ABARES expects another productive year

Mr Gooday is an assistant secretary with the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), and his positive note struck a chord with conference delegates.

He acknowledged that unusually this run of good seasons has happened as commodity prices have reached an historically high level.

"That's come together this year 2021-22 with ABARES forecasting the highest ever gross value of agricultural production of $83 billion," Mr Gooday said.

"And looking ahead to next year we are seeing that come down a bit but not by very much."

Mr Gooday said ABARES are forecasting $80 billion for next year on the back off prices coming down a little bit but remaining historically high and from what is expected to be another good production year.

"This sort of record production has allowed farm balance sheets to be re-balanced and in the Riverina like elsewhere what we've seen is a strong rebound in cropping but also livestock," he said.

"Across the broadacre sector in the Riverina they have the highest cash farm incomes we've seen in more than twenty years."

But Mr Gooday cautioned the cropping income potential is dependent on rain and the expected level of return might not be reached.

"The forecast is all contingent on them being able to get the crop in the ground," he said.

"Looking ahead to 2023, there is a fair bit of uncertainty obviously."

Mr Gooday pointed to the impact on grain markets due to the current war in Ukraine and he is also concerned about the logistical problems in getting both Ukrainian and Russian grain into global markets.

"There's also the impact of that on fertiliser and fuel prices and we've still got the impact of COVID in terms of freight and logistics, and then there is what's going to happen with the seasons, not just here but overseas," he said.

"So part of these high prices we've been seeing is because of relatively poor seasons elsewhere and we know that can't last because at some point that will revert to normal.

"We're thinking that it's a good opportunity for the sector to be thinking about what to invest in to make us more resilient going forward."

The continued prosperity depends on three things according to Mr Gooday, and the first one is continued market access.

"We've been doing a good job at market access but we need to keep doing that so we've got opportunities to divert product when disruptions occur and to take advantage of any good luck that comes along," he said.

"We need to keep improving productivity so we can combat the generally poorer climate conditions that we've been seeing over the last thirty years or so.

"We've doing a pretty good job of that but we also need to keep improving productivity because all of our competitors are doing the same."

Mr Gooday said the third thing was the increased focus that consumers have on sustainability attributes of products so farmers need to make sure they're going to be competitive in that arena as well because that's what people are looking for.

"The underlying demand story for agriculture is very good over the long-term," he said.

"By 2050 there's expected to be three billion additional consumers in high income countries demanding the sort of things that we produce.

"And they'll also be, presumably, after these higher sustainability criteria."

But making sure that farmers are in a position to deliver that is a big challenge and the focus of many in the industry.

"Like everything else, every other big agriculture producer thinks they can do the same," he said.

"So we have to make sure that we've got the systems in place so that we can demonstrate how things were grown, where they were grown and what path they took getting to the final consumer."