Australian farmers are poised to break the national farmgate record in 2020-21, as figures indicate the agricultural sector will yield $66.3 billion of produce over the coming year.
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The agricultural industry will yield a record-setting $66.3 billion worth of proces in 2021-21 as favourable conditions and high livestock prices continue to drive up value
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The new estimates, detailed in the June 2021 Agriculture Commodities report by government forecaster ABARES, are an increased revision on previous outlooks following high livestock prices and faster than expected grain exports following the bumper winter harvest.
The revision, from last quarter’s estimates in March, reflects a $400 million growth in the sector and the overall farmgate value represents an eight per cent increase on the drought-affected 2019-2020.
Farmgate production value is expected to dip next year, however – falling to $65 billion.
The 2021-22 figure is shrunken as a result of livestock farmers choosing to breed rather than slaughter. The reduction in gross value will be alleviated by the price of livestock, which remains at historically high levels.
Despite rising input costs across the entire industry, sector-wide farm net cash income is also predicted to remain high in 2021-22 at $21 billion; a figure slightly down when compared to 2020-21’s $23.8 billion.
ABARES acting executive director Jared Greenville, says the outlook is overwhelmingly positive for the agriculture industry.
“ABARES has revised both the gross value of production and the value of exports up by $400 million from earlier estimates,” Greenville says.
“This is due to strong domestic livestock prices, and because the pace of Australian grain exports has been faster than expected after harvesting the second-largest winter crop on record.
“We have seen an impressive turnaround in wheat, barley and canola shipments. Particularly for barley, this result demonstrates the resilience of supply chains, the benefits of a diversified production base and access to a diverse range of international markets.
Ongoing ramifications of the COVID-19 pandemic resulted in only minute impacts in the sector, the study found. A sharp increase in fruit and vegetable prices was also avoided as horticulture growers countered crippling labour shortages thanks to favourable seasonal conditions which increased overall production.
The reopening of economies around the world over the next two years will also likely be beneficial to Australia’s agricultural exports, with demand for beef, lamb, seafood and wine likely to increase. Similarly, textile markets such as wool, cotton and vegetable oils – which were affected by the pandemic – are also forecast to recover as the global economy improves.
Disruptions caused by China’s ongoing tariffs on Australia were identified as the biggest impact on commodity prices this year as ongoing tariffs on exports such as wine and barley forced the market to adapt and find alternatives.
“The largest impacted occurred as a result of reduced market access to China and the continuation of the effects of African swine fever on Chinese pork production,” the report says.
“The pace of recovery from African swine fever in China and other pork-exporting countries continues to create uncertainty for global meat markets.
“No additional change to China’s tariffs on Australian barley and wine are expected during 2021–22, and supply chains are expected to continue to adapt to alternative markets.”
The ongoing mouse plague was also identified by ABARES as a potential disruption to the sector’s gross farmgate value, where damaging contamination of summer crops and winter planting has been affected throughout parts of Southern Queensland and New South Wales.
ABARES says the impact of the mouse plague varies in each individual paddock and contamination of grain and hat stored on farms has been affected the most.
Harvested sorghum has been among those impacted, with farmers experiencing reduced returns of the summer crop.
“The impact of mouse plagues has been locally devastating, but on the national scale damage has been reasonably limited,” Greenville says.
“The worst impacts have been to stored grain and hay across parts of Queensland and New South Wales, although high mouse activity has been observed in many parts of the wheat belt.
“The worst of the mouse plague is likely to be behind us as cool and wet winter conditions slow breeding rates. “There does remain a risk of a resurgence if winter is warmer than expected.”