ABARES has provided its latest agricultural outlook, with reasons for optimism about the year ahead
Australian agriculture is set for a positive financial year ahead, with average farm cash incomes tipped to rise considerably in 2024-25, along with a boost to the nation’s overall agricultural production.
These are just two of the findings from the Australian Bureau of Agricultural and Resource Economics and Sciences’ latest agricultural outlook.
After broadacre farm cash incomes took a major hit this financial year, ABARES is tipping the average to increase by 47 per cent in 2024-25.
Potential improvements in growing conditions for winter crop production, along with predicted increases in beef and sheep prices, are described as drivers for this income boost.
This forecast would mean an average income of $192,000 per farm, although ABARES notes this is still more than 50 per cent below the record levels of 2020-21 to 2022-23 in real terms.
Elevated input costs, lower crop production volumes and lower livestock prices are cited as reasons for average incomes not returning to these previous levels despite the predicted spike.
National lift
ABARES has tipped the nation’s agricultural production value to increase by about 6 per cent during the 2024-25 financial year, or about $5 billion in real terms.
This would represent a national output of $85 billion – or $91 billion once fisheries and forestry is included.
The National Farmers Federation has previously stated a goal of reaching $100 million in farmgate output by 2030.
According to ABARES’ five-year projection, much work still needs to be done in order to realise this ambition.
ABARES tips an initial increase in production values, followed by declines in 2026-27 and 2027-28, before another increase to reach $84 billion in 2028-29.
“This is brought about mainly due to the assumed climatic conditions in each of the forward projection years driving the level of domestic production, with assumed wetter years likely to support higher crop production and pasture growth for grazing,” the ABARES report says.
“The true pattern of change and ultimate production outcomes over the medium term will be determined by the realised conditions.”
Australia’s national production for the current 2023-24 financial year is tipped to be $80 billion – or $86 billion if fisheries and forestry is included – which represents a 15 per cent drop on the previous financial year.
Crop chop
While many of these figures represent a significant year-on-year drop, ABARES says they also need to be considered in comparison to longer-term numbers.
Drier conditions last winter and in early spring are expected to have reduced Australia’s 2023-24 national winter crop by 32 per cent, creating a total output of 46.7 million tonnes.
Despite that, this figure remains on par with the 10-year average, while Australia’s summer crop is above average despite a 17 per cent year-on-year fall.
The total summer crop is tipped to be 4.3 million tonnes, more than 20 per cent above the 10-year average of 3.5 million tonnes.
Better than expected seasonal conditions during late spring and summer in Queensland and northern New South Wales have provided a boost, and meant ABARES revised its forecast up from the previous quarterly outlook.
Crop production forms more than half of Australia’s total output, contributing an expected $48 billion in 2023-24.
This figure represents an 18 per cent drop on the previous year.
It is then expected to rise 2 per cent to $49 billion during 2024-25, with increased production volumes tipped to offset lower expected prices.
Stocks rise
Much of Australia’s expected production value increase in 2024-25 is tipped to come from livestock.
Prices are forecast to rebound next year, ABARES says, returning close to long-term averages.
This rebound in saleyard prices is expected to drive Australia’s livestock production gross value to a $36 billion result in 2024-25, a 12 per cent increase on the previous year.
Cattle and calf production value is forecast to increase from $11.6 billion to $14.6 billion, prompted by a 21 per cent annual price increase.
Sheep and lamb prices should return to 2022-23 levels in nominal terms, according to ABARES, with the production values tipped to increase by $758 million to reach $4.3 billion overall.
Wool production is tipped to increase as well, with strong international demand triggering higher prices and causing production value to rise by about $130 million to reach $3 billion.
Pig and poultry meat, plus egg production, is tipped for a 2 per cent increase which ABARES says is broadly in line with population.
Milk production value is forecast for a fall of $420 million to $5.5 billion, as relatively low export prices reduce farmgate prices.