Bumper farming conditions are forecast in the coming months in further good news for the agricultural sector.
Rural Bank’s latest Australian Agriculture Outlook report says a stronger and more favourable set of conditions is expected to extend into 2022 with continued improvement in supply and demand.
The bank’s report follows the Australian Bureau of Agricultural and Resource Economics and Sciences last week predicting a record year for Australian farmers thanks to strong growing conditions and high global prices.
ABARES forecast Australia’s agricultural production will reach a record $78 billion in 2021/22, with the most valuable winter crop ever expected worth $22.3 billion.
The Rural Bank’s outlook released on Tuesday analyses the performance of six industries – cattle, cropping, dairy, horticulture, sheep and wool – and predicting increased demand for both export and domestic commodities as the recovery accelerates.
“It’s not often that we get such strong commodity prices and good production and also lower interest rates,” Rural Bank’s Andrew Smith said.
Cattle, winter crops and horticulture are among the key beneficiaries.
Australian beef production is expected to increase by 12 per cent in the first half of 2022 due to more cattle reaching ideal slaughter weights.
“We’ve seen a doubling in prices over the last three years … so cattle producers with young cattle have seen cattle prices well above $2000 a head,” Mr Smith said.
Rural Bank’s forecasts have a 5.6 per cent rise in cattle herds while the national sheep flock could rise as much as four per cent.
Growth in dairy is more subdued with a 1 to 2 per cent increase in production and a farmgate milk price at 6.2 per cent above the five-year average.
Shoppers can enjoy cheaper grapes and avocados this festive season, with a 150 per cent rise in the number of Hass avocados produced.