Rising livestock prices behind agricultural growth

An increasing appetite for Australian red meat in the US and Middle East is driving growth in the agriculture sector, with output expected to hit the third highest result on record.

The Australian Bureau of Agricultural and Resource Economics released its latest forecasts on Tuesday.

Agricultural production is tipped to rise from $82.5 billion last year to $86.2 billion in the 2024/25 financial year, an increase of four per cent.

“Demand for our meat exports is really having a big impact on our meat and veal and our sheep meat prices, so we’re seeing that translate to farm gate prices,” ABARES executive director Jared Greenville told AAP.

There’s a positive story for broadacre farms with the average cash income for those operations to rise by 64 per cent to $192,000 per farm.

“We’re expecting to see the price for cattle and sheep increase compared to last year, leading to this significant improvement in farm incomes,” Dr Greenville said.

Favourable seasonal conditions across large parts of the nation and easing input prices are also supporting farm incomes.

Australian winter crop production is forecast to increase by 17 per cent to 55.2 million tonnes in 2024/25.

“Crop production across Australia has been driven by NSW and Queensland, and better than expected seasonal conditions in Western Australia,” Dr Greenville said.

“But unfavourable conditions in north and western Victoria and most of South Australia following below average winter rainfall have resulted in lower than expected crop production.”

Agricultural exports are set to fall slightly below expectations, driven by lower sugar and cotton prices.

More than $1 billion has been added to the livestock export market thanks to a record high number of beef and veal exports to the United States, and a record value of sheep meat exports to the Middle East.

Overall agricultural exports are forecast to fall by $3.1 billion to $68.5 billion for the financial year.