Bright outlook for farming sector

By Hugh Christie on
21 March 2023


Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) 2022-23 performance forecast for the Australian Agricultural sector was recently published, which paints a positive picture of the industry's growth and performance. The good news is that the sector is expected to reach $90 billion in 2022-23 across Australia.

The report highlights the sector's strong performance in exports, income generation, and risk management, and predicts that broadacre and dairy farms will benefit from record-high production and export values in 2023.

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The success of the Australian agricultural sector can be attributed to past reforms, investment in productivity, and changes in what the country produces for key exports. Tasmania's farmers have played a significant role in this success by capitalising on favourable commodity prices, investment in irrigated agriculture and demonstrating a commitment to investing in and adapting to future opportunities. One example of this positive news is that ABARES data reveals that Tasmanian wheat crop production has consistently increased, with an impressive growth rate of 45.6% over the last five years, thanks to an increase in crop area plated. Canola production is also expected to increase, primarily due to the expansion of the area planted.

The dairy sector is predicted to grow by 2.14%, with total factor productivity (TFP) growth of 1.7%, indicating that the sector has produced more goods with greater efficiency. These trends provide valuable insights for farmers, policymakers, and industry experts to make informed decisions about future business management and investment strategies. Increased productivity will also lead to improved profitability and competitiveness, which is essential for the industry's long-term success.

However, the report also highlights the adverse effects of climate change, which are expected to impact the bottom line.

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According to ABARES, Australia is expected to experience a significant drop in agricultural supply next year due to dry weather caused by El Nino. ABARES predicts a decrease in wheat output from 39.2 million tonnes in 2022/23 to 28.2 million tonnes in 2023/24 across Australia.

This variability highlights the positive position Tasmania finds itself due to our more reliable climate and ongoing investment in productivity measures such as irrigation, providing resilience to the sector.

It will also be crucial to maintain the industry's sustainability credentials and competitive edge regarding trade.

Overall, the ABARES performance forecast for the Australian agricultural sector presents a positive outlook, with opportunities for growth and innovation. The key issue is we just need to make sure that Governments continue to safeguard the industry's growth by addressing issues such as infrastructure investment, workforce shortages and biosecurity to ensure we can continue to provide food and fibre to the world.

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