Farmgate value likely to hit $65 billion, but watch on trade

Australian farmgate production is expected to be $65 billion in 2020-21 on the back of the nation’s second largest winter crop and promising rainfall outlook.

ABARES’ December quarter 2020 Agriculture Commodities report points to continued recovery for the farming sector from drought—and resilience in the face of COVID-19.

“Overall, Australian agricultural production is bouncing back from the drought,” ABARES executive director Dr Steve Hatfield-Dodds said.

“Australian producers manage one of the most variable environments in the world so ebbs and flows in production are to be expected.

“We’re expecting a near all-time high winter crop, the best ever in New South Wales, and a more favourable outlook for summer cropping than we have seen in recent years.

“Livestock prices have also stayed high with herd and flock rebuilding, and continued international demand.”

While production is forecast to rise by seven per cent to $65 billion, exports are expected to fall by seven per cent from last year to $44.7 billion.

“Exports have continued to find markets during the pandemic but the residual effect of past dry seasons and trade uncertainties are pushing down export value,” Dr Hatfield-Dodds said.

“Recovery from drought is limiting production and exports of livestock products and fibres, with meat prices also falling as the African Swine Fever impact on China’s pork production begins to lessen.

“There are a number of risks present for the rest of 2021 that remain a watch point, including wine trade with China and labour shortages for the horticulture sector.”

The December quarter 2020 Agriculture Commodities report is available here.