In the face of upcoming drier conditions, the Australian agricultural sector continues to demonstrate resilience and strength.
According to the recently released ABARES Agricultural Commodities and Crop Reports, the sector is predicted to achieve the third-highest yearly gross value on record in 2023-24, with a projected production value of $86 billion.
ABARES executive director Dr Jared Greenville highlighted that despite the challenges, the agricultural industry remains robust.
“After a record $92 billion result in the 2022-23 financial year, the forecast 14 per cent decrease will see the value fall to $80 billion in 2023-24 because of drier domestic conditions and an expected fall in global commodity prices,” Dr Greenville said.
As Australia transitions from a higher rainfall La Niña period to a drier El Niño climate, it is expected that below-average rainfall and warmer temperatures will impact crop yields and production. Consequently, the total crop production value is projected to decrease by 20 per cent to $46 billion in 2023-24.
The southern cropping regions are holding up relatively well due to better-than-expected winter rainfall, while the northern cropping areas are currently experiencing the greatest impact from the drier conditions. Additionally, although summer crop plantings are expected to decline compared to the previous year, they are still anticipated to remain above average, thanks to sufficient water storages compensating for lower spring and summer rainfall forecasts.
“Drier conditions will also mean livestock producers will need to send more animals to slaughter. As supply increases, saleyard prices for cattle and sheep are expected to fall; sheep prices are forecast to fall below their long-term average.
“At the same time, global meat prices are falling. These factors will mean despite higher production volumes, the value of livestock production is expected to fall by $1.6 billion to $34 billion in 2023–24,” Dr Greenville said.
The impact of production and price outcomes will extend to agricultural exports, with a predicted 17 per cent decrease in the value of agricultural exports to $65 billion.
Farmers are additionally grappling with elevated input costs, including fertiliser, diesel, and labour. And high-interest rates are increasing the costs of debt repayments.
However, it is crucial to acknowledge that these challenges come after record-breaking years that have allowed for the rebuilding of financial reserves. The agricultural sector in Australia remains resilient and competitive, even in the face of adversity.
