Ag production value and volume reach historic highs

Australia’s farmers are on track to smash production value and volume records in 2021-22 on the back of exceptional seasonal conditions and a surge in world commodity prices, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

In its latest Agricultural Commodities: December Quarter forecast, the organisation is predicting agricultural gross production value for 2021-22 to reach $78 billion - $5.4 billion more than predicted just a few months ago.

Winter crop production is also expected to hit a record 58.4 million tonnes, a healthy jump from last year’s 51.5 million tonnes.

ABARES is also expecting production to increase year-on-year for every major livestock commodity and almost every major crop commodity.

The value of agricultural exports is forecast to hit a record $61 billion.

ABARES Executive Director, Dr Jared Greenville, said Australia was enjoying the perfect combination of favourable conditions and 30-year price highs.

“It would be the first time in at least half a century that production will increase for so many products at the same time,” Dr Greenville said.

“And if these forecasts are realised, 2021–22 will see the largest total volume of agricultural commodities Australia has ever produced."

In addition, prices are also at multi-year highs for many agricultural commodities, Dr Greenville added.

“Higher export volumes and higher prices are forecast for almost every major export commodity, with the total value of agricultural exports being revised up $6.5 billion to $61 billion, also an all-time high,” he said.

“This uplift in Australian agricultural production value and volume is unprecedented and the result of exceptional growing conditions here and poor seasons being experienced by key overseas competitors.”

However, he warned these rosy conditions might not last.

“There is uncertainty how long prices will remain at these levels – and supply chain disruptions, higher fertiliser prices and heavy rainfall domestically will continue to be watch points,” Dr Greenville said.

“This forecast accounts for the unfortunately timed substantial rainfall and localised flooding in east coast growing regions during November.

“This will delay harvests and result in some crop losses, but this is unlikely to reduce national harvest tonnage significantly.

“The larger impact will be on grain quality, with a higher than usual proportion of the crop being lower-value feed-grade wheat.”