For the first time, the value of Australian food and fiber exports is expected to exceed $70 billion as good weather conditions and high prices continue for farmers.
- Good conditions and high prices combine to create a record forecast for agricultural exports
- Australia’s winter crops are expected to yield over 55 million tonnes
- China’s slowing economy and high cost of fertilizer present ‘headwinds’ for Australian farmers
But the value of overall agricultural production will decline slightly, from $85 billion in 2021-22 to $81.8 billion this year, according to the Australian Bureau of Agricultural Resource Economics and Science (ABARES).
“[What] we expect this to be the second highest production year ever, with the sector value expected to reach $82 billion,” said ABARES Executive Director Jared Greenville.
“That’s down slightly from what we saw last year of $85 billion, but it’s still a really significant performance when you consider just a few years ago, in 2020- 2021, we were looking at $73 billion.”
The latest ABARES forecast, which was released today, shows that agricultural export earnings will increase by 5% to $70.3 billion in 2022-2023.
“That’s almost 50% more than 10 years ago after adjusting for inflation,” Dr Greenville said.
The government’s commodity forecaster expects 55.5 million tonnes of cereals to be harvested this year, which would be the fourth highest on record.
It projects that $11.7 billion of wheat, $10.2 billion of beef and $7 billion of cotton will be exported from Australia in 2022-2023.
The challenges of the agricultural sector ahead
Good growing conditions are expected to continue, but Dr Greenville warned that global inflation and rising crop production costs could hamper farm incomes.
Dr Greenville says there are some “global headwinds” that we have seen play out.
“The outlook for global inflation and the outlook for global economic growth looks a bit gloomy overall,” he said.
“And so they’re impacting the demand for Australian products, and in particular some of our fiber products, but also some of our meats and other higher value products.
“Global food and fertilizer prices remain very high despite falling from the highs of early 2022.
“The World Bank expects high global food prices through the end of 2024, which will have negative implications for global food security.”
The latest ABARES forecasts note the heightened biosecurity risks posed by recent detections of lumpy skin disease and foot and mouth disease in Indonesia.
“If an outbreak of either were to occur in Australia, the economic consequences for livestock production and exports could be severe,” he said.
“An outbreak would jeopardize the export of many (if not all) livestock and livestock products.”
High value employees
Dr Greenville said crops and red meat will continue to be big earners for Australian agriculture this year.
“Wheat is up there again with very high production values and high export values on the back of high expected production, but also these very high world prices,” he said.
“In red meat, we are starting to see the rebound and rebuilding of the herd and the herd, and our national herd and our national herd are back to pre-drought levels – to the levels we saw in 2018.
“It’s a really impressive type of reconstruction in such a short time.
“The other thing is that with cotton, we’ve had good yields with cotton in terms of low water prices, and also great water availability and that’s translating into high production levels .
“Cotton production is expected to drop a little this year, but we will export a lot because we had a big harvest last year, which could not be exported, and we will follow that up with another big harvest.
The value of horticulture will reach $14 billion in 2022-2023.
“Horticulture has stood out for a few years in terms of growth, and it has almost doubled in size over the past 20 years,” Dr Greenville said.
“We expect horticulture to expand again this year, and it will be somewhat tempered by the availability of labor, after the persistent labor shortages that were created at the following COVID.”
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