Australia’s agriculture production likely to fall: DAFF

Spanish Market: Agriculture
07/03/23

The La Nina weather phenomenon is weakening in Australia and crop production is set to decrease in the coming year because of drier weather, after above-average rainfall led to record highs through the last three years.

The gross value of Australian agriculture production in the 2022-23 financial year ending 30 June is on track to hit A$90bn ($60bn), exceeding the 2021-22 record by A$2bn, according to the latest agriculture overview by the Department of Agriculture, Fisheries and Forestry (DAFF). This is on the back of another record crop production, a third consecutive La Nina and continued high domestic and international prices.

The value of agricultural production is set to fall by 10pc to A$81bn in 2023-24, with a return to drier conditions and a prediction for lower crop production in Australia for the coming year, according to DAFF. But high water storage and strong herd and flock rebuild numbers will support strong agriculture production values, compared to other low-rainfall years.

The value of agricultural exports is expected to hit a record of A$75bn in 2022–23, the first time exports have risen above A$70bn in nominal terms. Exports in 2023-24 are forecast to fall to A$64bn, owing to lower domestic production and easing global commodity prices, according to DAFF.

Total summer crop production in Australia is forecast to reach 5mn t, down from the 5.3mn t in the previous year but still 57pc above the 10-year average, DAFF said. Falling production is driven largely by lower yield forecast from a lack of rain through the growing season, offsetting increases in planted area. Sorghum harvest in the 2022-23 season is estimated to reach 2.5mn t, the fourth largest in records, and cotton to reach 1.2mn t, the third largest in records.

The La Nina weather pattern has weakened in the tropical Pacific Ocean and is likely nearing its end, according to a climate driver update from the Australian Bureau of Meteorology. Ocean indicators of La Nina have returned to neutral levels, while atmospheric indicators that remain at La Nina levels have started to weaken. Producers are already seeing a change in the environment as a decrease in rainfall forces farmers to alter and adapt their businesses to maintain moisture in their farm plots and to keep breeding herds high.

Australia's booming agricultural sector in recent years, with high commodity prices and optimal seasonal conditions that led to record production and profits, is dominating talks at this year's Australian Bureau of Agricultural and Resource Economics and Sciences 2023 outlook in Canberra.

The national forum is a platform for sharing ideas, networking, and planning for the future of Australian agriculture. Further sessions will revolve around growing grain markets, disease prevention, trade negotiations, labour, sustainability, and climate change.

By Jessica Clarke

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