As farmers rush to make the most of healthy rural sector earnings and tax incentives encouraging farm infrastructure upgrades, unease is brewing about the sort of price rises they are expected to absorb on some investment projects.
In particular, the cost of common Australian-made steel products used in farm shedding has attracted scrutiny and concern.
Zincalume steel sheeting has increased in price by almost 35 per cent since May last year, according to shed builders, and another 8pc rise is flagged by BlueScope Steel's roofing and steel building products business, Lysaght, from September 1.
Lysaght's Galvaspan steel, used as girts and purlins to hold roofing and wall panels, has risen 42pc in the same period and goes up another 5.5pc in September.
A host of other products from Colorbond sheeting to high tensile zinc-coated Deckform steel used for structural decking, have also been slated for price rises of up to 8pc in coming months after varying increases since March last year.
However, the soaring cost of Zincalume, commonly used for roof and wall sheeting on most farm sheds, has particularly irked building companies and their customers.
It has rapidly, and suspiciously, become at least as expensive as stylish urban roofing favourite, Colorbond.
Until 18 months ago Colorbond was typically at least 15pc more expensive, partly because it was produced in a diverse colour range and required additional handling.
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Although made at the same Port Kembla steelworks using very similar processes, Colorbond prices are up just 13.4pc since March 2021 - less than half that of Zincalume.
By September Zincalume steel, an aluminium and zinc alloy coated galvanised sheeting, will cost roofing and shed customers roughly 8pc more than Colorbond.
"I can't get any explanation. It smells like price gouging to me," said national wholesale manager with family-owned Now Buildings, Trevor Walker.
The business supplies about 750 sheds a year, Australia-wide.
"We've asked untold times why farmers are copping it in the neck to buy a product which, as far as we understand, has always been cheaper to produce and distribute," he said.
"Unfortunately, I feel this sort of thing is happening a lot in the ag sector at the moment.
"Some suppliers are thinking average farmers are making a bit of money and want new gear so they can afford to pay more."
Ag subsidises home market
Mr Walker said such extreme price differences and increases in the residential building sector would have "everybody making a noise", but it appeared rural sector demand was quietly expected to subsidise a premium housing market product.
He calculated upcoming price rises would effectively mean almost $4000 had been added to the typical $15,000 cost of Zincalume sheeting used in one of his sheds in the past year.
On average, a mid-sized farm machinery or hay shed costs about $40,000 in total.
He said 95pc of Now Buildings' customers were farmers, and 90pc of them ordered galvanised structures to match existing shearing sheds and workshops because they looked authentic as they aged, and Zincalume did not show scratches, dents or weathering as obviously.
NSW-based State Wide Sheds principal, Richard Watkins, said there appeared no end to likely price increases from steel manufacturers, citing a recent Lysaght letter which warned economic volatility meant further price changes on products and services may occur in coming months.
Multitude of costs
He said steel price hikes came on top of a 40pc rise in insulation blanket prices in December, freight increases in April and more to come, labour shortages and other inflationary pressures in the industry.
"The Colorbond price makes me quite cynical," he said.
"I think the housing boom and tight construction market has made it harder for BlueScope to get away with raising that product's price too much.
"Unfortunately, nowadays we're all caught by big supply and demand problems which would be easier to cope with if steel production hadn't been halved at Port Kembla and Whyalla in recent years.
"Farmers generally want Australian products, but a lot of steel, particularly structural stuff, just isn't available."
His thoughts were shared by eastern states silo builder, Andrew Kotzur, who has waiting lists for orders stretching out more than 12 months, but struggles to source enough local raw material for the booming grain storage sector.
"Some heavy material is just not produced in Australia any more - we're seeing imported steel which has never been here before because our particular market is considered low volume to local steel makers."
However, he also accepted Kotzur Silos' COVID-era demand and supply challenges may not be so different to other industries, from healthcare to the transport sector.
Despite repeated requests for comment on shed builders' concerns, supply and demand issues, and prices, BlueScope officials would not respond for this article.
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