The latest ABARES Agricultural Commodities report forecasts a return towards trend for farm production and exports in 2017–18, before steady growth over the next five years.
ABARES Executive Director, Dr Steve Hatfield-Dodds, said the gross value of farm production is estimated to have increased at an annual rate of 2 per cent over the past six years to 2017–18. The 5 per cent reduction forecast for 2017–18 follows an exceptional 2016–17.
“Our forecast farm production of $59 billion in 2017–18 is largely due to a return towards trend in the gross value of crops from record production in 2016–17,” Dr Hatfield-Dodds said.
“Our price projections for the next five years are influenced by two key drivers. Global crop production is trending down from the very high levels of 2016–17, but is expected to be enough to keep stocks high and prices low out to 2022–23, provided no major supply shocks occur.
“For livestock, the US beef cycle has moved to a phase of increased production, intensifying competition in Australia’s export markets. For the period to 2022–23, we project this will keep prices below the recent highs associated with US production bottoming out in 2015–16.
“With this flat outlook for prices, growth in the value of agricultural production and exports will come mainly from increased volume, underpinned by rising demand as incomes and populations in importing countries grow.
“An expected 2 per cent increase in the gross value of livestock production in 2017–18 will be driven by global demand for sheep meat, lamb, wool and dairy. Steady increases are forecast to follow, with the gross value of farm production to increase by an average of around 1.2 per cent per year to reach nearly $63 billion in 2022–23.
“In 2017–18 the value of farm exports is expected to decline by 4 per cent to $47 billion, before growing steadily to reach $50 billion by 2022–23.”