Farmers to get more bang for their market buck in 2024-25

At the same time, the total value of Australian rural production is tipped to grow about two per cent from about $87.6 billion in 2023-24 to $89.5b in 2024-25, underpinned largely by improving livestock markets.

However, despite an anticipated 9pc increase in winter crop production, growing global grain trade competition will undermine ag's export value growth next financial year, according to national farm commodities forecaster, the Australian Bureau of Agricultural and Resource Economics and Sciences.

Improving winter seasonal conditions have helped support ABARES' forecast for the value of agriculture in 2024-25 to be the third highest on record - although not quite as high as its $85b prediction in March.

Big movers would include a $1.2b rise in beef, veal and live cattle values to 14.7b; a $200m increase in sheepmeat and live sheep to $4.6b; wool up $100m to $2.9b, and horticulture production up $500m, reaching a record $17.4b on the back of improved water availability, lower input costs and better growing conditions.

Milk production values were forecast to fall $400m to $5.6b, reflecting lower farmgate prices and less volume.

At the farm level, the improved seasonal conditions and higher livestock prices were expected to see average broadacre farm cash incomes rise $45,000 to $149,000 in 2024-25, according to ABARES.

The bureau has also forecast producers' terms of trade to rise 2pc as average prices paid for farm inputs dip in comparison with the farmgate prices received for production.

This year's terms of trade slipped to 10-year lows.

After farm input prices hit new highs in 2022-23, most had come down during 2023-24 and were expected to ease further in 2024-25, although still remained relatively elevated in historical terms.

In particular, fertiliser prices, which with chemicals accounted for around 14pc of total farm cash costs in 2022-23, were tipped to continue drifting lower in 2024-25, helped by an expected stronger Australian dollar reducing prices for imports such as fuel.

ABARES said farmgate commodity prices in 2024-25 were likely to remain relatively stable, with slightly lower crop values being offset by higher livestock prices.

Its latest Agricultural Commodities and Australian Crop Report predicted generally improved results for the sector following drier conditions in 2023-24.

"Some cropping regions have been experiencing dry conditions, but an expected improvement over winter, combined with better livestock prices and production, will put Australian agriculture in a good position," said executive director, Jared Greenville.

"Strong global demand for livestock products will support an improvement in prices and production, with the gross value of livestock production and livestock products forecast to rise 3pc to $35.5b in 2024-25.

"For crops, despite lower prices resulting from higher global production, production value is expected to grow by 2pc to $48.1b in 2024-25 on the back of higher production levels."

He said grain growers had responded strongly to the changing market and seasonal conditions.

The area expected to be sown to chickpeas would be up almost 80pc in response to recent Indian tariff reductions and a good start to the season in much of the NSW and Queensland cropping belt.

Further south, lentil plantings were also at a record 885,000 hectares.

"The forecasts show Australian agriculture doing what it's known for - being adaptable to seasonal conditions and able to respond to new market opportunities," Dr Greenville said.

However, the reduced supply of grain and oilseeds for export in 2024-25 would contribute to a decline in the total value of agricultural exports by almost $3b to $69b in 2024-25.

ABARES said most global crop prices were expected to fall in in 2024-25 as overseas production grew, although world sugar, rice and cotton prices were tipped to remain above theory 10-year averages in real terms, thanks to higher global consumption.

Livestock exports were expected to rise by $470m to 30.1b, reflecting increased production and increased global demand pushing up prices.

The current year's grain export volumes have been bulked up by stockpiles carried over from the previous financial year.

Yet, even despite the fall in total export values, the result would also continue to rate as Australian agriculture's third highest on record.