R&D Edition: The growers earning $20k/ha extra, VegNET drone spraying demo

Vegalogue is a podcast from Australian vegetable peak industry body AUSVEG. Each episode we take a look at issues affecting the Australian vegetable, potato and onion sectors, unpacking levy-funded research and meeting some of the incredible people who make up the vegetable industry.

This episode, we discuss:

• The common factor driving a $20,000 per hectare difference between Australia's most profitable vegetable and onion growers and the industry average, as discovered by the Level Up Hort project.
• An aerial drone spraying demonstration night run by VegNET Gippsland.

Guests:

• Paul Omodei, Director of Horticulture and Agronomy, Planfarm
• Emily Scott, VegNET Regional Development Officer, Food & Fibre Gippsland
• Cherry Emerick, VegNET National Coordinator, AUSVEG
• Adam Schreurs, Director, Schreurs & Sons

Learn more about the projects discussed in this episode:

• Level Up Hort - National vegetable and onion benchmarking program (MT22009)
• VegNet 3.0 (VG21000)

Thanks for listening to Vegalogue! You can find out more about AUSVEG and the Australian vegetable industry at ausveg.com.au. Subscribe to our newsletter, or follow us on Facebook, LinkedIn, Instagram, Tik Tok, or Twitter/X.

Chapters

• 0:36 Level Up Hort
• 8:55 VegNET drone spraying demonstration

Transcript

It's just under $20,000 a hectare of EBIT margin, so earnings before interest and tax, between the most profitable and the average of the industry.

So that's really important number, because that's quite big.

Welcome back to the Vegalogue Podcast, a dialogue about the Australian vegetable industry from AUSVEG.

I'm Tom Bicknell.

This episode, we'll be hearing about a recent VegNET workshop where Victorian grower Schreurs and Sons open their doors to display their drone spraying tech to fellow Gippsland growers.

But first, we're gonna hear how the most profitable vegetable and onion growers in Australia differ from the average, as well as some of the surprising similarities between growers.

Despite the impact of vast geographic and climatic differences, the biggest variable in growers' financial outcome is mindset, according to a project that's benchmarking the performance of growers around the country to help them improve their businesses.

Regular listeners may remember our story on the National Vegetable and Onion Benchmarking Program last year.

Since then, the program has rolled out to growers across the nation, and it's also come up with a snappier name, Level Up Hort.

The project is being led by Planfarm and supported by RMCG.

And at the recent Hort Connections show in Melbourne, I caught up with project lead Paul Omodei, Planfarm's Director of Horticulture and Agronomy.

All right, I'm speaking today with Paul Omodei from Planfarm here.

Paul, thanks for joining me.

You've just presented at the Hort Connections conference here, and you were speaking about the Level Up Hort project, which is in year one of five years.

Could you give us a quick summary of the project for anyone who's not familiar with it?

Yeah, thanks, Tom, and nice to be here.

Level Up Hort is, like you said, a five year project that goes across Australia, and it's for vegetable and onion growers.

So it'll be a one to one grower support with a consultant, generating business analysis, one to one advice on that, and then we culminate that with a benchmark report each year, each year increasing the number of growers, hopefully getting to the point where we'll be able to benchmark state by state, and then national across all vegetables and onions.

And you mentioned in your presentation there was about a $20,000 per hectare EBIT difference between the best growers and the average growers.

Is that, have you noticed, I guess, any key differences between the best and the average growers, or is it a collection of lots of small things?

Yeah, really good question, and look, that is the, you're dead right, it's just under $20,000 a hectare of EBIT margins, so earnings before interest and tax, between the most profitable and the average of the industry.

So that's a really important number because that's quite big.

And I think in terms of what we notice with the growers, it's the collection of small things that actually make a big difference.

So they include fertiliser, chemical spend, seedlings, labour, a big one in terms of labour costs per hectare, and probably not what everyone thinks, that it's less.

So yeah, it's a collection of things, but I think one of the key benefits that we've seen, or the things, attributes, sorry, not benefits, that we've seen between growers that are the most profitable, is just their attention to detail around particularly the number of products they grow and making sure there's a focus on that, but also around financials and production recording.

So they've generally been the ones, the growers, easily to deal with, because they have the data and we can analyse it very correctly.

You also mentioned in the presentation that the best growers have a slightly higher labour cost.

Is that something that I guess you were expecting, or has it been a bit of a surprise?

I think it's common with what we've seen from Western Australia.

So we've been doing this for seven years in Western Australia.

So it's actually quite common that we now see the most profitable growers spending more per hectare on labour.

And that includes owners' labour.

So if you're an owner in the business taking drawings, then we actually make sure we count part of that as the operating cost, because otherwise you're not really reflecting what people are doing in the business.

So generally speaking, the most profitable do spend more per hectare on labour.

What that does do, though, is that because they're generating more income, their labour cost as a percentage of income is less.

So as an example, the most profitable, the average in the group of the most profitable group spend about 31% of income on labour.

The average of the industry spends 41%.

So there's a combination of lower income in the average of the industry, but also the fact that they are actually spending less per hectare, but that amount as a ratio is higher as a percentage of income.

So that means that the most profitable have got more left over to actually put towards profit.

And you mentioned you spent seven years doing this in Western Australia before it became a national project.

So the precursor was funded out of WA and focused on WA growers.

Now you've moved nationally.

Have you noticed any, I guess, differences between states and territories as you've rolled it out across the country?

Yeah, really good question.

I think similarities in getting that trust and being able to sit with a grower and get them to understand or help them understand what's happening in their business is a similarity.

So that's a challenge, but it's only one that we're used to.

In terms of differences, I think that there's probably a little bit more tech development, I would say, if there's anything to put my finger on it, I would say there's a little bit more tech development in the East, probably seems to be a little bit further in front.

And that's just around, I'm not saying they don't do it in WA for sure, but that's just a bit around how they manage labour, recording that, a bit around drone technology and what they're using it for.

So I think it's still there in WA, but certainly just seems to be a little bit more advanced.

So I think, if anything, I would say that may be the only difference.

In terms of revenues and those sorts of things, costs per hectare, actually very similar when you get to be the most profitable or the average.

So yeah, across Australia, probably not so many differences at all.

And looking at a project like this, growers are sharing a lot of confidential data.

I guess they're putting some skin in the game and you do a lot of work making sure that data is anonymised.

Have you had a lot of success getting growers on board with the project?

We haven't quite hit our target in the first year of national, which was 50 growers.

So we haven't quite got there, but very, very close.

So I think that's a really good effort when we've got really good partners in RMCG, another consulting business based in the east.

And they've got presence in Victoria, New South Wales, Tasmania and southern Queensland.

And Plan Farm takes the presence in WA, South Australia and northern Queensland.

So I think in terms of getting the growers, I think again, it's about that one-to-one relationship that you have with a contact or a connection and building that trust to actually get that information out of them.

I think, Tom, what's really key for us is that the grower gets an independent report which is about their business.

They get an independent benchmark report which is about their business.

That data then gets de-identified, so they get a number, like we said, goes into a database, and so no one can determine whether they grow a certain vegetable, they're a certain size or based in a certain state.

And so that's an amenity that we need, simply because any sort of leak in confidentiality means that one, the project's gone, but also more importantly for RMCG and Planfarm is our businesses, which are servicing growers, is really in threat.

So confidentiality is king for us, and we can just assure growers that their information is their information.

Fantastic, and what's next for the project?

Next for the project is our next round of recruiting growers, so each year, we've got a target to increase growers.

We hope to, at the end of five years, get to 150 businesses across Australia.

So that will be a really large data set, never seen before in Australia, horticulture of vegetables and onions.

So we're recruiting at the moment, so interested growers who are keen to at least talk to us and see what it might mean for their business.

Certainly get onto the website, Level Up Hort.

Contact the consultant in the nearest area, and we'll be happy to chat.

Fantastic, thanks very much, Paul.

Thanks, Tom, good on you.

This project is funded by Hort Innovation using the vegetable and onion industry research and development levies and contributions from the Australian Government under project code MT22009.

Getting hands on with new technology and asking questions of an experienced user is perhaps the best way to understand if it's the right fit for your operation.

Around the country, regular workshops and demonstrations into new technology and R&D are run by original development offices from VegNET, the National Vegetable Industry Extension Program, coordinated by AUSVEG.

These events offer a way for growers to get a firsthand look at new tech and talk to other growers about its practical application.

I recently had a chance to attend a VegNET demonstration of aerial drone spraying in Gippsland in Southern Victoria and had a chat with the team that brought the event together.

A recent agricultural drone demonstration in Victoria run by VegNET Gippsland highlighted the role of VegNET Regional Development Officer plays in bringing information and knowledge to the local vegetable grower community.

Organised by Gippsland RDO Emily Scott, part of the Food and Fiber Gippsland team, the recent drone spraying demonstration night aimed to give growers a firsthand look at the technology and how it can be applied on farm.

The event was hosted on the Middletown property and property of third generation growers, Schreurs and Sons, and sponsored by Syngenta and EE Muirs and Sons.

The evening demonstrated that spraying can be achieved without disturbance to soil and crops, with potential for greater efficiencies in chemical use and labor, reduced disease spread, and a safer operating environment for workers.

Emily says the drone demo brought together about 60 growers and agronomists from the region to see firsthand two large drones conducting low-level aerial spraying with a fluorescent dye.

After dark, the growers were able to walk through the sprayed crop with UV lights, clearly showing the spray pattern from the drones.

Yeah, so tonight, VegNET Gippsland has hosted a drone spray demonstration night in partnership with Schreurs and Sons, Syngenta and EE Muirs, who were kind enough to throw in some beers for everyone to have a drink with the barbecue.

The night's really been focusing on a comparison between tractor-mounted and drone-mounted spray applications, and we'll head out tonight to have a look at, under UV light, the spray patterns as a comparison.

You know, we had a really tough summer season this year in Gippsland with multiple heavy rain events, multiple flooding events, multiple hail events, and a lot of the growers lost significant crop because they just couldn't get onto the fields because it was just too wet, too muddy, it was unsafe.

And so in that period of time, a lot of growers became really interested in drone technology and what it can offer.

And so this was just, you know, really perfect timing to have an event like this.

That really tough summer we had has been a catalyst to get so many people here.

And I think, you know, drones are definitely going to be a part of the future of a lot of farms that have come here tonight.

Events are a cornerstone for VegNET RDOs to bring together growers and industry partners to increase knowledge and awareness of the latest R&D in technology and a great opportunity for networking.

VegNET National Coordinator, Cherry Emerick, says that each RDO works with their regional partners and regional extension advisory group to review and determine what the priorities are for the coming year, as well as leaving scope for unforeseen issues such as biosecurity risks.

Every region is completely different, and every issue is very different.

So I guess the main purpose is that we look to getting growers to where they can be a sustainable and growing healthy business.

And a lot of that can be to do with R&D and getting them to come to events like tonight here.

Host for the drone demonstration and co-director of Schreurs and Sons at Middle Tarwin, Adam Schreurs says hosting the event was in part to measure for himself the performance of the drone spraying that the business had been running for two years, but also to give other growers an opportunity to see the system in use firsthand and ask questions of the experts.

So there's been so much interest from growers and like-minded people that I get along well with.

And rather than having them all come out individually and look that we can get them all here at once and have a look, I've been to quite a few different demonstration days and seminars and things like that, the VegNET run, and find them all very valuable.

There's always something you get out of them and something that you learn that you may not even know you didn't know before.

It's not only a good learning night, it's a good social event to catch up with all the other growers and bounce ideas off one another and learn from each other's operations and what they're doing and their mistakes and the good parts about what they're doing.

So yeah, I think we all talk and we can all learn something from each other.

The VegNET 3.0 project is funded by Horn Innovation using the Vegetable Industry Research and Development Levy and contributions from the Australian Government under project code VG21000.

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Vegalogue is produced by AUSVEG, the peak industry body for Australian vegetable growers.

You can find more news and information from AUSVEG at ausveg.com.au on our social media channels or in Australian Grower magazine.

Thanks for listening to Vegalogue, the podcast that roots around for 24-carrot gold stories.