Australian agriculture: Farmgate value to skyrocket in 2020-21
The value of Australian agriculture is set to reach levels not seen since 2017. But international trade issues could provide headwinds for the industry in the new year.
AUSTRALIA’s agricultural production value is tipped to hit $65 billion this season, bolstered by a huge winter crop harvest and widespread rainfall.
But issues surrounding international trade could be the sting in the tail for a fruitful year in agriculture.
The latest Australian Bureau of Agricultural and Resource Economics and Sciences commodity outlook report, published today, forecast Australian farmgate production to reach an impressive $65 billion in 2020-21.
The last time the value of Australian agriculture was this high was in 2017-18, when total farmgate value reached $66 billion.
In contrast, farmgate production was forecast to reach just $59 billion in 2019-20, a low not seen since the millennium drought.
ABARES executive director Steve Hatfield-Dodds said this season’s forecast was indicative of Australian agriculture rebounding from the impact of drought.
“We’re expecting a near all-time high winter crop, the best ever in NSW, and a more favourable outlook for summer cropping than we have seen in recent years,” Dr Hatfield-Dodds said.
“Livestock prices have also stayed high with herd and flock rebuilding, and continued international demand.”
The report forecast for Australian livestock prices in 2021 was for a softening of price in the latter half of the year.
Higher grain production this season could have a knock-on effect on to other agricultural exports, according to the report.
But a looming storm for agriculture lies in global trade volatility in the new year, with Australian agricultural exports forecast to drop 7 per cent to just $44.7 billion.
“There are a number of risks present for the rest of 2021 that remain a watch point, including wine trade with China and labour shortages for the horticulture sector,” Dr Hatfield-Dodds said.
“Exports have continued to find markets during the pandemic but the residual effect of past dry seasons and trade uncertainties are pushing down export value.
“Recovery from drought is limiting production and exports of livestock products and fibres, with meat prices also falling as the African Swine Fever impact on China’s pork production begins to lessen.”
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