THE gross value of Australia's farm production for 2015-16 has been revised up from $57.1 billion to $57.6b.
The improved outlook is contained in the December edition of the Australian Bureau of Agricultural and Resource Economics and Sciences’ (ABARES) Agricultural Commodities report.
ABARES is still tipping that expected lifts in values of livestock and crop production will help boost overall farm production values, as it did in its September report.
The revised figure of $57.6b is about 17 per cent higher than the average of $49.4 billion over the five years to 2014–15 in nominal terms.
The gross value of livestock production is forecast to increase by around 13pc in 2015-16 to $30b following an estimated increase of 16pc in 2014-15.
That mainly reflects expected rises in farmgate prices for beef cattle, lamb, sheep and wool.
In a statement, ABARES executive director Karen Schneider, said farmgate prices of sheep and cattle are expected to rise as producers rebuild flocks and herds and reduce slaughter in response to an assumed improvement in seasonal conditions.
“Export demand for beef and lamb is also expected to remain firm, adding further upward pressure on prices,” Ms Schneider said.
“Prices of wool are also expected to rise as a result of a forecast fall in production, based on a smaller opening flock, and an assumed lower Australian dollar.
“Forecast increases in winter crop and horticultural production are expected to more than offset falling world grains and oilseeds prices.”
The gross value of crop production is forecast to increase by 2pc in 2015-16 to $27.6b alongside an expected increase of 2pc in the volume index of crop production.
Ms Schneider also said export prospects would remain strong for a range of farm commodities.
“Export earnings from farm commodities are forecast to increase by 1pc in 2015–16 to around $44 billion—around 15pc higher than the average of $38.2 billion over the five years to 2014–15 in nominal terms,” Ms Schneider said.
Export earnings are forecast to rise for a number of farm commodities, including wheat (3pc), wool (9pc), wine (3pc), lamb (1pc), sugar (8pc), live feeder/slaughter cattle (16pc to $1.3b) and chickpeas (56pc).
These forecast increases are expected to be largely offset by forecast falls in export earnings from beef and veal (3pc), dairy (6pc), coarse grains (14pc), canola (8pc), cotton (21pc) and mutton (2pc).
Export earnings from fisheries products are forecast to continue their recent growth, increasing by 17pc to $1.7 billion, after an estimated increase of 10pc in 2014–15.
“This reflects continuing strong demand from Asia and is expected to be driven by forecast increased export earnings for salmonids (up 35pc), rock lobster (18pc) and tuna (7pc),” Ms Schneider said.
World economic growth is assumed to be 3.1pc in 2015 and 3.4pc in 2016.
Economic growth in Australia is assumed to average 2.5pc in 2015-16, compared with 2.2pc in 2014-15.
The Australian dollar is assumed to average around US72 cents in 2015-16, 14pc lower than the average of US84 cents in 2014-15.
