, Media Release, 26 October 2021

NSW Farmers is calling for better long-term national fuel security as higher fuel prices take their toll during a tight harvest season.

Harvest
Photo: Blaz Kure

It’s the latest hit to the grains and horticulture sectors, which have been crying out for better access to harvest workers for several weeks. Not only will farmers be frantically trying to find labour, they will also be frantically trying to secure fuel before the price blows out.

Across the country motorists and industries are paying more for petrol and diesel due to rising global oil prices with Singapore Mogas closing at almost $US100 a barrel recently – up from $US84 in July 2020.

NSW Farmers Grains Committee Chair Justin Everitt said Australia was particularly exposed to fluctuating world oil prices as there was very limited on-shore storage capacity. The result was little protection for farmers, truckies and regional motorists from ‘bowser’ shock.

“We are severely disadvantaged as a nation with only two oil refineries with long-term operating certainty, down from four at the beginning of the year; BP closed its refinery in WA this year and Exxon Mobil will close its Victorian plant before the end of the year,” Mr Everitt said.

“After 18 months of this pandemic we’re still highly exposed due to a number of off-shore supplier dependencies.  The federal government is undertaking a long process to establish large on-shore regional storage capacity, but in the meantime most of our strategic oil reserves are held on the other side of the globe in the USA.

“Country people have been highlighting this problem for years and now it’s really biting us at the worst possible time for harvest – not many workers, state border restrictions, and now running trucks and harvesters will cost more.”

The projected record grain harvest is getting underway in northern NSW, which will drive demand for diesel. Mr Everitt said this price hike was a bitter pill for all primary producers and contract harvesters who will see higher input costs – even more uncertainty for the farm sector recovering from drought, natural disasters and the restrictions from COVID-19.

“Insurance costs have gone up, fertiliser prices have gone up, and now fuel prices are going up,” Mr Everitt said.

“Growers are also paying more to attract workers just to get their harvest started, and all of those costs could mean an increase in consumer prices for grain related consumables in the next 12 months.

“We need long-term planning and policy from all governments to take the handbrake off agriculture so we can get on with business.”

Key facts:

  • Farmers and regional residents have significant dependency on their vehicles, with limited or non-existent public transport – everything they do depends on their vehicles – from undertaking critical farm business to shopping for groceries, taking their kids to school, and travelling to social gatherings.
  • Most of the fertiliser (70 per cent) used by Australian farmers is imported.
  • Grower prices for urea and phosphate based MAF are up more than 30 per cent per tonne across Australia compared to a year ago.
  • Reduced global production has put an even greater strain on already challenging fertiliser market for farmers and other food producers.
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