It is forecasting total farm production to drop to $59 billion this year, from $62 billion in 2018-19, with good sales of livestock goods offsetting the drop-off in crops such as wheat.
ABARES expects beef and veal exports, which are tipped to reach a record $9.8 billion this financial year, to fall by 23 per cent in 2020-21 as farmers seek to re-stock their paddocks.
The nation’s sheep flock is already at its lowest level since 1904, while the cattle herd is at its lowest since 1990. ABARES says it will take several years for sheep and cattle numbers to return to pre-drought levels.
Offsetting the drop in beef production, ABARE believes wheat exports will climb 20 per cent next year to almost $4.2 billion on the back of a 30 per cent jump in production. Crop production traditionally lifts in a year after drought.
Barley exports are tipped to rise by 31 per cent in value terms to $1.6 billion while canola exports are forecast to jump by a third to $1.3 billion.
Total agricultural exports this year are expected to be 11 per cent down to $43 billion. This will be 16 per cent below the record set in 2016-17, largely due to three consecutive annual falls in crop exports.
ABARES noted the spread of the coronavirus was an emerging risk for some sectors.
It said the nation’s seafood industry was likely to see a 12 per cent drop in production this year to $2.8 billion, but this would bounce back to $3.4 billion in 2020-21.
China accounts for 94 per cent of Australia’s $752 million rock lobster exports and 42 per cent of the nation’s $194 million abalone exports.
ABARES’ chief commodity analyst, Peter Gooday, said livestock exports would also take a hit as demand out of China for Australian beef would be affected.
He said while the virus would probably deliver a short-term hit, the summer’s fires would not.
“Widespread bushfires over the 2019-20 summer are not expected to have had a significant impact on the agricultural sector on the whole,” he said.
“The bushfires and smoke impacts in some areas were locally devastating. The majority of Australia’s agricultural production and exports, however, takes place outside the affected areas.”
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.