Australia’s farmers are on track for a very good year – the type that is seen, possibly, only once every half century.
The country’s western states alone are on course for a record year, with 21 million tonnes of wheat, canola and cereals expected to be harvested at a value of A$8 billion ($5.6 billion; €5 billion).
And despite recent heavy rain in the east, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) expects similarly good news from other parts of the country, prompting it to project record-breaking production value and volume numbers for the 2021/22 season.
ABARES forecasts total agricultural gross production value of A$78 billion, which is a sizable A$5.4 billion more than the forecasts projected during the previous quarter. Production is expected to increase year-on-year for every major livestock commodity and almost every major crop commodity.
“It would be the first time in at least half a century that production will increase for so many products at the same time,” said ABARES executive director Dr Jared Greenville. “And if these forecasts are realized, 2021–22 will see the largest total volume of agricultural commodities Australia has ever produced.”
As far as the exceptionally high yields are concerned – some wheat farmers in Western Australia have reported yields commensurate with two harvests in one – ideal weather conditions following the drought-hit 2019-20 season have played a significant role.
Those same conditions have also helped ensure a high-quality crop, which means only a small percentage of the harvest will have to be downgraded to animal feed.
These crops will enter a global market where key competitors such as Brazil, Russia and the US have suffered from constrained yields, while food inflation has meant global commodity prices have increased by 28 percent in the last 12 months and 40 percent above pre-pandemic levels.
Hence ABARES’ forecast of a record-breaking gross production value of A$78 billion, of which A$61 billion is expected to be exported (another new record).
The heady numbers put one in mind of the National Farmers Federation’s target – which has been endorsed by government – of getting Australia’s agriculture, fishing and forestry industries to contribute A$100 billion of GDP by 2030, from a base of A$63 billion in 2016/17 when the goal was set.
ABARES’ A$78 billion production value forecast relates only to agriculture, of course, with GDP contributions from fishing and forestry set to add to that figure.
As the country edges towards potentially reaching what would be a massive growth achievement for its natural capital industries, the once-in-50-years nature of the current harvest dictates that these numbers will prove anything but sustainable.
If Australia’s agriculture, fishing and forestry industries are to hit the A$100 billion mark, longstanding issues such as some international investors’ view that the Foreign Investment Review Board is “the single most significant issue blocking capital investment in Australia” will have to be resolved.
The ongoing trade dispute with China – for which a panel was established at the WTO in October to examine China’s imposition of anti-dumping duties on Australia wine – is also unlikely to aid the effort.
But in the meantime, at least, Australia’s farming industry can concentrate on maximizing the gains from an exceptionally good year.