The prospect of farmers harvesting their biggest grain crop in five years at the end of 2016 has sent forecasts for Australian farm production values jumping to $58.5 million.
But a slide in some key farm product export earning capacity will be weighing on the sector’s prospects in the coming year – notably dairy and cereal crops.
Although the winter crop harvest is still months away, the total gross value of farm production in 2016-17 is shaping up to be 12 per cent higher than the average value for the past five years, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
A favourable start to the cropping season, firm export demand and forecast increases in the production of key crop commodities have supported the government forecaster’s positive outlook.
However, overall export earnings from farm commodities is forecast to drop 2.5pc to $43b in 2016-17, despite rises in earnings from wool, cotton, lamb, canola and live cattle.
“In 2016-17, the gross value of crop production is set to increase to $28.6b, driven by forecast rises in the value of sugar, cotton and horticulture production,” said ABARES executive director, Karen Schneider.
After rising by 10.9pc in 2015-16, the gross value of livestock production was forecast to remain at around $29.8b in 2016-17.
ABARES is, however, tipping significant falls in the value of beef and veal export earnings, as well as dairy products, wheat, barley, chickpeas and mutton.”
Export earnings are forecast to rise six per cent for wool, 14pc for sugar, 21pc for cotton,12pc for canola, 3pc for live feeder/slaughter cattle and 1pc for lamb.
Fisheries product export earnings are forecast to remain at around $1.7b in 2016-17, after an estimated increase of 16.7pc in 2015–16.
The latest forecasts are detailed in ABARES quarterly Agricultural Commodities report.
