The brutal effects of the country’s long-running drought will hit consumers at the cash register, a leading agribusiness expert warned this week.
Red meat prices could jump as much as 25 per cent between now and December while white meat and bakery products could be 16-18 per cent more costly at the checkout, David Farley said.
And the immediate flow-on effect will be in the milk industry, he added.
The former head of the Australian Agricultural Company (AACo) said urban residents needed to brace themselves for food price inflation to go through the roof.
“The drought will come out of their wallets as well,” Mr Farley warned.
“The message needs to be heard – and fast – that we are all part of this drought.
“If the situation doesn’t get better, prices in the first quarter of next year will rise again.”
Mr Farley, who describes himself as a staunch advocate for the industry, said Australia was facing a “major collapse to our agriculture” due to the drought and the credit crunch from banks.
The catastrophic effects will be felt beyond the widely publicised images of bare paddocks and starving stock.
He said policy-makers would have to make some tough decisions about “immediately addressing our environmental aspirations” or food security and food price inflation issues.
“Will our metropolitan cousins feel more comfortable knowing there is a green lagoon somewhere or do they want to have a lower price for their bread and meat?” Mr Farley challenged.
“Australia was built on drought and floods; it seems unreal that our environmental assets shouldn’t feel the pinch of drought too.”
Small towns and their residents will certainly feel that pinch, according to Mr Farley, who runs Narrandera-based agribusiness consultancy Matrix Commodities.
“Regional industries will be impacted the most with a big increase in unemployment and under-employment,” he said.
“If you haven’t got the crops to harvest and the animals to tend to, the demand in the service industries won’t be there for things such as fertilisers, spare parts and fuel.
“Small towns will be under severe economic pressure in terms of food, clothing and service provision industries.
“Larger centres such as Albury and Wagga will recognise it but won’t feel it as they have diversity of income streams.”