The latest Agri Insights research from Commonwealth Bank reveals Australian farmers are concerned about energy costs and are looking to energy efficiency on-farm to manage costs.
As part of its ongoing research program, the bank questioned farmers across the country on their views about energy costs, reliability and how they might improve energy efficiency in their operations.
Regional and Agribusiness Banking Executive General Manager Grant Cairns said the survey of farmers across the country shows that energy costs are a serious concern for many.
“Four in five Australian farmers have told us that cost is a bigger issue than reliability and more than three-quarters of them say they feel like they don’t have control over energy costs on farm,” Mr Cairns said. “While drought is clearly the leading concern for a number of our farmers right now, we know that across the industry, farmers are taking a medium- to long-term view, and managing energy costs remains an important goal.”
Listen to the latest Agri Insights from Grant Cairns
- National Agri Insights part 1
- National Agri Insights part 2
- NSW Agri Insights
- VIC Agri Insights
- QLD Agri Insights
- WA Agri Insights
- SA Agri Insights
- Tas Agri Insights
Dairy farmers were the most likely to say they can’t control energy costs, with 91% reporting they do not have any control, followed by 87% of those in cotton. South Australian farmers are the most likely to say they have some degree of control over costs with nearly a third (28%) saying they do.
“Energy costs have a significant impact on the bottom line for all businesses, and farms are no exception,” Mr Cairns said. “We’re hearing from farmers that energy costs account for up to nearly 15% of their farm input costs. That’s a major business outlay and something farmers are definitely keen to manage, to the extent that they’re able.”
The research found that energy chews up 14.6% of the inputs budget for cotton growers, and 14.1% for dairy producers. Overall, farmers nationally reported an average of 11.4% of their inputs spend goes to energy.
Video from IB Logistics case study - read more below
“In a bid to take back some control and better manage costs, farmers are looking to energy efficiency solutions, and especially to solar power,” Mr Cairns said. “Right across the country, solar with battery back-up tops the wish list for farmers interested in investing in energy efficiency.”
There is widespread interest in energy efficiency investment, with more than nine in 10 surveyed farmers declaring some level of interest and 41% describing themselves as very or extremely interested.
West Australian farmers are most keen, with 46% saying they are very or extremely interested, while cotton is the sector most eager for energy efficient investment, with 53% of growers saying they are very or extremely interested in investing in energy efficiency.
Of those farmers who expressed an interest in investing in energy efficiency on-farm, more than three-quarters put solar with battery back-up at the top of their list.
“The overall picture here is one of concern tempered by the practical and forward-looking approach we usually see from farmers,” Mr Cairns said. “Energy is a challenge, but farmers are looking at ways to address it.”
Key research results:
- 81% of farmers say cost is a bigger concern than reliability
- 78% of farmers nationwide say they do not have control over energy costs; 91% of dairy farmers and 87% of cotton farmers say they feel they do not have any control of energy costs
- 92% of farmers expressed some degree of interest in future investment in energy efficiency on their farm
- 76% of Australian farmers say they’d like to invest in solar with battery storage
- On average, farmers say energy costs make up 11.4% of their operational expenditure on farm inputs, with 22% describing the impact of energy on their bottom line as significant and 61% as moderate or significant
Read the latest Agri Insights research.
Case study: IB Logistics, QLD
Simplicity equals efficiency for cane contractor
Technology is often touted as the way forward for a more energy efficient agribusiness sector, but contract sugar cane harvester Dale Bray from IB Logistics is finding that simple can be better than complex.
Tractors have traditionally been the machine of choice for the cane haul-out process, but as tractors have become more sophisticated, contractors have started moving towards more efficient transporters that are designed specifically for haul-out.
Dale says the task-specific transporter, designed and manufactured by another Queensland business, Agri-Con Equipment in Bundaberg, is just what he needed in his growing business.
“We harvest about 650,000 tonnes of cane per season from Tully across to the Atherton Tablelands,” Dale says. “We had been running up to four haul-outs with each harvester, but because the new machines are simpler, more manoeuvrable and have a faster cycle time, they’re much faster, so we only need two or three per harvester,” he says.
Between dropping a machine from each crew and the higher fuel efficiencies the new transporters deliver, Dale says the switchover is delivering measurable business results. The machines have an approximate energy saving of 30% due to improved cycle time, the number of units used and better fuel usage per hour.
The haul-out transport has been around for a while, but Dale says it’s only been in more recent years that it has really stood up as the better business choice.
“The technology has been around for about 25 years. In that time, we’ve seen the cost of tractors double, while their reliability has become less certain in this type of work.
“Cane is a really tight-margin industry, so you have to really know your numbers and make good decisions. As we were turning over equipment we were looking at fuel efficiency and energy usage as well as longevity and hardiness of equipment. The point has definitely arrived where a specialist unit like the transporter, which is much more fuel efficient and allows us to reduce our overall equipment requirements, is the right choice for us.”
Dale currently has four transporters and plans to add more to his fleet.
“The industry is pretty sound, especially in the Tablelands, so we’re continuing to invest in streamlining our operation and doing a good quality job for our customers. We will continue to switch to one new transporter each season as we replace equipment, so we can increase our efficiencies.”
Dale bought his transporters using CommBank’s Energy Efficient Equipment Finance Facility, which offered a discounted interest rate and an extended repayment term.