March 8, 2024

 

Australia's agricultural output weakens with soft global grain prices

 

 

Australia's agricultural output has dropped by 15% this financial year due to dry conditions and soft international grain prices, Financial Review reported.

 

This development has led to a significant fall in farming incomes in the country.

 

Australia's agricultural output is expected to decline to $80 billion in value in 2023-24, with crop production falling by nearly 20%, according to the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) March commodities report.

 

The ABARES report showed a 14% drop in the value of agricultural exports ($67 billion) following several positive years.

 

Wheat production value was expected to fall by almost 40% to $10 billion this financial year. However, 2023-24 will still remain the third-highest year on record following 2023's bumper harvest.

 

In the face of potential dry conditions and weaker pasture growth, farmers have sent more cattle to slaughterhouses this year, causing a glut in the market and deflating prices.

 

Broadacre farm cash incomes are forecast to drop to $131,000 for the 2023-24 financial year, with elevated costs, lower crop production and soft local livestock prices all contributing to the reduction.

 

Still, Australia's agricultural output is forecast to rise by 6% next financial year to $85 billion.

 

Favourable growing conditions are expected to result in the value of crop production in the country rising 2% to $49 billion in 2024-25.

 

Major climate variability is expected to have an impact on Australian farmers; the report noted that average farm income could swing from anywhere between $90,000 and $244,000 depending on weather conditions.

 

Additionally, the country value of milk production could drop by about $420 million to $5.5 billion due to relatively low export prices.

- Financial Review