Figure 1: Australian Harvest & Haulage Cost Index December 2022, Nominal
Sources: ABS, AIP, Margules Groome
Margules Groome’s quarterly harvest and haulage cost index for Australian plantation operations is based on price indexation mechanisms used by industry, weighted by volume harvested (Figure 1). The previous index for September 2022 indicated that with the Federal Government having re-imposed the full fuel excise from late September the decline in fuel prices will be short lived, and so it was. But the fuel price increases in the December quarter did not translate to an increase once tax credits and GST were considered, but a decrease. As a result, the harvest and haulage index plateaued.
Inflation as measured by CPI continued to be a significant contributing factor supporting the harvest and haulage index at relatively high levels, countering the drop in fuel prices (ex-tax credits and GST). Increasing wages are also helping in this respect. However, with inflation starting to fall, capacity constraints on supply side lessening, and economies adjusting to the energy shock caused by the Russia-Ukraine war, expectations are the harvest and haulage cost indices will start to fall in 2023. In real terms, it seems the cost spike in 2008 will remain the high point (Figure 2).
Figure 2: Australian Harvest & Haulage Cost Index December 2022, Real
Sources: ABS, Margules Groome
For further information and analysis contact Margules Groome.