Ag rebound after COVID-19, Drought

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Australian farms will produce more overall in 2020-21, but farmers will need to focus on restocking after years of drought, according to a government report.

ABARES acting executive director Peter Gooday
ABARES predicts the value of farm production will increase "modestly" to $61 billion in 2020-21

Australian agricultural production will be impacted more by the process of recovering after years of drought than from the effects of COVID-19, according to the latest report from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

In its June Agriculture Commodities report, ABARES predicts the value of farm production will increase "modestly" to $61 billion in 2020-21, which acting executive director Peter Gooday says will be the third straight year over $60 billion.

"This is driven by a strong forecast rebound in grain production, up 15 per cent to $30.8 billion," he says.

To read in more detail about what ABARES predicts for Australian crops, click here

However, he adds that the higher production will coincide with a global economic slowdown – meaning most commodities will likely fall in value – with the exception of red meat, still boosted by the impact of African Swine Fever in Asia.

"As we recover from drought, the value of farm exports is forecast to fall by around $2.7 billion to $44.4 billion in 2020–21, driven by falling meat exports and the rebuilding of domestic grain stocks," he says.

"Meat and live animal exports are forecast to fall by $3.5 billion and while exports of grain are expected to increase by almost $2.3 billion, over 4 million tonnes of the 2020–21 grain harvest is expected to be retained to rebuild domestic stocks."

The value of livestock production is forecast to fall 10 per cent to just above $30 billion, he says, adding that slaughter numbers will fall as graziers look to replenish their herds and flocks.

The ABARES report also found that measures introduced to slow the spread of COVID-19 had had a significant impact on specialist horticultural, wine and other businesses, particularly those that supplied restaurants and food services industries.

Labour intensive industries such as horticulture and wine had been affected by the costs of social distancing, while outbreaks in abattoirs and on ships had also affected the meat processing and live export industries.

Woolgrowers were also affected, firstly by social distancing measures during shearing, while measures to contain the spread in the importing nations had affected yarn, textile and clothing manufacturers – not to mention falling demand for high value clothing.

Australia's cotton industry would also have been significantly affected had the 2019–20 crop not been dramatically reduced by drought, ABARES says.

Gooday adds that while the COVID 19 outbreak has tested the resilience of the industry, it had by and large adapted to the challenges.

"Exporters of high-value seafood, wine and meat products did face significant impacts, but have also demonstrated adaptation by expanding online sales and marketing directly to households," he says..

"Demand for Australian exports of food staples remains relatively steady, and our industry has shown it can adapt as conditions change."

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