Ag production forecast hits new high

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has released its latest agriculture outlook today, and has predicted that the farm sector’s gross value of production will hit an all-time high of $90 billion in 2022–2023.

That’s a slight uptick from December 2022’s prediction of $85 billion.

According to ABARES Executive Director, Dr Jared Greenville, this was a fantastic result despite the floods across eastern Australia.

“Australia is benefitting from a third consecutive year of high rainfall, and it shows in the figures,” he said.

“Once again, we’re seeing record levels of production, driven by exceptional growing conditions and high commodity prices.

“The value of production when we include fisheries and forestry, is $96 billion.”

Agricultural exports are also forecast to set new records, reaching $75 billion in 2022–23.

“This is the first time we’ve seen our exports exceed $70 billion, which is a huge achievement,” Dr Greenville added.

“National winter crop production has driven much of these results, with the winter crop estimated at a new record of 67.3 million tonnes in 2022–23. This beats last year’s record by 4 million tonnes and is being drive by exceptional results out of Western Australia and South Australia.

“Production of wheat and canola are estimated to have reached new records, while we can expect the third highest barley production on record.”

Dr Greenville said high values of livestock production have also contributed to these record numbers, with producers increasing their production while also benefitting from historically high prices.

However, these rosy conditions are not expected to continue, he added.

“This year will likely be the last hurrah for the La Nina rain system for a while, and we can expect drier seasonal conditions ahead.

“However, production will continue to be supported by good soil moisture and high water storage levels.”

As a result, ABARES expects production to be lower in 2023–24, at $81 billion, but it will still be the third highest on record.

“Australia has been very fortunate to have had wet years and high commodity prices. But we are expecting commodity prices to ease with competition stepping up in global markets,” Dr Greenville said.

“Recent high international prices have been driven by drought conditions in major exporters and disruptions from the war in Ukraine. But seasonal conditions are expected to improve in major producing regions which will see major exporters getting back on track in 2023–24.

“Over the medium term to 2027–28, seasonal conditions are expected to return to a more normal sequence and commodity prices are expected to fall. The value of agriculture will remain strong, reaching $74.4 billion in real terms.”

However, should global economic uncertainty carry on for longer or there be a shift back towards a drier climate sequence, greater pressure will be placed on sector growth, Dr Greenville said.

“But we’ve had three years to create a buffer and recover from the last drought, so many of our farmers will be well placed to ride out these domestic and international changes.”

For more information, read ABARES’ latest Agricultural Commodities Report and Crop Report.