Uneasy trade relations, unpredictable climate conditions, high freight and logistics costs and the war in Ukraine are the key drivers of agricultural uncertainty as we head into 2023.
That was the message from Peter Gooday from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), speaking at a Plant Industry Forum in November organised by Plant Health Australia.
Peter’s presentation ‘Megatrends influencing Australian agriculture’ also covered longer term global trends impacting farmers including:
- A more contested international trading landscape, with food and fertiliser prices high (the highest fertiliser prices since 2008 and the highest food prices since 2012).
- An increasing number of high-income consumers.
- The need for continued productivity growth.
- Disruptive technologies.
Peter said, more immediately, farmers were grappling with increased freight and logistics costs for bulk and container shipping.
And he said a tense global trading environment continued for Australian agricultural suppliers, with export restrictions still a threat.
Peter also said international cooperation is needed to manage biosecurity risks, with the costs of a foot-and-mouth disease (FMD) outbreak estimated to be around $80bn over 10 years.
And ABARES figures show that the cost of a Khapra beetle incursion is estimated to be $15.5bn over 20 years.
According to ABARES, the gross value of Australian agricultural production is forecast to reach $85 billion in 2022-23, just below the record set the previous year.
The combined value of agriculture, fisheries and forestry production is forecast to reach $91 billion. Extremely high rainfall and low temperatures have led to upgrades to crop production forecasts in many areas adding an additional $4 billion in crop value compared to ABARES September estimates.
ABARES said considerable uncertainty remained over winter crop harvest progress and grain quality in New South Wales and Victoria given ongoing high rainfall, which could lead to downgrades in production value.
“Unfortunately for some producers, seasonal conditions have also created significant challenges. Waterlogging and associated flooding has been widespread on the east coast for a second year, damaging winter crops and delaying harvest,” ABARES said.
“Flooding has also caused widespread logistical issues for supply chains, slowing livestock slaughter, shearing, milk production and deliveries of inputs. It is likely that further severe weather events will occur over summer, so further challenges lie ahead.”
See the ABARES Megatrends influencing Australian Agriculture presentation here.
See the ABARES December Agricultural Overview here.