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A new report from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) found that the overall value of the sector would shrink by 14 per cent in 2023-24.
ABARES executive director Dr Jared Greenville said the reduction was to be expected after the records broken in the past three La Nina years.
“The value of agricultural production will still reach $79 billion in 2023-24, which is an expected fall given the circumstances,” Greenville said.
“We are expecting exports to follow suit, falling by 17 per cent to $65 billion in 2023-24, which would be the third highest result on record.”
Despite La Nina conditions triggering repeated flooding in some of Australia’s prime farming country in recent years, crop yields were still exceptional.
But El Nino, combined with the forecast positive Indian Ocean dipole, will have the opposite impact.
“Crop production in 2023-24 is forecast to fall by 34 per cent from record production volume in 2022-23,” Greenville said.
“At the same time, domestic prices for most crops are expected to fall in 2023-24.”
Furthermore, increased global production is expected to lower prices for crops globally.
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However, it’s not the same story across all industries.
“Horticulture production is expected to increase by $1.5 billion to reach a record $18 billion, reflecting strong growth in nut production and increasing domestic fruit and vegetable consumption,” Greenville said.
“The wine industry will also rebound from a challenging 2022-23, as the expected drier conditions in 2023-24 should reduce the occurrence of disease which reduced the 2022-23 crop.”
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Livestock producers are looking at a mixed forecast.
Production is forecast to increase for beef, sheep, and milk, but the value of the sector is set to drop to $35 billion in 2023-24 due to lower prices.
“This is down to a number of factors, such as less demand for restocking, and like crops, we expect global production to pick up,” Greenville said.
But wool is expected to have a strong 2023-24 – thanks in part to a surprise source.
“Strong demand for Australian from China is forecast to increase wool prices, with production values expected to rise by $175 million in 2023-24,” Greenville said.
