For the first time, the value of Australia's food and fibre exports is expected to exceed $70 billion as good weather conditions and high prices continue for farmers.
But the value of farm production overall will soften slightly, dropping from $85 billion in 2021–22 to $81.8 billion this year, according to the Australian Bureau for Agricultural Resource Economics and Sciences (ABARES).
"[What] we're expecting to see is the second-highest-value production year ever, with the sector value expected to reach $82 billion," said ABARES executive director Jared Greenville
"That's down slightly on what we saw last year of $85 billion, but it's still a really significant performance when you consider just a few years back, in 2020–21, we were looking at $73 billion."
The latest ABARES forecast, which has been released today, shows farm export earnings will increase by 5 per cent to $70.3 billion in 2022–23.
"That's almost 50 per cent more than what it was 10 years ago after accounting for inflation," Dr Greenville said.
The government's commodity forecaster expects 55.5 million tonnes of grain will be harvested this year, which would be the fourth-largest recorded.
It forecasts $11.7 billion of wheat, $10.2 billion of beef and $7 billion of cotton to be exported from Australia in 2022–23.
Farm sector challenges ahead
Good growing conditions are expected to continue, but Dr Greenville has warned global inflation and rising costs involved in producing crops could hinder farm incomes.
Dr Greenville says there are a few "global headwinds" that we have been seeing play out.
"The global inflation outlook and global economic growth outlook is looking a little bit grim overall," he said.
"And so they have an impact on the demand for Australian products, and particularly some of our fibre products, but also flowing through to some of our higher-value meat and other products.
"Global food and fertiliser prices remain very high despite falling from peaks earlier in 2022.
"The World Bank expects high global food prices through to the end of 2024, which will have adverse implications for global food security."
The latest ABARES forecast notes the heightened biosecurity risks posed by recent detections of lumpy skin disease and foot-and-mouth disease in Indonesia.
"If an outbreak of either were to occur in Australia, the economic consequences for livestock production and exports could be severe," it said.
"An outbreak would jeopardise the export of many (if not all) livestock and livestock product."
Big value earners
Dr Greenville said cropping and red meat would continue to be big earners for Australian agriculture this year.
"Wheat is right up there again with some really high production values and high export values on the back of high expected production, but also those really high global prices," he said.
"In red meat, we're starting to see the rebound and herd and flock rebuilding, and our national herd and national flock are back to pre-drought levels — back to levels that we saw in 2018.
"That's a really impressive kind of rebuild in such a short amount of time.
"The other thing is with cotton, we've had good yields with cotton in terms of low water prices, and also high availability of water and that's flowing through to some high production levels.
"Cotton production is expected to fall a little bit this year, but we'll export a lot because we had a big crop last year, which couldn't get exported, and we'll follow that up with another big crop."
The value of horticulture will hit $14 billion in 2022–23.
"Horticulture has been a stand-out for some years now in terms of its growth, and it's almost doubled in size over the past 20 years," Dr Greenville said.
"We're expecting horticulture again to grow this year, and it will be tempered a bit by labour availability, after the ongoing labour shortages that were created on the back of COVID."
