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Farmers may start returning to normal
27 Jul 2004
The Australian Bureau of Agricultural and Resource Economics expects the net value of farm production to fall 16 per cent over 2004-2005 to $5 billion, which can be attributed to lower global prices, flock and herd rebuilding after the drought, and reduced grain and oilseed production after last year's record harvest.
While a 16 per cent drop in income is not welcome it's at least a change from the boom/bust/recovery of the past five years. In 2000-2001, net value of farm production rose 54 per cent, followed by 42 per cent growth in 2001-2002. Then came the 2002-2003 drought, causing the value of net production to plunge 75 per cent. Then there was a strong recovery, with farm incomes increasing 120 per cent due to a record wheat crop - mainly from WA's bumper harvest.
Although ABARE has not yet released forecasts for each sector's 2004-2005 profit levels, the value of production is expected to fall in each industry apart from sugar and cotton. The value of sugar production should rise 11 per cent and the value of cotton production should rise 51 per cent this year. The value of wheat production is expected to fall 7 per cent and barley is expected to be down 7 per cent. The value of cattle slaughtering is forecast to be down 5 per cent and lamb is expected to drop 3 per cent. Farm costs are expected to rise 1.2 per cent.
Australian Financial Review, 27/7/04.
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