ABARES’ agricultural outlook for the new year is predicting the gross value of production to be the second highest result ever recorded
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is forecasting the gross value of agricultural production to rise by $6 billion in 2024-25, to an overall value of $88.4 billion.
Releasing its Agricultural Commodities Report for December 2024, ABARES says this predicted result is the second highest on record and is largely being driven by higher livestock product values, which are expected to increase by $3.8 billion.
Livestock
Livestock prices are recovering from the lows experienced in 2023-24 and are expected to see a 7 per cent increase.
Rising global prices are also expected to encourage higher turn-off rates and production volumes, despite improving seasonal conditions in Australia, as producers seek to meet strong global demand.
By commodity, the increase in livestock and livestock product values reflects higher beef, veal and live cattle – up $3.2 billion – and an increase of $1 billion in sheep meat and live sheep values.
The values of eggs and pig and poultry meat are estimated to see an increase of $380 million, while milk values are tipped to experience a decrease of $740 million.
Lower milk production values reflect lower farmgate milk prices, however ABARES says these remain slightly elevated compared to the 10-year average to 2023–24.
Crops
Crop production values are expected to see significant growth, with an increase of $2.2 billion, and are another factor influencing the positive forecast for Australia’s agricultural production.
An increased of 7 per cent in crop production volumes is expected, while ABARES says improved seasonal conditions relative to last year across Western Australia, New South Wales and Queensland are supporting winter crop production.
Strong production from these regions is predicted to more than offset reduced winter crop yields in South Australia and Victoria as a result of unfavourable spring growing conditions.
The outlook for summer crop production is mostly favourable for 2024–25, however Australian crop prices are expected to fall, in line with the global trend.
ABARES says this is because of higher global exportable supply, falling demand from major importers and waning volatility from the effects of geopolitical conflict.
In terms of different commodities, increases in the value of crop production are being driven by higher wheat and pulse values (both up $1 billion), as well as horticultural values (up $860 million).
Wine grape values are seeing a $100 million increase with higher production and the re-opening of the Chinese market supporting prices.
On the other hand, canola, cotton and sugarcane values are expected to fall.
Exports
Export values are forecast to fall $1.3 billion, with a predicted overall value of $70.1 billion in 2024-25.
ABARES expects lower crop export values (down $3.4 billion) will outweigh expected increases in livestock and livestock product export values (up $2.1 billion).
Despite this, it is still expected that agricultural export values will be the third highest on record.
Although crop production is expected to increase, a 5 per cent decrease in crop export volumes is driving the lower export values, as high carryover stocks from record production years between 2020-21 and 2022-23 have been depleted.
Crop export prices are also expected to moderate (down by 4 per cent), with global prices easing since 2023–24.
Strong global demand for Australian red meat is driving a 5 per cent increase in livestock and livestock product export volumes.
2024-25 is forecast to be the fourth consecutive year of growth in beef and sheep meat export volumes, as the US, China, Japan and emerging markets in the Middle East increase their demand.
Due to this, livestock and livestock product export prices are also expected to rise by 2 per cent. For dairy products, growth in global demand is forecast to outpace global supply.