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Farmer reveals increasing cost to grow strawberries, compared to higher price consumers are paying

25 June 2022

Photo of strawberry crop.
Some growers are trying to safeguard their farm's future by downsizing their strawberry crop, and targeting mainly the gourmet market.(ABC: Courtney Wilson) 

First, it was lettuce getting a bad rap for reaching astronomical prices; now, strawberries are selling for a staggering amount.

But what does it actually cost for a farmer to grow a product like strawberries, versus what a consumer is asked to pay for that same product?

Bundaberg strawberry growers Bruce and Tina McPherson have thrown open the books to explain.

"On average, a plant will produce a kilo of strawberries per season," Tina McPherson said.

Photo of a punnet of strawberries.
Producing strawberries five years ago cost less than $4 a kilo. Today, the same process comes to $6.52 a kilo.(ABC: Courtney Wilson)

The cost of a strawberry

For the physical plant, which the McPherson's explain is a 'plug' plant, the cost works out to be about $0.90.

"Then we've got ground-prep which is about $0.15 a plant," Bruce McPherson said.

"The other one which we call pre-prep, includes your plastic (mulch), putting your fertiliser underneath your trickle tape, all your plumbing up for irrigation. That's about another $0.43 per kilo."

Fertilisers and sprays cost about $0.75.

Maintenance costs, which includes weeding and maintaining headlands, comes in at around $0.28.

Picking costs an estimated $1.30 per kilogram.

Packing also works out at $1.30 per kilo.

woman holding strawberries.
Balancing the books is a daily juggle for strawberry farmers such as Tina McPherson.(ABC: Courtney Wilson)

For freight itself, the McPherson's worked out they pay approximately $0.55 per kilogram.

"Then we've got a clean-up at the end of the season, so we pull up all the plastic, we put that through a recycling plant, we have to pay to dump it. Then we put a cover crop back in and we rework the ground to get ready for next year," Mr McPherson said.

"That adds up to about another $0.16 for all of that."

In total, that comes to $6.52 per plant, or per kilo, in fixed costs alone.

Bruce McPherson said five years ago, the same costing would have come in at below $4 per kilogram.

Fuel, fertiliser, labour

He attributed the bulk of the price rise to three big ticket items that most primary producers can't avoid: the cost of freight, or fuel/freight as they're interlinked; fertiliser, and labour.

Man packing strawberries
Bruce McPherson says what farmers do today in the paddock feeds people all around the world and they need some surety.(ABC: Courtney Wilson)

The overall price for a punnet of strawberries is also affected by the rate for a commission agent, which is generally around 15 per cent.

Then there's covering the cost of onselling to a grocer, who wants a margin of between 25 to 35 per cent.

There's also waste to consider, which in strawberries can be substantial. Mr McPherson said about 25 per cent of every kilogram was classified as 'waste' or sub grade.

"So the price, you know, it ratchets up pretty quick. I get five bucks for what will be selling for $11 in Melbourne and that's pretty tough to stomach sometimes."

When strawberries are fetching record prices in the supermarket, $6.52 per kilogram in production costs might seem reasonable.

Photo of a packaged punnet strawberries.
Packaging costs around 70c a kilo.(ABC: Courtney Wilson)

But what about come September when the same product can often be found selling for little more than $1 per punnet in a supermarket?

"I can send product off to Melbourne, the market sets the price, and we take the price that we're offered."

Consumer confusion

Richard Shannon is acting chief executive of Growcom, which represents Queensland fruit, vegetable and nut growers. He said there was a disconnect between the increasing production costs, and the prices consumers were paying for fresh produce.

"AusVeg has done a little bit of work on this," Mr Shannon said.

"Their estimate is that over the last two years, the cost of production in the vegetable industry has risen — depending on the crop — between 25 and 40 [per cent]."

Photo of strawberry field.
Rising costs for necessities such as fertiliser, fuel as well as the cost of freight and labour all contribute to the price point for strawberries.(ABC: Courtney Wilson)

If input costs continue to rise, does that mean the price of fresh fruit and vegetables must also continue to rise? And to what end?

"We can't expect growers to not see some return, some greater return in recognition for the greater cost of production."

Mr McPherson said the government needs to step up.

"It's demand driven," Mr McPherson said.

Photo of strawberry packers.
A new wage structure for the horticulture industry took effect in April, with workers' pay linked to productivity.(ABC: Courtney Wilson)

"The fact remains that whilst we feed locally and interstate, there's plenty of people in agriculture out there that what they do today in the paddock feeds people all around the world.

"If you're a grain supplier or a beef grower or grain grower, you know that's what they're doing. They are feeding the world and they need some surety."

Watch this story on ABC TV's Landline at 12:30pm on Sunday, or on ABC iview.