The COVID-19 pandemic has continued to impact horticultural production including supply chain disruptions to exports and labour availability for the labour-intensive fruit and vegetable production systems. Labour use on NSW horticultural farms was estimated to be 7.3% lower in 2020-21 than in the prior year, reflecting in part constrained labour supply. ⁷⁰ Farmers adapted to this limited supply through changing crop mixes in the case of annual crops to those with lower labour requirements, changed management practices and, where possible, substituted labour with mechanised processes.

Horticultural production was impacted by wet conditions and flooding through many growing regions in NSW both in 2020-21 and 2021-22. With excessive rain for many areas in eastern Australia, production and quality of vegetables and fruit suffered in a number of key growing areas. This led to supply constraints for some horticultural products in domestic markets and in particular for vegetables, with key regions impacted by flooding. Vegetable prices at the retail level, as measured by the consumer price index, increased 16% over the twelve months to June 2022. ¹⁹⁷

NSW nut exports totalled $92 million in 2021-22 with major markets including China, Japan and South Korea and European countries such as Belgium and Netherlands. ³⁵

Australian almond production represented 8% of global production in 2021-22, the second largest producer behind the United States which accounted for 78% of production. ⁸⁰ The almond demand-supply imbalance has seen global prices, based upon US prices, at decadal lows in 2020 and 2021 averaging US$1.71 per pound and US$1.76 per pound respectively compared to the 10-year average to 2019 of US$2.66 per pound. ⁸² Increasing demand as global markets adjust post the COVID-19 pandemic and lower production from California for the 2022 crop over the previous year, are expected to moderate the demand-supply imbalance which should support prices. US almond production from California is anticipated to be 11% lower than last year, with the crop impacted by frosts early in the growing season and continuing drought conditions. ⁸³

NSW almond exports to India and China represented 60% and 33% of total export value in 2021-22. ³⁵ India with its increasing wealth and interest in healthy foods is experiencing growing demand for nut sourced product. Under the recently agreed Australia and India Free Trade Agreement there is a 50% reduction in tariffs for 34,000 tonnes of almonds (for in-shell and kernel) annually, improving Australian product’s competitiveness against Californian product. ⁸⁴ In 2021-22 Australia exported 20,192 tonnes of almonds to India which included both shelled and in-shell. ³⁵

Another uncertainty impacting the 2022-23 almond and macadamia outlooks is the Varroa Mite outbreak reported in NSW in June 2022. ⁷¹ Subsequent biosecurity control measures have resulted in restricted movements of hives into horticultural regions for pollination services for the start of flowering in late winter and spring. Almond trees, and to a lesser degree macadamia which also benefit from native insect pollinators, ⁸⁹ are dependent upon European honeybees for effective pollination. For example NSW almonds require an estimated 81,000 hives for the area planted in 2022. Suboptimal pollination of tree nut crops could impact yields for the 2022-23 production.

Avocado exports, although from a low base, increased in value terms by 150% year-on-year to total $9.95 million. The volume of crop exported rose significantly up from 581 tonnes in the prior year to total 2,195 tonnes in 2021-22. ³⁵ Export markets will be an important factor in countering the increased national supply for avocados which has resulted in significant domestic retail price declines during the seasonal supply peaks, as more trees come into bearing age.

The average national retail price in June averaged $2.11 per single fruit over the three years to June 2020, with the price decreasing over the last two years to average $1.50 per fruit in June 2022. ^{92 93} National avocado production is expected to increase by 30% for the 12 months to September 2022, over the prior 12-month corresponding period. ⁹⁴ In the case of NSW avocado production, production from the main growing regions of Central NSW is expected to decline and be 23% lower over the 12 months period to September 2022. ⁹⁴

The shift in demand for nursery plants arising from the COVID-19 pandemic appears to have been sustained with strong demand from households and community segments. ⁹⁹ However, within an increasing interest rate cycle, the discretionary nature of some of these purchases may impact demand in the outlook period.

Turf production was valued at $146.8 million which was a 27% increase over the 2019-20 value of production. ^{73 74} Contributing to the increase in the value of production were higher turf prices in 2020-21 which ranged from a 9% increase for Buffalo, to 27% for Zoysia and 29% for Couch/Couch Hybrids in 2020-21. ^{100 102} The majority of turf sales from growers is direct to end users (37%) or to landscapers and turf installers (36%), while wholesalers and retailers are smaller sales channels. ¹⁰⁰

Repeated flooding events during 2021 and again in 2022 have had a substantial impact on turf growers which are concentrated close to end markets in the greater Sydney Region and the Hunter. The ultimate impact of such flooding depends upon numerous factors such as, the stage of growth with mature swards close to harvest especially vulnerable, and the species grown. Kikuyu is a major turf species grown in NSW, representing an estimated 35% in volume terms in 2020-21, ¹⁰⁰ and is more susceptible to flood damage than stiffer grasses. ¹⁰³ These flooding events over the two years and their severity is expected to have impacted turf grower production and infrastructure over the outlook period.