Food Industry Update
Food prices have risen at the highest rate since April 1990 when food prices rose 11.4%. In the year between December 2021 and December 2022, the annual increase was 11.3%. Meat, fish, and poultry increased by 11%, while fruit and vegetable costs rose up to 23% with kiwifruit, potatoes, and tomatoes experiencing the most dramatic rise.
Labour shortages continue to hamstring the meat industry. Overseas workers are incoming, but empty roles and time off due to COVID continues to cause problems, compounded by unusual weather patterns resulting in animals coming off farms in high numbers earlier in the season than prior years.
Eggs are scarce and prices are up, but Zeagold CEO John McKay expects this to be a short term problem. Problems have been caused by increased costs, changing regulations, expensive feed (McKay notes that feed makes up 60% of the cost of producing eggs), and reduced flock numbers. Stuff reports that farmers who were already selling cage free, free range eggs are experiencing a boom as new customers turn to alternative supply sources while supply to supermarket shelves is limited.
Zespri has announced a 5 year growth plan that aims to play it safe in the face of ongoing problems from fruit quality, labour, and weather, amongst other issues. They predict a 39% increase in high quality fruit exports by 2027, if things go to plan. Stuff reports that there will be new hectares released in reduced numbers for planting each year, including RubyRed, so their plan is fairly conservative but not considered prohibitive.
The picture is not all bad in the food and agriculture industry, with summer fruits reportedly having a strong season for high quality fruit, with volumes expected to be up from last year.
The potato industry is doing well, with the impact of adverse conditions in recent years being shown to be minimal and profits holding relatively steady around the $1.095 billion dollar mark - there has been a slight drop from last year but it is generally holding strong.
Metwatch is being flagged as a programme that will help farmers save on lost crops, and in the Hawkes Bay structures are being shown to be effective in protecting crops from extreme weather providing a point of hope for the future as many crops are lost to flooding and soggy soils cause problems for growers.
Finally, a vaccine for American Foulbrood disease rounds off the good news, conditional licence has been granted in the USA to administer a vaccine via the Queen to protect vulnerable bee hives from the devastating disease. If this vaccine proves successful and effective, it will be a huge relief for beekeepers as it is released to the wider industy.
Great local Accountants. They provide an excellent service with great explanations for the layman. They provide accounting services for non rural clients too.
Rural Accountants is a real asset to our business.
The team at Rural Accountants pretty much manage all our administrative tasks for the group including payroll and tax planning, ensuring we don’t pay any more than necessary. They are at the forefront of technology and have helped us get up and running with Xero and Figured which is much more efficient than the way we used to work.
Christine is very knowledgeable, great to deal with and knows our business well. She is also a sheep & beef farmer so knows the industry really well and understands our needs.
Rural Accountants keeps us on track through strategic and forward planning meetings throughout the year. Christine knows our business inside out so she can deal with our questions instantly.
What Our Customers Think
I used to work out my GST and process it manually which would take me at least a full day every two months. The team set up reconcilliation rules and other quick tools, and showed me how to do all my reconcilliations and process my GST returns through Xero which now takes me no time at all!
As a farmer, Christine understands our business and how farmers and growers operate.
We use Rural Accountants to provide a full accounting service to an orcharding partnership which operates a number of orchards with a wide spread of varieties and management systems. Rural Accountants are always timely and accurate, and their annual financial accounts are extremely easy to understand and very grower-friendly.