But in announcing its latest forecasts, the bureau says a “new approach is needed” for its forecasts because of the way the climate has changed across much of the nation’s farming regions.
Underpinning their change is research from the Bureau of Meteorology and the CSIRO that has found April to October rainfall across the wheat-sheep belts of the east coast and Western Australia is now lower than the longer traditional term average.
Across the full year, rainfall in these prime agricultural areas are 50mm lower this century compared to the long-term average recorded between 1950 and 1999.
Average temperatures across the same areas have also increased this century, increasing evaporation rates.
The change means the traditional weather records of the 20th century, which have underpinned ABARES medium-term forecasts, can no longer be relied upon.
“Fifty to 100-year averages are becoming less relevant for forecasting future climate with the last 20 years providing a better indication on climate conditions over the medium term,” they found.
The move means increased variability in ABARES own forecasts. Its projections for 2022-23 include a better than 50-50 chance of that being a wet year but also a possibility it could be a very dry one.
“Years that would otherwise be assumed to return to average seasonal conditions are now assumed to be somewhat poorer for agriculture,” they said.
The bureau said one of the main reasons it produced forecasts was to help farmers develop risk management strategies for their properties. With the climate changing, it was “problematic” to stick with traditional weather assumptions that were at odds with the reality facing landholders.
Executive director of the Australian Farm Institute think tank Richard Heath said family farms have been the mainstay for Australian agriculture but “seasonal variability and predictions of what will happen” presented is “definitely making it more challenging”, particularly for family farms.
Smaller farms area already under pressure from rising input costs, higher costs of doing business, rising global competition, Mr Heath said.
Climate change and seasonal variability is contributing to the trend of industry consolidation to corporate farming.
“The variability is so big, which is what ABARES is saying, that the risk is extremely high for an average non-diversified, non-geographically distributed farming business,” Mr Heath said.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.
Mike is the climate and energy correspondent for The Age and The Sydney Morning Herald.