ABARES forecasts softer year for Australian agriculture

Australia's agricultural sector is set to come off the highs of recent seasons, with the latest ABARES June reports forecasting lower production, exports and farm profitability in 2026-27.

The latest ABARES June quarter reports forecast the value of agricultural production to fall by 5 per cent to $98.3 billion in 2026-27, or $104.5 billion when fisheries and forestry are included.

Agricultural export value is also expected to fall, down $7 billion to $74.8 billion, or $79.3 billion including fisheries and forestry exports.

ABARES says the decline reflects lower crop production volumes and livestock prices, driven by expectations of less favourable seasonal conditions.

High fuel and fertiliser costs are also expected to continue putting pressure on grower returns.

ABARES Acting Executive Director, David Galeano, said farmers’ decisions had been heavily shaped by seasonal conditions and gross margins over the past few months.

“Despite the headwinds facing the sector, farmers who have received favourable rainfall are making the most of the opportunity,” Galeano said.

“However, variable rainfall in summer and autumn has limited area planted to winter crops and pasture growth in some regions. Also, many cropping regions are expected to face drier than average winter conditions.”

The value of crop production is forecast to fall by $4.5 billion to $50.9 billion in 2026-27.

Australian winter crop production is expected to decline by 21 per cent to 54.5 million tonnes, reflecting lower average yields and a fall in area planted.

Summer crop production is estimated to have fallen by 15 per cent to 4.4 million tonnes in 2025-26, although ABARES says this remains well above the 10-year average to 2024-25.

Livestock and livestock product value is also forecast to decline, falling by $1.1 billion to $47.4 billion in 2026-27, down from a record high in 2025-26.

ABARES says higher input costs, lower crop production and lower livestock production are expected to hit profitability, with average broadacre farm business profits forecast to decline by 70 per cent in 2026-27.

“We expect fertiliser and fuel input costs to remain elevated in 2026-27,” Galeano said.

“Farm revenue is forecast to decline due to lower crop and livestock production volumes and lower prices received for livestock.”

Galeano added the value of production overall was remaining resilient, despite input price pressures and broader global uncertainty linked to the Middle East conflict.

The ABARES June 2026 quarter Agricultural Commodities and Australian Crop reports are now available on ABARES' website.