Friday, October 29, 2021

Agricultural sector going full steam ahead

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Australia’s agricultural production is anticipated to reach a record gross value of $73.0 billion in 2021-22, breaking the $70 billion mark for the first time in history.

Flock of sheep
Photo: Nareeta Martin on Unsplash

According to ABARES Agricultural Commodities Report for the September quarter, the value of agricultural exports from Australia is also set reach record heights of $54.7 billion over the same period, an increase of 12%.

High prices across almost all commodities, with favourable environmental conditions are set to result in harvest approaching all-time records. With Australia’s fortune being further advanced by weak growing seasons overseas.

Crop production is forecasted reach a record $39.5 billion, an increase in value of 7%, as a result of price gains for grain, sugar and cotton.

While livestock production is anticipated to grow in value by 8% to $33.5 billion, due to high numbers.

The country’s largest agricultural exports are expected to see hearty gain over 2021-22, excluding live slaughter cattle and wine, which are tipped to fall by a respective 13% and 8%.

Crop exports are anticipated to make up the most significant portion of export growth, increasing by 17% to $30 billion, the greatest crop export increase since the 2016-17 period.

Beef and veal is expected to see a 1% price increase, while beef export volumes should rise by 8% for a export value of $9 billion.

Wool is forecast to see a 16% price increase for exports, with volume also set to rise as the recovering global economy leads to increased demand in natural fibres.

Livestock export value is set to increase by 7% to $24.7 billion, driven by increased exports of wool, beef, lamb and dairy.

Additionally, lamb is expected to see 2% increase in price, Cotton 38% increase, Sugar 3%, wheat 8%, Canola 16% and Barley 4%.

Despite a positive outlook, factors such as COVID-19 vaccine distribution, freight costs and supply and the ongoing management of  mice still pose significant risks. In addition to the ongoing limit in supply of seasonal and unskilled labour.

Meanwhile, Herron Todd White’s latest Month in Review report further highlighted the gains being made across Australian agribusiness and the regions which are leading the industry in innovation.

In the country’s east, the NSW North Coast stood out for its strong market conditions being driven by an increase in buyers from the capital city markets. The region is being underpinned by demand for macadamia orchard, mature red basalt soil plateau orchards, sugar cane farms.

While in the Mildura region, plentiful season conditions and commodity prices are driving up levels of enquiry and values. Confidence is also being supported in the regions by the introduction of new and continuous cropping programs, reducing the risk of crop failure.

In the Darling Downs region of southern Queensland confidence remains high, buoyed by the EYCI breaking the 1000 cent mark and being reflected in strong rural auction results.

“It should also be noted that many of these recent auctions have been undertaken via online platforms. The success of adaptation to an online environment for these auctions is confirmation of the modern farmer’s willingness to get in, have a go, learn new skills and utilise available technology,” said Bart Bowen, director at Herron Todd White.

In the Northern Tablelands, activity, demand and prices remain heightened, with re-sales in the region increasing by 15% to 20% in the past 12 to 18 months.

Far North Queensland has seen ongoing demand in grazing properties, while horticulture has been witnessing a resurgence in the Mareeba Dimbulah growing area, after years without high value sales.

Finally in the Northern Territory and Kimberly, the pastoral land market in the three years to mid-2021 has seen 26 transactions, with land values averaging increases between 30% and 40%.

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