THE Australian Bureau of Agricultural and Resource Economics and Sciences has released its June quarter forecasts for Australian agriculture, which values the farm production sector at $59bn for this financial year.
The report forecasts 2019–20 export earnings will fall by 5% to $45bn, with lower forecast prices for major cereal crops and a decline in meat and wool production.
ABARES’ chief commodity analyst, Peter Gooday, said while seasonal conditions had improved compared with this time last year, this was not expected to translate to an increase in the value of exports.
“The decline in export value is driven by a forecast 11% fall in the value of livestock exports. Turnoff and slaughter was high this year and producers will be looking to rebuild herds and flocks as seasonal conditions improve,” Mr Gooday said.
ABARES forecasts export earnings will decline for beef and veal, wool, lamb, mutton and live feeder cattle but strong demand from China and other export markets is expected to help keep prices high.
Export earnings from crops are forecast to increase by 3% in 2019–20, weighed down by a forecast $1.7bn fall in the value of cotton exports following a significant fall in production this year.
“Winter crop prospects have improved this year, and we expect that to flow through to higher grain production and exports,” Mr Gooday said.
“We expect the value of wheat exports to be 24% higher in 2019–20, with export earnings for barley, sugar, canola, chickpeas and wine also forecast to increase.”
Seasonal conditions are more favourable for the start of the 2019–20 winter season compared with last year. However, much depends on conditions during spring in constructing ABARES’ forecasts which have assumed average seasonal conditions for spring.
Table: Major Australian agricultural commodity exports. Source: ABARES
The value of crop production is forecast to remain unchanged from 2018–19 at $30bn, weighed down by forecast lower prices received, especially compared to the high prices that prevailed in domestic grain markets in 2018–19.
The value of livestock and livestock products is forecast to decline by 6% to $29bn, according to ABARES.
The improvement in seasonal conditions since March has also motivated herd and flock rebuilding. As a result, declines are forecast in 2019–20 for live animal exports (down by 11%), slaughter (9%) and wool production (7%). Milk production is forecast to be relatively unchanged from the low level in 2018–19, as dry conditions over the past two years take their toll on production capacity.