Australian agriculture is set to produce more than $90 billion of food and fibre products this financial year, the third year in a row the industry has broken value records.
Strong seasonal conditions and high commodity prices have underpinned strong production and prices. Including forestry and fisheries, the total value of industry outputs is forecast to exceed $96 billion.
Dr Jared Greenville, executive director of ABARES, said that the industry’s success would flow onto the performance of the export market.
“Agricultural exports are also forecast to set new records, reaching $75 billion in 2022–23. This is the first time we’ve seen our exports exceed $70 billion, which is a huge achievement,” he said.
“National winter crop production has driven much of these results, with the winter crop estimated at a new record of 67.3 million tonnes in 2022–23. This beats last year’s record by 4 million tonnes and is being driven by exceptional results out of Western Australia and South Australia.
Dr Greenville said that the national canola and wheat crops had broken production records, and barley reached its third-highest crop.
“High values of livestock production have also contributed to these record numbers, with producers increasing their production while also benefitting from historically high prices”.
While farmers in many areas of Australia have been experiencing relatively strong production conditions, climate patterns are likely to result in drier conditions ahead, with softening production volumes.
“This year will likely be the last hurrah for the La Nina rain system for a while, and we can expect drier seasonal conditions ahead. However, production will continue to be supported by good soil moisture and high water storage levels.
“While we expect production to be lower in 2023–24, at $81 billion it will still be the third highest on record.
“Australia has been very fortunate to have had wet years and high commodity prices. But we are expecting commodity prices to ease with competition stepping up in global markets.
ABARES is predicting the medium-term average national value of agricultural products to return to around $74 billion per year.
Australian UK Free Trade Agreement “Months Away”
The A-UK FTA is one step closer to opening doors for Australian exporters after the Australian Government completed its domestic ratification process.
The proposed agreement will see tariffs eliminated on more than 99% of Australian food products exported to the UK including wine, rice, honey, seafood, nuts, fruit, vegetables and processed foods.
The agreement will also see the tariffs significantly reduced for beef, sheep meat, sugar, wheat and dairy.
The UK government is now undertaking its ratification process, the last step before new trading standards will come into effect. Currently, the UK is Australia’s second-largest market in Europe valued at around $100 million annually.
Up to the 1970s, the UK was Australia’s single largest export market, made up largely of agricultural commodities. At its peak, the UK represented 40% of Australia’s exports, but this figure dropped to a low of 5% after the UK joined the EU.
It is hoped that the new free trade agreement will help to boost the volume and value of exports to the UK.