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Farm production to fall following record breaking year

The gross value of Australian farm production is forecast to fall almost 9 per cent to $58 billion in 2017–18, primarily reflecting a decline in crop production, according to the Agricultural Commodities, September quarter 2017 report.

ABARES Chief Commodity Analyst, Peter Gooday, said the outlook had been affected by mixed seasonal conditions.

“The fall in the total value of farm production is driven by a forecast decline of 39 per cent in total winter crop production, as yields fall from the record highs achieved in 2016-17,” Mr Gooday said.

“This is around the 10 year average for winter crops to 2015–16, but there is substantial variation in crop prospects across the country.

“For livestock we are expecting a 1 per cent rise in the value of production.

“Cattle slaughter is forecast to rise after two years of declining turn-off, however prices are expected to fall as domestic supply increases and we face increased competition in export markets.

“Sheep and lamb prices are forecast to rise supported by restocker demand and lamb slaughter is forecast to increase.”

Farm export earnings are also expected to fall from the highs of 2016-17 to be 7 per cent lower at a forecast $45 billion in 2017–18.

“The forecast decline is driven by a 16 per cent decrease in export earnings for crops to $23 billion, reflecting lower forecast production.” Mr Gooday said.

“Export earnings for livestock and livestock products are forecast to increase by 4 per cent to $22 billion. Income growth in Australia’s major export markets is supporting demand for Australian meat, wool and dairy products.”

Export earnings for fisheries are forecast to remain unchanged at around $1.4 billion.

In Australian dollar terms, export prices of barley, cheese, lamb, wheat, wine and wool are forecast to increase in 2017–18. Export prices for beef and veal, canola, chickpeas, cotton, live feeder/slaughter cattle, sugar and rock lobster are forecast to fall.

Source: Australian Government

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