ABARE cuts farm income estimates

06 Jan, 2001 03:01 PM

RISING costs and a reduced grain harvest have forced the Australian Bureau of Agriculture and Resource Economics (ABARE) to forecast a 12 per cent fall in net value of farm production for 2000-01 to $4.497 billion. Farmers achieved a net value of $5.088b in 1999-2000 and, with prices for beef, wool and wheat all lifting since then, it was hoped the rural sector would pocket even more money this financial year. But even though the gross value of farm production is expected to lift from $30.5b to $31.2b, costs have jumped by an extra $1.4b, too, forcing the forecast downgrade in net value of production. As a result, farmers' terms of trade for 2000-01 has slipped from 94.1 in ABARE's September forecast to 93.7 in its December outlook. While the low value of the Australian dollar is tipped to help farm exports reach a high of $26.4b, it, combined with high fuel prices, has raised farm input costs, too. ABARE estimates that exports account for 64 per cent of farm production and commodities are expected to benefit from the recent export growth. It is forecasting the ASW 10 wheat price to average $210/tonne this financial year, compared with $187/t last year; the saleyard price for beef to average 231c/kg (213c/kg last year); wool to average 700c/kg (627c/kg last year) and manufacturing milk to average 24.3c/litre (20.8c/litre last year). "(But) lower crop production, following unfavourable seasonal conditions in Western Australia, southern Queensland and northern NSW, higher interest costs and rising fuel and fertiliser are forecast to more than offset the impact of improved prices on farm incomes," the ABARE December forecast predicted. Compared with its September forecasts, ABARE has left its 2000-01 average beef price estimate static at 231c/kg, but revised lamb down from 181c/kg to 178c/kg, wool up from 690c/kg to 700c/kg, manufacturing milk up from 22c/litre to 24.3c/litre and wheat up from $190/t to $210/t.


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