The value of farm production is expected to decline by four per cent in 2018-19 due to poor eastern winter crops, although high prices and the near record crops in Western Australia stopped a bigger reduction from occurring.
That is according to the Australian Bureau of Agricultural and Resource Economics and Sciences’ latest Agricultural Commodities report, which predicts the value to fall to $58billion.
‘‘Many would have predicted a greater fall in agricultural production given the significance of the drought along the east coast,’’ ABARES’ chief commodity analyst Peter Gooday said.
‘‘Western Australia is forecast to have produced its second-largest grain crop — nearly 60 per cent of the Australian winter crop this year.
‘‘Improved commodity prices have helped, with grain prices expected to increase 11 per cent in 2018-19 and contribute to a three per cent rise in farm gate prices.
‘‘Wheat prices rose by five per cent and barley prices by 16 per cent.’’
Mr Gooday said the drop in production value was only for the short term.
‘‘Agricultural production is forecast to recover in 2019-20 and then grow slowly over the medium term, assuming a return to average seasonal conditions,’’ he said.
‘‘In 2019-20 the value of farm production is forecast to increase by two per cent to $59billion and grow to $61billion by 2023-24.’’
The report states that total Australian wool production and exports are forecast to fall in 2018-19, with continuing dry seasonal conditions across most wool-growing regions expected to reduce the number of sheep shorn nationally and the average wool cut per head.
‘‘From 2019-20 the sheep flock is forecast to begin recovering and increase each year to 2023-24,’’ the report read.
‘‘This will lift wool production and exports over the outlook period.’’
The report also stated that saleyard lamb prices for the year were forecast to increase significantly due to strong export demand but from 2019-20 to 2023-24 they were projected to fall as production recovered, assuming a return to more average seasonal conditions.
Australia’s farm gate milk price was forecast to fall each year until 2023-24, due to forecast global production outpacing demand and putting downward pressure on most dairy product prices.
■The report is available at: www.agriculture.gov.au/abares/research-topics/agricultural-commodities/mar-2019