Australian farmers count financial cost of drought

Farming businesses lose tens of thousands of dollars a year due to harsh seasonal conditions. Here’s how to cut losses in a dry spring.

The average Australian farm loses almost $30,000 profit annually due to adverse seasonal conditions, while this year’s predicted dry could wipe 14 per cent from the nation’s agricultural production books.

The stark news was delivered a week after the Bureau of Meteorology confirmed an El Nino was under way across the Pacific region.

The effects and severity of previous El Nino events have varied across Australia, with the 2006-07 and 2015-16 versions hitting agriculture particularly hard.

The current El Nino climate pattern is predicted to increase the chances of a hot, dry summer across most of southern and eastern Australia, with the nation already enduring record-high temperatures in September.

Dry conditions have hit southeast Australia in September, as an El Nino climate pattern was declared by the Bureau of Meteorology.

ABARES forecaster Jared Greenville said the forecast conditions could cut gross agricultural production from last year’s $92 billion to $80 billion, or about 14 per cent.

The BOM data shows a 12 per cent decline in winter rainfall in southeast Australia since 2000.

Agriculture Minister Murray Watt told a recent national drought forum the El Nino declaration meant “drought is inevitable sooner or later”, he also cited ABARES data that changing seasonal conditions since 2001 reduced annual average farm profits by 23 per cent, or $29,200.

Meanwhile, Treasurer Jim Chalmers revealed Commonwealth disaster recovery spending rose from $335m in 2017-18 to $2.5b in 2022-23, with the 2019-20 bushfires and last year’s floods costing about $1.5b each.

Federal Treasurer Jim Chalmers talks to media in Queensland. Picture: Lachie Millard

“The pressure of a changing climate and more frequent natural disasters is constant, cascading, and cumulative,” he said.

National Farmers’ Federation chief executive Tony Mahar said while farmers were “anxious” about climate change, understanding forecasts, technology and risk management strategies assists in drought preparedness, management and recovery.

“If farmers aren’t in the midst of a drought, they are preparing for the one around the corner,” he said.

National Farmers' Federation chief executive Tony Mahar. Picture: Lukas Coch