WHILE the COVID-19 pandemic will continue to present challenges, the outlook for agriculture will be dominated by recovery from drought, according to the June Agriculture Commodities report issued by the Australian Bureau of Agricultural and Resource Economics.
ABARES’ acting executive director Peter Gooday said that better seasonal conditions are expected to see the value of farm production increase modestly to $61bn in 2020–21, the third straight year over $60bn.
“This is driven by a strong forecast rebound in grain production, up 15% to $30.8bn,” Mr Gooday said.
“The value of livestock production is forecast to fall 10% to just above $30bn, ending a run of very strong growth. After three years of widespread drought, conditions have begun to improve, and re-stocking is likely to commence.
“A global economic slowdown combined with higher agricultural production is going to weigh on prices – price falls are forecast for most major commodities.
“A bright spot is that red meat prices are expected to hold up, with the impact of African swine fever still driving protein demand in Asia.”
As Australia recovers from drought, the value of farm exports is forecast to fall by around $2.7bn to $44.4bn in 2020–21, driven by falling meat exports and the rebuilding of domestic grain stocks.
“With graziers looking to rebuild herds and flocks, slaughter numbers – and therefore exports – are forecast to fall.
“Meat and live animal exports are forecast to fall by $3.5bn and while exports of grain are expected to increase by almost $2.3bn, over 4m tonnes of the 2020–21 grain harvest is expected to be retained to rebuild domestic stocks.
“Replenishing our herds, flocks and grain stocks sets us up well for the long term.
“While domestic grains stocks are sufficient to see us through to the winter harvest, this investment in grain stocks will be important in improving resilience in our supply.”
Mr Gooday said Australian agriculture’s resilience and ability to adapt swiftly to challenges should position the sector well during the post-pandemic recovery.
“With a few notable exceptions, Australian agriculture has not been severely impacted by COVID-19 and has shown that it can adapt in most cases,” Mr Gooday said.