The value of Australia's agricultural production is growing at millions by the minute, so much so it's set to break the $70 billion gross mark for the first time in history.
In what ABARES describes as a "remarkable combination of events", record yields, prices and good seasons have combined for the record ag production forecast of $73 billion for 2021-22.
It's an unprecedented upward revision in a single quarter for nearly 20 years, with an additional $8b added to the gross value after release of forecasts in June.
Leading the way is the value of crop production, forecast to increase by seven per cent to a record $39.5b because of strong price increases for grains, cotton and sugar.
ABARES says the value of livestock production is forecast to increase by 8pc to $33.5b, driven by higher volumes and hunger for young cattle.
"The sector stands poised to capitalise on a remarkable combination of events. Both seasonal conditions and prices are forecast to be much better than earlier expected," the report said.
"In Australia, the continuation of widespread favourable seasonal conditions means another near record harvest is forecast. This has also contributed to continued optimism in the red meat industry, leading to record prices being paid for young cattle by both restocking graziers and processors. Overseas, key competitors are suffering poor growing seasons, which is pushing up international grain prices.
"Further, the ongoing recovery from the depths of the global COVID-19 recession is leading to a resurgence in demand for travel and in discretionary spending. This is increasing demand for fibres, oilseeds and sugar."
But ABARES warned the good conditions may not persist as agricultural production was likely to fall after 2021-22 and "elevated crop prices are unlikely to persist if seasonal conditions improve overseas".
ABARES executive director Dr Jared Greenville said if the forecast in the Agricultural Commodities: September Quarter report proved accurate, then it would be the first time the agriculture sector has been valued at more than $70 billion.
"The forecast for next year is due to a combination of factors, all tumbling neatly into place," Dr Greenville said.
"While there are risks related to mice, labour availability and continued uncertainties due to COVID-19, we are expecting national production to remain robust.
"We've had a solid cropping year across the wheat-sheep belt, so we're looking at another robust harvest.
"A good year means optimism at the saleyards, and many of our farmers are enjoying their second good year in a row. This has translated to record prices for young cattle as farmers look to restock.
"The last two years have placed our farmers in a good position to take on any challenges ahead."
Federal Agriculture Minister David Littleproud said "this is remarkable in unprecedented economic times, and plenty of industries in Australia haven't seen that kind of growth".
"We've got all our ducks in a row for a record year again underpinned by our Ag 2030 plan to help agriculture trash its $100 billion goal by 2030.
"It's not all smooth sailing. COVID-19 continues to provide challenges for international trade, although we are working as a government to do what we gain to boost international trade.
"We have listened to concerns about labour shortages and we are progressing the agricultural visa to make sure that we can get the fruit picked and the veggies out of the ground.
"We are also keeping an eye on mouse numbers through the spring, particularly in southern Queensland and northern and central NSW.
"While mouse numbers are unlikely to impact the harvest, they may affect grain stored on-site. Bulk handlers are already upping their storage make sure that we can get as much crop to the market at possible.
"Australians backed our farmers during the tough years of drought we are now seeing those very farmers help the Australian community and Australian economy through and beyond the pandemic."
The value of agricultural exports is also forecast to be a record, increasing by 12pc to $54.7b in 2021-22. Growth is forecast for most of Australia's major export commodities.
One of the biggest agricultural sectors to take a hit in prices though was wine, with prices down 13pc, obviously due to the high tariffs imposed by China, and also live cattle prices down 8pc. Wine though was recovering from the tariff hit, and grape prices were increasing.
For every other sector it was up and up with a massive 38pc price rise forecast for cotton in 2021-22. ABARES said there will be increased demand for natural fibres as the world came out of the pandemic and cotton and wool were high on consumer lists.
"The easing of COVID-19 restrictions, strong global economic growth and higher oil prices are expected to drive demand for natural fibres in 2021-22. The reopening of major economies will increase consumer spending on apparel, as people draw down on the savings accrued during the pandemic," the report said.
Source: The Land. 14 September 2021. Read full article...