Over­all value re­mains firm

Shepparton News - Country News - - NEWS -

The crip­pling drought scorch­ing farm­land across east­ern Aus­tralia has failed to sap the over­all value of the na­tion’s agri­cul­ture sec­tor.

The big dry has been off­set by strong pro­duc­tion in Western Aus­tralia, high live­stock and ris­ing grain prices, and a lower Aus­tralian dol­lar, ac­cord­ing to the fed­eral agri­cul­ture fore­caster.

The Aus­tralian Bureau of Agri­cul­tural and Re­source Eco­nom­ics and Sciences’ lat­est quar­terly com­modi­ties re­port has fore­cast the to­tal value of farm pro­duc­tion will re­main rel­a­tively steady at $60 bil­lion this fi­nan­cial year, well above the 10-year av­er­age of $55 bil­lion.

Large swathes of Queens­land and all of NSW are con­tend­ing with drought con­di­tions, which has con­trib­uted to a 12 per cent fall in win­ter crop pro­duc­tion na­tion­ally.

ABARES ex­ec­u­tive di­rec­tor Steve Hat­field-Dodds said the lower vol­ume was ex­pected to be off­set by higher prices for canola, coarse grains, cot­ton and wheat.

‘‘A favourable ex­change rate will re­sult in a much smaller de­cline in the value of pro­duc­tion, and help main­tain re­turns to Aus­tralian ex­porters,’’ Dr Hat­field­Dodds said.

‘‘A warmer win­ter has sup­ported the pro­duc­tion of a range of fruits and veg­eta­bles, and sugar and wine grape pro­duc­tion have not been sig­nif­i­cantly af­fected by the drought.’’

Drought-stricken farm­ers de-stock­ing in the face of scarce pas­ture and ris­ing feed costs are ex­pected to push meat pro­duc­tion higher.

While in­creased meat sup­ply typ­i­cally leads to lower prices, rel­a­tively high world prices for meat are pro­vid­ing some sup­port to cat­tle farm­ers.

But Dr Hat­field-Dodds said cat­tle prices were ex­pected to fall by about nine per cent from the his­tor­i­cally high lev­els of re­cent years.

He said de­spite the higher value of pro­duc­tion, ex­port earn­ings were fore­cast to de­cline by five per cent from $49 bil­lion to $45 bil­lion.

‘‘How­ever these de­clines will be off­set by a rise in ex­port earn­ings for lamb, mut­ton, rice, cot­ton and cheese, due to strong global de­mand re­sult­ing from an in­crease in global eco­nomic growth.’’

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