La Niña weather events will help push farm gate output to a near-record $85 billion this year as flooding in parts of Australia is offset by almost perfect growing conditions elsewhere along with strong commodity prices.
The winter crop is expected to be the second-largest on record at 62 million tonnes, and combined with strong prices will push agricultural exports to a record $72 billion in 2022-23.
Production is expected to reach records in Western Australia and South Australia following favourable conditions, and despite damaging rainfalls, crop production in the eastern states remains high overall.
Strong demand for wheat and canola spurred a race for paddock space, and both are expected to produce record volumes, according to the Australian Bureau of Agricultural and Resource Economics.
Jared Greenville, executive director of ABARES, said some key regions were experiencing their best winter crops on record.
“We saw a record amount of crop planted in Victoria this year. At the state level, high yields in the Mallee and the Wimmera will offset crop losses in central and northern border regions,” Dr Greenville said.
“However, the full picture of damage to crops from extensive waterlogging remains an unknown,” he cautioned, and further rainfall over summer that stops crops from being harvesting will add to losses.
Back-to-back La Niña events and a negative Indian Ocean Dipole have sparked exceptionally wet conditions in recent years.
“Considerable uncertainty remains over winter crop harvest progress and grain quality in NSW and Victoria given ongoing high rainfall, which could lead to downgrades in production value,” Dr Greenville said.
Livestock production is expected to hold steady, contributing $34 billon to the national $85 billion total.
Over the medium term to 2026-27, farm gate output is expected to pull back from the record levels to between $65 billion and $70 billion a year, well below the National Farmers Federation target of $100 billion by 2030.
Food prices rose at the fastest annual pace since 2006 in the September quarter, which was partially attributable to flooding and heavy rainfall.
ABARES said while food prices were rising quickly, farmers were also facing rapidly growing input costs. The price of fuels and fertilisers, for example, both rose more than 100 per cent, while chemicals are up 30 per cent.
Looking ahead, summer crops are forecast to be well above average, supported by high soil moisture and significant areas of land left unused during winter. However, ABARES warned of high summer rainfall risks.
The exception is NSW, where excessively wet conditions mean summer crop planting is forecast to be down about 9 per cent.
On an individual commodity level, wheat production is forecast to reach a record of 36.6 million tonnes, a 1 per cent increase over the previous record set last year, according to ABARES.
Barley production is tipped to reach 13.4 million tonnes, the fourth-largest on record, while canola is forecast to reach a record at 7.3 million tonnes, a 4 per cent improvement over the previous record set last year.
Cotton production is forecast to decrease 23 per cent in 2022–23 to 4.3 million bales, following a record of 5.6 million bales in 2021–22, largely due to excessive rain preventing planting in affected regions.
Rice production is also expected to fall significantly, more than halving, also because of “extreme rainfall” preventing growers from accessing paddocks.
Wine is forecast to fall in 2022–23 due to the continued oversupply of red wine available on global markets, and the ongoing effects of China’s anti-dumping decision.
Original article published in the Financial Review and written by Ronald Mizen, Economics correspondent. Dec 6, 2022.
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