Inflation Challenges for Farmers
It's important to remember that a problem for Australia's agriculture industry is a problem for us all. Agriculture is unique in the sense that so much time, money, and effort goes into sowing fields and setting up for harvest - with very little certainty of how much profit will be earned come harvesting time.
This has led profit-concerned farmers to produce less product hoping that a smaller outlay might improve their chances of making money. Or at least limit their risk against further losses.
The resulting shrinkage in production has led to food shortages, accompanied by price hikes in certain sectors. So what is affecting agriculture the worst right now?
Rising Input Costs
Input costs have gone up across the board. Fertiliser is a big one, having risen by over 156% since 2020. The same is true for fuel prices, particularly diesel. Feed costs for livestock agriculture have also spiked, all of which is indicative of the cost of living crisis impact on businesses.
Supply Chain Issues
Then there are the problems facing agriculture supply chains. Transport costs for shipped goods have risen while also causing delays for farmers trying to get vital resources for their production.
Labour Shortages and Wages
The agriculture industry is facing a talent crunch. Due to a lack of seasonal workers as well as people moving out of the agriculture industry in general, farmers are struggling to fill roles on the farms. Similar to the hospitality industry, this worker shortage is also pushing wages higher, further straining the margins in the agriculture industry.
Limited Government Support
Australian farmers receive very little in the way of government support. In fact, Australia has some of the lowest subsidy rates of any developed economy in the world; with Australian farmers receiving an average of 2% of their income via subsidies. Even the average for emerging economies sits at around 8%.
At Choice Energy, we can't help with all of the issues listed above, but we can help agriculture businesses save on one of the largest expenses of all - their energy bill.
How Agriculture Businesses Can Save On Energy
There are a few key ways that we've helped agriculture businesses, both large and small, to save big on energy. Take Murray River Organics, for example, Choice Energy saved them $200,000 over a three-year term - and we can do the same for you.
Energy Audits and Efficiency Measures
The best way to start saving money on your energy bills is to have us perform a thorough free energy assessment. In this assessment, we identify inefficiencies in energy use and make recommendations to improve.
This includes practices like demand management; where we advise your agriculture business on how to manage the amount of energy used during peak pricing periods. For agricultural businesses, this could mean practices like shifting irrigation to off peak hours or staggering the use of high-energy consuming equipment.
We can also help with network tariff optimisation. These are the fees that you incur for the delivery of your energy. But if your farm regularly uses less energy than your current tariff allows for, this can become a quick win that instantly starts saving you money.
Energy Procurement
Our energy procurement service is designed to help each of our clients to source the most competitive rates on the market. With unfettered access to up to 13 energy retailers, our expert consultants perform contract negotiations, market analysis, and timing purchases to get you the best deal possible.
Energy procurement for small businesses is a key part of our service. We help to negotiate customised contracts based on an in-depth analysis of your usage patterns. We also help small farms to set up infrastructure allowing them to avoid peak usage times and save on their bills in other ways.
For larger businesses, our commercial energy procurement service involves securing group procurement tenders, helping farmers in the region to pool their energy demand. We also help you secure flexible contracts and provide regular monitoring of the market to ensure your deal remains the best one available.
Commercial Solar
Solar energy is a game-changer for agricultural businesses. By installing solar systems, farms can power energy-intensive operations like irrigation, refrigeration, and processing while reducing their reliance on the grid. With government rebates and feed-in tariffs available, commercial solar not only lowers energy costs but also creates opportunities for long-term savings and greater sustainability.
If you’re ready to take back control of your energy bill, get in touch with the Choice Energy team today for a free energy assessment.
