Australia: Agricultural production damaged by recent floods in most eastern states, outlook for exports still looks positive - ABARES

During its Outlook 2011 conference on March 1, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) discussed its assessment of the A$2.3 billion impact of recent floods on agricultural production and exports and provided an outlook for Australia’s commodities over the short- to medium-term, World-Grain.com reports.

“While individual farmers have suffered as a result of the floods, overall the national outlook for agricultural production and exports looks positive,” ABARES’ Chief Commodity Analyst Dr. Jammie Penm said. “Loss of agricultural production and exports due to the recent adverse climatic conditions is estimated to have been A$2.3 billion in 2010-11, with significant impacts on production of cereals, sugar, fruit and vegetables, cotton and grain sorghum. Excessive rainfall in late November and through mid-December caused considerable disruption to the winter grain harvest and a significant downgrading of crop quality.

“Continued rainfall and flooding in late December and through January caused further significant damage to agriculture in most of the eastern states, as well as in the Gascoyne region of Western Australia.”

ABARES’ Executive Director Phillip Glyde said the outlook was generally positive for commodity production and exports.

“Despite the recent adverse weather impacts, the value of farm exports is forecast to rise by around 9% to A$31.2 billion in 2010-11, before increasing by a further 4.4% to A$32.5 billion in 2011-12,” Glyde said.

Glyde emphasized the importance of lifting agricultural productivity to counter any adverse impacts that may arise in the future, from climate variability, pest and disease pressures, market fluctuations and economic downturns.

“In terms of productivity, ABARES research indicates that domestic public-sector R&D and associated extension activities account for around one-third of the broad acre productivity gains achieved over the past 50 years,” Glyde said. “Now is the time to increase our research capacity and not to reduce it.”

ABARES also said that commodity exports will exceed A$250 billion in 2011-12.

ABARES’ Deputy Executive Director Paul Morris said earnings from Australia’s commodity exports are forecast to rise by 14% to a record of A$251 billion in 2011-12, following a forecast strong increase of 29% to A$221 billion in 2010-11.

“Over the medium term, commodity export earnings are projected to be maintained around this value in real terms, reaching around A$255 billion in today’s dollars by 2015-16,” Morris said.

For farm products, the value of exports is forecast to rise by 4.4% to A$32.5 billion in 2011-12, following an expected increase of around 9% to A$31.2 billion in 2010-11.

Despite the adverse impact of recent excessive rainfall and floods, the forecast value of farm exports in 2010-11 represents an upward revision of around A$1 billion from the forecast released by ABARES in December, mainly reflecting the effect of recent significant increases in agricultural prices on world markets.

World prices for grains and oilseeds have increased substantially because of shortfalls in production in some of the major exporting countries. Producers in many producing countries are expected to respond to current high prices by increasing production next season.

02 March, 2011