Ag production set to dip

Australia’s agricultural sector is bracing for a 2.8 per cent fall in production value in 2025–26 driven by lower crop and livestock production volumes, according to new figures released by ABARES.

The June quarter outlook forecasts a gross production value of $90.7 billion for agriculture alone, or $97.5 billion when fisheries and forestry are included—making it the third-highest year on record despite the dip.

ABARES executive director Dr Jared Greenville said the national outlook remained broadly positive, but outcomes in some regions are hanging in the balance.

“Winter cropping conditions in parts of South Australia, western Victoria, southern NSW and northern WA are at a critical point, especially where crops have been dry sown and there’s little to no soil moisture,” Dr Greenville said.

“The rainfall outlook for these regions is currently positive, which is embedded in our current forecasts, but if not realised creates a downside risk to national production figures.

“Despite the risks, the overall seasonal outlook is positive but is expected to lead to lower production than last year."

Crop production is forecast to fall, with the overall value expected to drop by $2.1 billion. Livestock and livestock products are also tipped to decline in value by $500 million as farmers start restocking, but export prices and demand for Australian livestock remain strong, ABARES added.

Export values are expected to fall by $2.6 billion to $71.7 billion (or $76.7 billion when fishery and forestry exports are included) due to reduced volumes, though this figure also ranks as the third highest on record.

Dr Greenville said export conditions remain favourable despite subdued global demand and shifting trade policies.

“Australian agricultural exports are expected to be supported by tightening global grain stocks, demand for Australian red meat and a relatively low Australian dollar,” he said.

On the ground, farm profits are also forecast to take a hit. Average broadacre farm profits are expected to fall to $141,000, down from recent highs but still above the 10-year average.

In New South Wales, widespread flooding across the Hunter, Mid-Coast and Northern Rivers regions last month has added pressure to the sector, causing losses to livestock, damaging infrastructure, and disrupting milk production across several dairy farms, ABARES said.

While the industry faces risks from weather, trade and global demand, ABARES maintains that the overall outlook for 2025–26 remains solid.

For further details, visit ABARES’ Agricultural Outlook and Australian Crop Report.