The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has forecast a small decline in farm export earnings in 2014-15, with returns improving in the medium term.
This follows a strong year in 2013-14 due to bumper crop production.
The figures were released in the March issue of Agricultural commodities at the ABARES Outlook 2014 Conference in Canberra, which began today.
“Export earnings from farm commodities are forecast at $39.4 billion in 2013-14 on the back of above average crop production in many parts of the country – a level expected to decline to $38.3 billion in 2014-15,” according to ABARES Executive Director Karen Schneider.
“In 2014-15, a rise in export earnings is predicted for wheat of 2 per cent, cheese of 16 per cent, skim milk powder of 12 per cent, sugar of 4 per cent and wine of 3 per cent.”
Offsetting these rises are forecast falls in export earnings from beef and veal (5 per cent), cotton (12 per cent), barley (29 per cent) and canola (35 per cent).
“Export earnings for fisheries products are forecast to increase by 6 per cent to around $1.27 billion in 2014-15, after increasing by a forecast 2.5 per cent in 2013-14, Ms Schneider said.
“The broadacre livestock sector is expected to begin to reduce slaughter and rebuild herd and flock numbers during 2014-15, assuming a return to average seasonal conditions following recent drought in many areas in eastern Australia.”
Forecast figures for production value in 2014-15 are mixed:
- The gross value of farm production is forecast to fall slightly to around $50.5 billion in 2014-15, following a forecast increase of 6.6 per cent to $51 billion in 2013-14.
- The gross value of livestock production is forecast to increase by around 4 per cent to $22.9 billion in 2014-15, following a forecast increase of 9.4 per cent in 2013-14.
- The gross value of crop production is forecast to decline by 4.9 per cent to $27.6
- billion in 2014-15, after a forecast increase of 4.5 per cent in 2013-14
These figures follow wide variation in the regional financial performance of Australian broadacre farms in 2013-14.
Large falls in farm incomes are projected in regions of QLD and northern NSW that have been subject to drought conditions – with Queensland projected to hit a record low.
In contrast, farm cash incomes in Western Australia and South Australia are projected to be the highest in 30 years as a result of record winter grain production.
Productivity will be essential
“In the medium term, the value of farm exports is forecast to continue to rise. By 2018-19 the value of farm exports is expected to reach around $39.3 billion in 2013-14 dollars,” Ms Schneider said.
“This is 11 per cent higher than the average over the five years to 2012-13.”
“Productivity will be essential to realising this potential. Continued productivity growth will depend on a range of issues, including balancing the costs and benefits of government regulation and addressing pressure on supply chain infrastructure.”
Ms Schneider will present this outlook at today’s ABARES Outlook 2014 conference, alongside Yiping Huang of Peking University and Alan Oster of National Australia Bank.
With a focus on opportunities for Australian agriculture, ABARES Outlook 2014 is being held in Canberra today (March 4) and tomorrow (March 5).