Ag forecast to rebound slightly after poor season

Agricultural production is expected to rebound slightly for 2024–25 following predicted falls of 15 per cent to $80 billion for 2023-24.

Agricultural production will rebound slightly next year after expected falls of 15 per cent to $80 billion in 2023/24, with Australia remaining in reach of its goal to build the sector's worth to $100 billion by 2030.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said a small increase in agricultural production of up to six per cent is expected for 2024/25.

"Australian agriculture, fisheries and forestry sectors continue to perform very strongly, but that have fallen from the record highs of recent years," ABARES executive director Dr Jared Greenville told a conference in Canberra.

"This year the sector is going to fall from those really record highs close to just over $94 billion down to $80 billion and then we're expecting a bit of a rebound next year," he said.

Dr Greenville said this puts Australian agriculture "in reach" of meeting its $100 billion production target by the end of the decade.

ABARES found drier conditions will likely see winter crop production drop by a third to 46.7 million tonnes in 2023/24, on par with the 10-year average. 

The bureau's annual commodities report forecasts the summer crop will remain well above its 10-year average, despite falling 17 per cent to 4.3 million tonnes.

Livestock and cropping both took a hit after an El Nino declaration by the Bureau of Meteorology, according to ABARES head Jared Greenville.

A sudden increase in livestock volumes moving through stockyards saw prices drop rapidly, particularly for sheep.

"There seemed to have been a fairly strong response to the El Nino declaration ... (producers) destocked a lot of older animals which then led to that price drop," Dr Greenville said.

Prices have since recovered but were around 15 per cent lower in February than the 10-year average.

While the 2024-25 outlook is favourable for production, the forecasts predict exports will continue to decline, driven by declining crop production and softer international prices.

Australia's increasingly volatile climate is meanwhile having a big impact on producers' bottom line, according to the report.

Statistical analysis shows the increase in climate variability over the past two decades has lead to more volatility for agricultural production in Australia and abroad.

"Farm financial performance is highly dependent on weather and price forecasts and as such the changing climate will require careful planning and management to manage increasing uncertainty," the report said.

"The climate is increasingly giving us greater risk in terms of our returns for farm cash incomes," Dr Greenville said.

Producers are expected to see a turnaround in their bottom line next year Dr Greenville told the conference.

"Broadacre farm cash incomes are also set to rebound in 2024-25 to $192,000, after significant falls in 2023-24," he said.

"We're expecting to see quite a turnaround in farm profits."

ABARES' crop and commodities reports released on Tuesday coincide with the bureau's annual two-day conference in Canberra.

Up for discussion are the impact of climate change and how Australian farms are adapting as well as the opportunities and risks shaping agriculture's future.