Ag production down impacted by climate 'volatility'

Agricultural production is forecast to fall 15 per cent to $80 billion in 2023/24 but rise again next year, with Australia remaining in reach of its goal to build the sector’s worth to $100 billion by 2030.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) found drier conditions will likely see winter crop production drop by a third to 46.7 million tonnes in 2023/24, on par with the 10 year average.

The bureau’s annual commodities report forecasts the summer crop will remain well above its 10-year average, despite falling 17 per cent to 4.3 million tonnes.

Agricultural exports are also expected to fall 14 per cent to $67 billion, driven by declining crop production and softer international prices.

Livestock and cropping both took a hit after an El Nino declaration by the Bureau of Meteorology, according to ABARES head Jared Greenville.

A sudden increase in livestock volumes moving through stockyards saw prices drop rapidly, particularly for sheep.

“There seemed to have been a fairly strong response to the El Nino declaration ... (producers) destocked a lot of older animals which then led to that price drop,” Dr Greenville said.

Prices have since recovered but were around 15 per cent lower in February than the 10-year average.

Despite the downturn, ABARES anticipates the overall value of production will rise six per cent to $85 billion for 2024/25, meaning Australian agriculture “is still in reach” of meeting its $100 billion production target by 2030.

Australia’s increasingly volatile climate is meanwhile having a big impact on producers’ bottom line, according to the report.

Statistical analysis shows the increase in climate variability over the past two decades has lead to more volatility for agricultural production in Australia and abroad.

“Farm financial performance is highly dependent on weather and price forecasts and as such the changing climate will require careful planning and management to manage increasing uncertainty,” the report said.

“The climate is increasingly giving us greater risk in terms of our returns for farm cash incomes,” Dr Greenville said.

He said the variability in climate has seen farm incomes range from $90,000 to $244,000 for 2023/24.

ABARES’ crop and commodities reports released on Tuesday coincide with the bureau’s annual two day conference in Canberra.

Up for discussion are the impact of climate change and how Australian farms are adapting, as well as the opportunities and risks shaping agriculture’s future.