The gross value of Australian farm production is forecast to decrease by 3 per cent to $58 billion in 2018–19, 6 per cent lower than the record production in 2016–17 but still above the 10-year average of $56 billion.
ABARES Executive Director Dr Steve Hatfield-Dodds said that while drought was forecast to affect the production of some commodities—especially crops—increases in farmgate prices and strong production in Western Australia are providing a buffer to the national outlook.
“The annual value of crop production is forecast to decline by seven per cent to $29 billion in 2018–19, driven by a 23 per cent fall in winter crop production nationally, as a result of the drought in cropping regions in New South Wales, Queensland and Victoria.
“Forecasts for an above average winter crop harvest in Western Australia and higher prices for broadacre crops are keeping the value of production from falling further. A lower Australian dollar will also help” Dr Hatfield-Dodds said.
“On the other hand, the value of livestock and livestock products is forecast to increase by two per cent to almost $30 billion. Droughts tend to increase meat production, but high prices for lamb and wool are also forecast to support the value of production.”
“The high cost of feed is a significant challenge for producers in drought affected regions and is resulting in higher than average cattle turn-off across eastern Australia.
“In 2018–19 export earnings for agricultural commodities are forecast to decline by seven per cent to $45 billion. This is largely the result of lower production due to poor seasonal conditions and increased domestic consumption of coarse grains and wheat for feed.”
“The Trans-Pacific Partnership will come into force on 30 December 2018, and is a welcome development for Australian farmers. However, the continuing trade conflict between the United States and China is a key source of uncertainty in the outlook for Australian agricultural exports.”