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Agricultural commodities: June quarter 2015

The June edition of Agricultural commodities contains ABARES' latest outlook for Australia's key agricultural commodities in 2015-16, which updates the outlook ABARES released in March 2015.

In addition to commodity forecasts, this publication also includes boxes about the Australian sugar industry; the beef cattle industry in South America; demand and supply of sorghum in China; reforms to dairy support policies in the European Union; and El Nino and agricultural production.

Commodity forecasts
• Export earnings from farm commodities are forecast to be around $41.8 billion in 2015-16, compared with an estimated $42.4 billion in 2014-15. • This would be around 10 per cent higher than the average of $38 billion over the five years to 2014-15 in nominal terms. • Agricultural commodities for which export earnings are forecast to rise in 2015-16 include coarse grains (up by 6 per cent), dairy (2 per cent), lamb (2 per cent), live sheep (6 percent), wool (5 per cent) and sugar (5 per cent). • These forecast increases are expected to be more than offset by forecast falls in export earnings for beef and veal (4 per cent), wheat (5 per cent), canola (5 per cent), cotton (33 per cent), live feeder/slaughter cattle (4 per cent) and mutton (13 per cent). • Export earnings for fisheries products are forecast to increase by 6.3 per cent to around $1.6 billion in 2015-16, after increasing by an estimated 13.9 per cent to $1.5 billion in 2014-15. • The index of unit export returns for Australian farm exports is forecast to rise by 2.5 per cent in 2015-16, following an estimated rise of 6.0 per cent in 2014-15. This forecast increase in 2015-16 mainly reflects the effect of an assumed lower Australian dollar. • Higher export prices, in Australian dollar terms, are forecast for beef and veal, wool, barley, wine, lamb, canola, live feeder/slaughter cattle, rock lobster, mutton and dairy products in 2015-16. In contrast, export prices of wheat and sugar are forecast to decline. • The gross value of farm production is forecast to increase by 3.1 per cent to around $53.7 billion in 2015-16, following an estimated increase of 2.1 per cent to $52.1 billion in 2014-15. At this forecast level, the gross value of farm production in 2015-16 would be around 9 per cent higher than the average of $49.1 billion over the five years to 2014-15 in nominal terms. • The gross value of livestock production is forecast to increase by around 5.2 per cent to $27.2 billion in 2015-16, following an estimated increase of 13.1 per cent in 2014-15. The forecast increase in 2015-16 mainly reflects expected higher farmgate prices for beef cattle, lamb, sheep and wool, more than offsetting a forecast decline of 4.1 per cent in the volume index of livestock production in 2015-16 under the assumption of herd and flock rebuilding in the latter half of 2015-16. • The gross value of crop production is forecast to increase by 0.9 per cent to $26.5 billion in 2015-16, following an estimated decrease of 6.8 per cent in 2014-15. The forecast increase in 2015-16 mainly reflects an expected increase of 1.4 per cent in the volume index of crop production. • The volume index of total farm production is forecast to fall by 1.5 per cent in 2015-16, following an estimated decline of 0.7 per cent in 2014-15.

Economic assumptions underlying this set of commodity forecasts
• In preparing this set of agricultural commodity forecasts, world economic growth is assumed to be 3.4 per cent in 2015 and 3.6 per cent in 2016. • In Australia, economic growth is assumed to average 2.7 per cent in 2015-16, compared with 2.5 per cent in 2014-15. • The Australian dollar is assumed to average around US76 cents in 2015-16, around 10 per cent lower than the average of US84 cents in 2014-15.

El Nino and agricultural production

• The Bureau of Meteorology advised that the El Nino in the tropical Pacific continues to strengthen. All international climate models surveyed indicate that tropical Pacific Ocean temperatures are likely to remain above El Nino thresholds through the coming southern winter and into spring. • The impact of an El Nino event on Australian agricultural production is not uniform and is difficult to predict. While an El Nino event is often, but not always, associated with reduced rainfall in eastern Australia, the timing of rainfall can have a significant effect on crop and pasture production.

Data and Resources

Additional Info

Field Value
Title Agricultural commodities: June quarter 2015
Type Dataset
Language English
Licence Creative Commons Attribution 4.0 International
Data Status inactive
Update Frequency quarterly
Landing Page https://data.gov.au/data/dataset/c45285d3-942d-4778-b19d-99868e6f9be9
Date Published 2018-07-13
Date Updated 2018-07-13
Contact Point
Australian Bureau of Agriculture and Resource Economics and Sciences
dataman@agriculture.gov.au
Temporal Coverage 2015-06-16
Geospatial Coverage Australia
Jurisdiction Commonwealth of Australia
Data Portal data.gov.au
Publisher/Agency Australian Bureau of Agriculture and Resource Economics and Sciences