The Australian Bureau of Agricultural and Resource Economics (ABARES) released its latest forecasts on Tuesday, forecasting a 4% rise in agricultural production gross value.
The ABARES Agricultural Commodities and Crop Reports show significant growth in the sector, from $82.5 billion in 2023-24 to $86.2 billion in 2024-25, the third highest result on record.
Executive Director of ABARES, Dr Jared Greenville, said this forecast shows production value across agriculture, fisheries and forestry reaching $92.1 billion in 2024-25.
These newest figures bode well for Ag2030’s goal of delivering a $100 billion industry by 2030.
Global Demand Driving Red Meat
An increasing appetite for Australian red meat in the United States and Middle East is driving growth in the agriculture sector, with output expected to reach a new record.
“Demand for our meat exports is really having a big impact on our meat and veal and our sheep meat prices, so we’re seeing that translate to farm gate prices,” Dr Greenville said.
“Red meat exports are performing well in the US and Middle East,” Dr Greenville said.
“We’re also seeing increased trade flows with China across various commodities, following improvements in market access.”
The increase in livestock and livestock product export values is being driven by record high values of beef and veal exports to the United States, sheep meat exports to the Middle East, and lamb exports to the United States.
Production Values Not All Sunshine
The gross value of crop production is forecast to rise in 2024–25 ($760 million higher) as higher domestic production more than offsets falling prices.
Crop export values are expected to fall, driven by both lower export volumes and declining global prices across major crop commodities. However, Australian winter crop production volumes are forecast to rise by 17% and are set to drive higher values.
“We have seen more favourable seasonal conditions across large parts of the country, easing input prices, and higher livestock prices supporting farm incomes,” Dr Greenville said.
“However, unfortunately not all farms in all regions are expecting to see an improvement.
“Crop production across Australia has been driven by New South Wales and Queensland, and better than expected seasonal conditions in Western Australia.
“But unfavourable conditions in north and western Victoria and most of South Australia following below average winter rainfall have resulted in lower than expected crop production.”
This year has seen less carry-over stocks of grain available for export in comparison to the past two years which is driving a slight fall in export value, despite production still sitting comfortably as the third highest on record.
Profitability for both broadacre cropping and livestock farms is forecast to improve in 2024–25 but remain below long-term averages in real terms. There is a positive story, though, with the average cash income for those operations rising by 64 per cent to $192,000 per farm.
Horticulture Holding up Growth Projections
Horticulture values are expected to increase to a record $17.8 billion, reflecting improved growing conditions, high water availability and easing input pressures.
“The horticulture industry is continuing to showcase its resilience as it maintains its forecast of record-breaking production values,” said Dr Greenville.
The projected gross value of horticulture production is set to be $330 million higher than earlier forecasts in the June 2024 Agricultural Commodities Report.
The increase in the value of horticulture production is being driven by higher yields for fruit and nuts and world demand increasing in high value markets like China, Japan, and Korea.
Growing Production Value Ahead
The forecast for total farm production values in 2024–25 has been revised up by around $2.6 billion from the June 2024 Agricultural Commodities Report.
“We’re expecting to see the price for cattle and sheep increase compared to last year, leading to this significant improvement in farm incomes,” Dr Greenville said.
“The ABARES Commodities and Crop Reports tell a positive story for Australian agriculture, capitalising on demand for our quality products.”
Key Points
- Gross value of agricultural production forecast to rise by 4% to $86.2 billion in 2024–25.
- Livestock and livestock product production values to increase driven by strong global demand.
- Crop production values to rise despite lower global grain and oilseed prices.
- Agricultural exports to be $68.5 billion in 2024–25, with increased livestock values.
- Input pressures expected to ease in 2024–25 supporting a rebound in farm incomes in some regions.
Sources: ABARES September 2024 Agricultural Commodities Report, ABARES