Tough decisions growers plan next season

"Australian farmers face tough decisions as production forecast drops by 17%, affecting budgets and next season's plans. Livestock prices also decline."

Australia's agriculture industry is facing a challenging time ahead as global supply and dry conditions take a toll on farmers. The forecast for total agricultural production in 2023-24 is a significant 17% decrease, with a projected value of $78 billion. While this is a $16 billion drop from the previous year, it would still mark the third-highest result on record.

The decline in production values is largely attributed to lower crop production, which is expected to decrease by $12 billion in the upcoming year. Specifically, the winter crop total is forecasted to drop to 46.1 million tonnes, just below the 10-year average. Despite improvements in southern cropping areas, the overall outlook for crop production is not as promising.

As a result, farmers are faced with tough decisions as they navigate their budgets and plan for the next season. Alistair Falconer, president of the WA Grains Group and a farmer in Coorow, emphasized the challenges that growers are currently grappling with. He highlighted the impact of below-average harvests, rising input costs, and stagnant grain prices on farmers' financial decisions. The uncertainty surrounding canola prices and the overall income outlook for the upcoming year are also contributing to the complexity of these decisions.

In addition to crop production, livestock production is also expected to decline due to falling prices. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) anticipates significant income declines for beef and sheep farms, with livestock and product production value projected to decrease by 12% to $31.9 billion in 2023-24. Livestock exports are also forecasted to experience a slight decline of one percent.

ABARES executive David Galeano pointed to declining global prices and the onset of drier conditions as contributing factors to the challenging outlook for agriculture. He noted that the past three years have seen record-breaking crop production, but the shift to an El Nino period is expected to lead to a decrease in national crop production. Consequently, farm cash income for broadacre farms is forecasted to plummet by 64% to $113,000 in the upcoming year, marking a stark contrast to the high returns experienced in previous years.

Overall, the agriculture industry in Australia is facing a period of uncertainty and tough decision-making as growers navigate the complexities of balancing budgets and planning for the next season. The combination of declining production values, rising input costs, and lower global prices presents a challenging landscape for farmers. As they weigh their options and assess the potential impact on their livelihoods, the road ahead remains uncertain.