Farm export earnings are forecast to fall by 8.6% in 2014–15 despite the falling dollar as the effects of the slipping global prices for key commodities such as grain seeds, wool and oilseeds hit the Australian agriculture sector.
The latest Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) December quarter commodities report predicts total export earnings of $37.6 billion, a fall of around $3.7 billion for the financial year, alongside a decline in total farm production volume of 5.9% as drought conditions worsen in New South Wales and Queensland.
ABARES Executive Director Karen Schneider said 2013–14 was a strong year, with record high crop production and this year’s farm export earnings are set to remain 4% above the 10-year average.
“Export earnings for crops are forecast to decline to around $19.3 billion in 2014–15 from $22.8 billion in 2013–14,” she said.
Hardest hit on the export earnings forecasts are cotton (down 37%), canola (down 44%) and barley (36%), with dairy products falling, 20%, wheat, 10%, and wool, 6.2%, offsetting growth in total meat and live animals, as well as higher prices for beef, wine and mutton.
“However the assumed weaker value of the Australian dollar in 2014–15 is expected to partially offset weaker world prices in US dollar terms for such commodities as grains, oilseeds, cotton, sugar and dairy products,” Schneider said.
Contributing to the forecast fall, the index of unit returns for Australian farm exports – a measure of the price received by exporters – is forecast to decline by 1.8% in 2014–15, following a rise of 7.4% last year.
The full report is available here.
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