Weather cycles are becoming shorter and more extreme, fruit and vegetable giant Costa says.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Victorian-based Costa said the recent drought had highlighted that and it had adapted its business model to meet climate change challenges.
In financial results documents which showed the group made a $33.8 million after tax loss for 2019, Costa said it partially mitigated against weather risk by investing in weather protective growing environments and equipment.
About two thirds of its produce-related earnings came from crops grown under cover indoors or under permanent tunnels.
Costa, which has berry farms in in Tasmania and also operates in the mainland states, China and Morocco, said protected cropping reduced the risk of disease and the impact of weather, but the risk was still relevant.
"Changes in climate also have the potential to have an adverse impact on Costa's business," it said.
"Costa has sought to manage the impact of this risk by increasing the geographic diversity of its operations, both within Australia and internationally."
It said it was developing and implementing more strategies to manage the risk.
The company said it was focusing on increased use of renewable energy and had worked on water security.
Chief executive Harry Debney said drought and weather events in the second half of the year led to significant challenges.
Costa last year decided to close its Spreyton mushroom farm and another site in Queensland in favour of more modern facilities at Monarto, South Australia.
"The closure of old, high-cost mushroom growing facilities in Queensland and Tasmania was completed in November-December, retiring circa 65 tonne per week of production ahead of the new Monarto volume coming on line," Costa said.
Costa said its business fundamentals remained strong despite the recent challenges and initial 2020 trading had been positive.
"Pricing levels have improved considerably across most categories, particularly berries and mushrooms, and the outlook for the upcoming Far North Queensland berry season is favourable," it said.
"Early season performance from the international segment has also been positive.
"The impact from the coronavirus outbreak is currently unknown, with peak volumes in China to be harvested from March."
