edf189dc-854c-4a1e-840e-b0b1befe5765 urn:uuid English UTF-8 nonGeographicDataset nonGeographicDataset 2018-09-26T00:18:25 creation ISO 19115 2016 Agricultural commodities: September quarter 2018 edf189dc-854c-4a1e-840e-b0b1befe5765 Overview The September edition of Agricultural commodities contains ABARES latest outlook for Australia's key agricultural commodities in 2018-19, which updates the outlook released in June 2018. Key Issues • In 2018-19 the value of farm production is forecast to be relatively unchanged at $60 billion. • Dry conditions are affecting agricultural production in eastern Australia, but strong forecast production in Western Australia, rising grain prices, high livestock prices and a lower Australian dollar are providing support to farm incomes. • Export prices are forecast to increase by around 3% in 2018-19, driven by a decline in the global supply of grains and strong demand for meat products. • Downside risks to Australian agriculture include uncertainty around the duration of the drought in impacted areas, the timing and amount of rain in other regions, and possible disruption to world agricultural markets stemming from protectionist trade measures. Commodity production forecasts • The value of crop production is forecast to decrease by 3 per cent to $30 billion in 2018-19. ◦ The decline is expected to be driven by a forecast decline in area planted in the eastern states. Drought conditions across eastern Australia restricted planting opportunities for crops, such as barley, canola and wheat. ◦ Higher forecast prices for canola, coarse grains, cotton and wheat are expected to mitigate the impact of lower crop volumes on the value of production. ◦ Wine grape and sugar production are forecast to rise as producing areas have been less affected by drought. The value of sugar production is nevertheless forecast to decline due to weak international prices. ◦ Horticultural production has increased following a warm winter, boosting production of a range of fruits and vegetables • The value of livestock production is forecast to increase by 2 per cent to $30 billion in 2018-19. ◦ Drought in the eastern states has increased cattle and sheep turn-off, lifting meat production and leading to a forecast reduction in herd size. ◦ Dairy production is forecast to increase, as processors continue to offer relatively high milk prices. However, the production response is likely to be dampened by increasing feed and fodder costs. ◦ Wool production is forecast to be lower, constrained by lower flock numbers and poor grazing conditions. Commodity export forecasts • Export earnings for farm commodities are forecast to be $47 billion in 2018-19, down 5 per cent from $49 billion in 2017-18 • The decline in export earnings is largely due to lower exportable supplies of canola, coarse grains, pulses and wheat and increased domestic demand for grain. Agricultural export prices, measured by the index of unit export returns, are forecast to increase by 3% in 2018-19. ◦ Export earnings are forecast to decline in 2018-19 for canola (down 39 per cent), coarse grains (24 per cent), wheat (10 per cent), sugar (9 per cent), wool (2 per cent) and wine (1 per cent). Export earnings for beef and veal and live feeder/slaughter cattle are unchanged. • Export earnings are forecast to be supported by strong demand from Asia and advanced economies for Australian livestock and livestock products. Higher prices for wheat, coarse grains and cotton are also expected to support earnings. ◦ In 2018-19 export earnings are forecast to rise for lamb (up 17 per cent), rice (14 per cent), mutton (13 per cent), cotton (9 per cent), cheese (6 per cent) and rock lobster (3 per cent). • Export earnings for fisheries products are forecast to increase by 2 per cent in 2018-19 to $1.6 billion, after increasing by an estimated 10 per cent in 2017-18. Assumptions underlying this set of commodity forecasts Forecasts of commodity production and exports are based on global and domestic demand and supply assumptions. • On the demand side, stronger world economic growth will translate to higher per person incomes in most of Australia's export markets, supporting stronger demand. ◦ World economic growth is assumed to be 3.9 per cent in 2018 and 2019. ◦ Economic growth in Australia is assumed to be 3.0 per cent in 2018-19. ◦ The Australian dollar is assumed to average US74 cents in 2018-19, lower than the assumed average of US78 cents in 2017-18. • On the supply side, Australian agricultural production prospects are assumed to be below average. ◦ Dry conditions are forecast to have significant implications for crop yields and livestock production cycles in the eastern states. Uncertainties that could affect agricultural commodity production and export growth include supply shocks in Australia or international markets (such as natural disasters, drought and disease outbreaks) or unexpected economic events that affect trade and economic growth. Boxes on agricultural issues Evolving EU biodiesel policies • Proposed changes to the EU renewable fuels policy could increase demand for Australia's canola exports in the short to medium term. • Since 2010-11 the European Union has been the largest export market for Australian canola. Most canola is imported to produce renewable transport fuel. Australia 151.122622 151.122622 -25.371968 -25.371968 AGRICULTURE AGRICULTURE Crops AGRICULTURE Livestock AGRICULTURE statistics Australia China FISHERIES FISHERIES production FISHERIES statistics FORESTS FORESTS production FORESTS statistics Farming INDUSTRY INDUSTRY Primary INDUSTRY Primary statistics Peru FTA agriculture barley beef canola chicken chickpeas climatic conditions commodities cotton crop planting crops dairy exchange rate exports fish fisheries forest products goat meat grains horticulture imports livestock livestock production lupins macroeconomic march oilseeds pigmeat pork poultry production rice sheep sheepmeat sorghum value veal wheat wine wool Agricultural commodities: September quarter 2018 - Report (Revised: 24/09/2018) documentDigital KeyDocument 01 Full resolution copy of Agricultural commodities: September quarter 2018. (Revised volume of farm production, crop production and livestock production indexes as reported in table 'Major indicators of Australia's agriculture, fisheries and forestry sectors'. This table appears on p. 12 of the publication. ) PDF Agricultural commodities: September quarter 2018 - Report with lower resolution images (Revised: 24/09/2018) documentDigital GeneralDownLoad 01 Lower resolution copy of Agricultural commodities: September quarter 2018. (Revised volume of farm production, crop production and livestock production indexes as reported in table 'Major indicators of Australia's agriculture, fisheries and forestry sectors'. This table appears on p. 12 of the publication. ) PDF Authoritative descriptive metadata for: Agricultural commodities: September quarter 2018 documentDigital Metadata in ISO 19139 format XML