Farm production takes a dip after record year

Following a record-breaking year, Australia’s agricultural production and export values are expected to fall back to normal levels this financial year, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)’s latest commodities report.

The net value of farm production is expected to fall five per cent from 2016-17’s bumper figure of $62.8 billion to $59 billion, while export earnings will take a four per cent dive to $47 billion.

According to ABARES Executive Director, Dr Steve Hatfield-Dodds, the fall in value is no cause for alarm, but rather a “return towards trend”.

“Our price projections for the next five years are influenced by two key drivers. Global crop production is trending down from the very high levels of 2016–17, but is expected to be enough to keep stocks high and prices low out to 2022–23, provided no major supply shocks occur,” he says.

Livestock production value is expected to increase by two per cent in 2017-18, driven by global demand for sheep meat, lamb, wool and dairy.

“The US beef cycle has moved to a phase of increased production, intensifying competition in Australia’s export markets,” says Dr Hatfield-Dodds.

“For the period to 2022–23, we project this will keep prices below the recent highs associated with US production bottoming out in 2015–16.

“With this flat outlook for prices, growth in the value of agricultural production and exports will come mainly from increased volume, underpinned by rising demand as incomes and populations in importing countries grow.”

ABARES is also predicting a positive outlook for the agricultural sector moving forward, with the gross value of farm production set to increase by an average of 1.2 per cent per year to reach nearly $63 billion in 2022–23.

Farm export values are forecasted to reach $50 billion by 2022–23.