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AuctionsPlus survey highlights farm cost squeeze

Sheep Central, July 1, 2022

Working dogs like Ben Coster’s Coopendale Lucy are doing their bit and more to keep Australian faring costs down.

AUSTRALIAN livestock farmers concerned about inflation, rising costs, the labour shortage and their carbon footprint are taking action, even if it’s investing in a new working dog.

The online marketplace has completed its second annual independent research report “The Gavel: Inflation Erasing Farming’s Golden Run” after interviewing more than 200 producers.

Inflation, increased costs, labour and carbon head the concerns of the survey respondents in the report by AuctionsPlus Insights chief economist Tim McRae and analyst Teeah Bungey.

About 82pc of surveyed producers still feel excited about the industry and 74pc of respondents were ambitious and focused on growing their operations, although this id down from the 83pc in 2021. About 39pc of respondents highlighted that it is difficult to know where to invest time and effort to get the best returns.

Inflation, increased costs, labour and carbon head the concerns of the survey respondents in the report by AuctionsPlus Insights chief economist Tim McRae and analyst Teeah Bungey.

Labour and the dog factor

AuctionsPlus found 84pc of livestock producers are concerned about access to skilled labour, with 65pc stating they had been impacted by the labour market in past year.

About 58pc of 2022 respondents stated their inability to employ enough staff is impacting on productivity and 36pc highlighted a loss of potential earning – the lost production and incomes is massive.

One strategy in this area is reflected in the rising average price of working dogs sold in an increasing number of auction sales. The 2022 year-to-date average price of working dogs sold of $7935 is an 118pc increase on 2016 prices.

Farming costs and inflation

The survey found 89pc of respondents expect to have their business negatively impacted by inflation.

And 98pc expect increased costs will impact their business, with 86pc anticipating squeezed margins and 67pc facing increased staffing costs.

The AuctionsPlus report said the annual rise in the cost of inputs has now started to outstrip the annual rise in many livestock segments. AuctionsPlus said one of the ways producers are looking to reduce costs is through the purchase of second hand machinery and items, with a lift in catalogue views and buyer connections for the rising number of online machinery and clearing sales.

Climate and carbon

The number of surveyed producers concerned about the impact of climate change has risen from 24pc in 2021 to 30pc of 2022 respondents.

“It should also be acknowledged that our survey was conducted around the time of the Federal Election, when climate change was a headline issue.

“Additionally, the largest change in climate change concern was from Victorian producers, doubling on 2021 results, to 46pc,” the report said.

AuctionsPlus said 77pc of respondents stated they are doing as much as they can to reduce the carbon footprint of their operations.

Overall confidence still high

The Gavel survey found 79pc of respondents believed Australian agriculture is heading in the right direction and producer confidence in their financial future over the next five years is high, with 82pc responding that they are “very confident to quite confident” they will be able to meet their financial needs over the next five years, down from 88pc in 2021. AuctionsPlus said the main contributor to this decline was a significant increase in the number of producers who are “very concerned” about their ability to meet their financial needs, up from 2pc in 2021 to 7pc in 2022, linking back to the prevalence of inflation pressures in the industry.

Source: AuctionsPlus.

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