Tough or wildly varied grain growing conditions through winter and spring have shaved about $4 billion from the gross value of Australia’s forecast agricultural production.
After hitting a record $63b in 2016-17, farm production is now forecast to only reach $59b in 2017-18, or down seven per cent, according to the Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES).
However, the commodity forecaster’s December quarterly agricultural commodities report shows livestock product prices are expected to be more favourable in 2017-18, lifting the value of exports for sheep meat, wool and dairy products in particular.
ABARES executive director, Dr Steve Hatfield-Dodds, said the forecast reduction was mainly due to lower crop production and prices.
“This follows an estimated 12pc increase in 2016–17 when our winter crops delivered exceptional yields and prices for livestock and wool were quite favourable,” he said.
Forecast wheat exports for this season have been cut by 1.36 million tonnes after a droughty start to the season in parts of the eastern and western grain belt, followed by season setbacks from a dry spring, late frosts, and then rain at harvest in the south.
Expectations for coarse grain and canola exports have also been cut to seven-year lows.
ABARES has lowered its forecast for Australia’s wheat exports in 2017-18 to 16.8m tonnes, or about 24pc down on last financial year.
“This forecast reduction is likely to lead to a decline of around 3pc in export earnings, to $47b in 2017-18,” Dr Hatfield-Dodds said.
“However export earnings are forecast to increase for livestock and livestock products and also cotton and wine.”
Despite the lower gross value of farm production it would still be higher than the average of $55b in the past five years.
Dr Hatfield Dodds said Australia’s reduced export earnings expectations were likely because of forecast declines in the value of wheat exports by 18pc, canola by 52pc, barley by 41pc, chickpeas by 32pc and sugar 13pc.
“While grain prices are expected to remain low in 2017-18, prices for livestock and livestock products are expected to increase.
“Beef and veal production is expected to increase by 12pc, wool by 3pc and lamb by 2pc in 2017-18, while milk is tipped to increase by almost three per cent, following a decline in 2016-17.