Poor climate conditions in grain-growing regions have contributed to the gross value of farm production being forecast to reach $59 billion in 2017-18, down seven per cent from a record of $63 billion in 2016-17, according to the ABARES report – Agricultural commodities, December quarter 2017.
ABARES Executive Director, Dr Steve Hatfield-Dodds, said the forecast reduction is mainly due to lower crop production and prices.
“This follows an estimated 12 per cent increase in 2016–17 when our winter crops delivered exceptional yields and prices for livestock and wool were quite favourable,” Dr Hatfield-Dodds said.
“Despite the decline, gross value of farm production would still be higher than the average of $55 billion over the past five years.
“This forecast reduction is likely to lead to a decline of around 3 per cent in export earnings, to $47 billion in 2017-18.
“This is driven by forecast declines in the value of exports of wheat (down 18 per cent), canola (52 per cent), barley (41 per cent), chickpeas (32 per cent) and sugar (13 per cent).
“Export earnings are forecast to increase for livestock and livestock products and also cotton and wine.
“While grain prices are expected to remain low in 2017-18, prices for livestock and livestock products are expected to increase.
“The report shows prices of livestock products are expected to be more favourable in 2017-18, in line with rising demand for sheep meat, wool and dairy.
“Beef and veal production is expected to increase by 12 per cent, wool by three per cent and lamb by two per cent in 2017-18, while milk is tipped to increase by almost three per cent, following a decline in 2016-17.”