Farm production value set to dip

The Australian Bureau of Agricultural and Resource Economics’ (ABARES) latest June forecast has predicted more subdued production levels in the farm sector for 2023-24, with ag production value set to contract by 14 per cent to $79 million.

This comes as the Bureau of Meteorology (BOM) issued an El Niño alert yesterday, signaling warmer and drier months ahead.

ABARES said the drop in value implies a return to normalcy and is to be expected after several record-breaking years.

“We are expecting exports to follow suit, falling by 17 per cent to $65 billion in 2023-24, which would be the third highest result on record,” said ABARES Executive Director, Dr Jared Greenville.

“The latest seasonal outlooks see an expectation of drier conditions as we move away from three years of exceptional La Nina weather patterns.

“Looking further ahead, it’s likely we will see either El Nino or a positive Indian Ocean Dipole in the coming months, which will reduce crop yields.”

Crop production in 2023-24 is also forecast to fall by 34 per cent from record production volume in 2022-23. At the same time, domestic prices for most crops are expected to fall in 2023-24.

“Prices both in Australia and overseas will also ease, as global production increases world supply,” Dr Greenville said.

However, it’s not the same story across all industries. Horticulture production is expected to increase by $1.5 billion to reach a record $18 billion, reflecting strong growth in nut production and increasing domestic fruit and vegetable consumption.

“The wine industry will also rebound from a challenging 2022-23, as the expected drier conditions in 2023-24 should reduce the occurrence of disease which reduced the 2022-23 crop,” Dr Greenville said.

“The results are more mixed for the livestock sector. There will be slight increases in production across beef, sheep and milk, but a drop in the value of livestock production to $35 billion in 2023-24 because of lower prices.

“This is down to a number of factors, such as less demand for restocking, and like crops, we expect global production to pick up.”

The wool market is also expected to grow with strong demand coming from China forecast to increase production values by $175 million in 2023-24.