Agricultural production will be the largest total volume of commodities Australia has ever produced, with a historic gross production value of $78bn, the Australian Bureau of Agricultural and Resource Economics and Sciences is predicting.
Despite flood and rain damage in the eastern states, the estimation in the Abares Agricultural Commodities report for the December quarter in 2021-22 is an upward revision of $5.4bn from the outlook issued in September, which was already considered record-breaking for surpassing $70bn.
The report said the prediction was a result of further improvements in domestic growing conditions, downgrades for key overseas competitors driving prices higher, and steep increases in logistics and fertiliser costs worldwide.
Dr Jared Greenville, Abares executive director, attributed the historic production value to these favourable conditions in addition to 30-year price highs.
“It would be the first time in at least half a century that production will increase for so many products at the same time,” Greenville said.
The export value is also at an all-time high, having been revised up $6.5bn to $61bn – the largest revision made to exports.
Fiona Simson, the president of the National Farmers’ Federation, said: “Whilst the recent floods in Queensland and NSW have been devastating for those affected communities, that impact is not enough to take the shine off the whole of agriculture’s performance.”
Simson said the strong performance despite the impact of the weather reflects the diversity of Australian agriculture: “When every commodity is doing well, then we perform strongly.”
She said it was positive to see the record prices across livestock, commodities and exports translating to value at the farm gate. “Most farmers feel buoyant about how agriculture is performing,” Simson said.
She also believes the agricultural outlook reflects why land prices are also at an all-time high: “There’s unprecedented demand for agricultural land at the moment. People recognise the future potential of growing food and fibre in Australia.”
But Greenville acknowledged there was uncertainty as to how long prices would remain at these levels. “Supply chain disruptions, higher fertiliser prices and heavy rainfall domestically will continue to be watch points,” he said.
The report said its forecast accounted for the effects of substantial rainfall and localised flooding in east coast growing regions last month.
It found: “This will delay harvests and result in isolated crop losses, but it is unlikely to reduce national harvest tonnage significantly. The larger impact will be on grain quality, with a higher than usual proportion of the crop being lower-value feed-grade wheat.”
But Brett Hosking, chair of Grain Growers and a farmer at Quambatook in Victoria, believes it will be another month before anyone can accurately evaluate the extent of the damage, as flood waters are still moving through affected areas and further rain is predicted.
Hosking said while it was a big crop, “it depends on which growers you talk to”.
While Victoria and Western Australia had “fantastic finishes” to their end of year, he said, it was a different story for many farmers in New South Wales and parts of South Australia, where Hosking says the total loss of crops and crops being downgraded will result in at least $1bn worth of lost income for rural communities.
While the report also cited that the record production came off the back of favourable weather conditions, Hosking said it was good management rather than favourable conditions that had contributed to the positive outlook.
“Growers would say the last 12 months hasn’t been favourable. Where I farm in Victoria, for example, we didn’t get rain until late in June, which would typically be a disastrous year.
“But good management has allowed growers to take advantage of whatever weather has presented itself, and produce the crop.”
Simson also credited farmers’ innovation in growing their crops to realise the potential of the higher prices at the moment.