Another year of record value in 2022-23

The forecast for the gross value of production in Australia is optimistic, with a record-breaking $90 billion predicted for 2022-23. This is largely due to another record year for crop production, driven by high prices and favourable weather conditions. Although localized losses of crops occurred due to fooding and waterlogging on the east coast, overall production levels are expected to be the highest on record, with wheat, canola, and barley all experiencing record or near-record yields. In addition to crop production, the total value of agriculture, fshery, and forestry production is also predicted to reach a record of more than $96 billion.

However, the outlook for 2023-24 is less positive, with a 10% decline in the value of agricultural production expected, mainly due to the return to drier seasonal conditions that will lower crop production. Livestock production is expected to remain relatively steady, but the combined value of wheat, barley, and canola production is projected to fall by around one third. This is partly offset by an increase in horticultural production, driven by fruit and nut production and high export prices. International prices are also likely to have a negative impact on the value of production, despite remaining above long-term averages.

Looking ahead to the medium-term from 2024-25 to 2027-28, the real value of agricultural production is projected to range from $73 billion to $79 billion, depending on seasonal conditions. However, the formation of an El Niño event bringing drier conditions or prolonged periods of dry weather could have a signifcant negative impact on production levels. In addition, slower global economic growth and reduced demand for agricultural commodities could put further downward pressure on prices and the value of production.

A ‘drier’ scenario that factors in these possibilities predicts a cumulative decline of up to $37 billion in the value of agricultural production over fve years.