Farm production down on earlier forecasts

Australian farmers are expected to produce $58 billion worth of goods in the current financial year, marking a decline from earlier forecasts.

But the latest prediction from the Federal Government’s agriculture forecaster ABARES for 2018-19 remains above the 10-year average of $56 billion.

Increases in farmgate prices and strong production in Western Australia are tipped to contribute to the solid result, offsetting the impact of a drought scorching farmland across the county’s east.

The value of crops produced is expected to drop by seven per cent to $29 billion in the year, as a result of the big dry affecting NSW, Queensland and Victoria.

At the same time, the value of livestock and livestock products is forecast to rise by two per cent to almost $30 billion.

The drought is set to lead to greater meat production, but lamb and wool prices are high.

Export earnings for 2018-19 are tipped to decline by seven per cent to $45 billion.

That’s due to lower production as a result of poor seasonal conditions and more domestic competition for course grains and wheat for feed.

But ABARES executive director Steve Hatfield-Dodds said a lower Australian dollar will also help the 2018-19 result.

The Trans-Pacific Partnership trade pact coming into force on December 30 is a welcome development for farmers too, Dr Hatfield-Dodds said, but he noted the global picture was worrying.

“The continuing trade conflict between the United States and China is a key source of uncertainty in the outlook for Australian agricultural exports,” he said.

In its previous quarterly commodities report in September, ABARES had tipped $60 billion worth of production this financial year.

Farm production reached record levels in 2016-17 at $63 billion.