Australian agricultural exports: Victoria value strong despite coronavirus

Exports of Australian agricultural goods are down $2 billion this year, but a Rural Bank analysis reveals dairy, beef and grains exports remain strong.

Value of Australian agricultural produce exports by state and territory.

STRONG beef, dairy and grains exports are carrying Victoria through the global COVID-19 economic slump.

Despite Australia falling into recession last month, it’s deepest since the Great Depression – the economy shrank 7 per cent in the three months to June – and the nation’s first in almost 30 years, Victorian agricultural exports were down just 1 per cent this year to August 31 to $8.8 billion and the state continues to account for the lion’s share of Australia’s agricultural export output.

Victoria’s export total accounts for all products that passed through the Port of Melbourne, including interstate produce.

A Rural Bank examination of each Australian state and territory’s export trends this year showed the value of Victorian exports was the greatest in the nation, followed by Queensland ($5.6 billion) and Western Australia ($5 billion). Nationally, agricultural exports were down 6 per cent.

The bank’s head of sales for Eastern Australia, Andrew Smith, said Victorian dairy did much of the heavy lifting, but it was a tale of two halves.

“We’ve had a good increase in our cropping exports which were up $500 million due to higher grain production, beef was up 6 per cent with better beef prices driving most of that and finally dairy was up about 5 per cent and that’s partly to do with better seasonal conditions generating higher volumes, but we’ve also seen better prices for skim milk powder in particular, and cheese,” Mr Smith said.

But he said Victorian wool exports were down, and almond exports were down considerably, about 50 per cent, due to increased competition from the US and the impact COVID-19 has wrought on consumer spending patterns.

“The continued increase in dairy stands out. When we look closer at dairy, the production side of things is going very well but we’ve also seen demand increasing particularly from China who are buying quite large quantities of milk powder to shore up their supplies,” Mr Smith said.

Victoria accounted for almost 30 per cent of Australia’s agricultural exports over the 12 month period. Mr Smith said the state’s strong performance spoke to its resilience and diversity.

“It’s the diversity of product, so while wool is down we’ve had a good increase in cropping, beef and dairy,” he said, adding the outlook for the remainder of the year was positive given lamb and dairy production would continue to ramp up and beef prices were maintaining their high levels.

“So milk, lamb and beef give us confidence that we’ll be catching-up by the end of the year.”

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