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AGRICULTURAL COMMODITIES

RESEARCH BY THE AUSTRALIAN BUREAU OF AGRICULTURAL AND RESOURCE ECONOMICS AND

SCIENCES

SEPTEMBER QUARTER 2013

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ABARES 2013, Agricultural commodities: September quarter 2013, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

ISSN 189-5619 (printed)ISSN 189-5629 (online)ISBN 978-1-74323-146-3 (printed)ISBN 978-1-74323-135-6 (online)ABARES project 43006

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Agricultural commodities: September quarter 2013 is available at daff.gov.au/abares/publications.

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ContentsRegional Outlook conferences 2013 – Future food, future farming....................9

Economic overview.......................................................................................10Global economic growth remains subdued in 2013.................................................10Economic prospects in Australia's major export markets.........................................13Economic prospects in Australia..............................................................................21Outlook for Australian agricultural, fisheries and forestry exports...........................24Understanding ABARES agricultural forecasts.........................................................24

Agriculture - Crops.......................................................................................30Wheat......................................................................................................................30Coarse grains...........................................................................................................37Oilseeds...................................................................................................................47Sugar.......................................................................................................................55Cotton......................................................................................................................64Wine grape production projections to 2014-15........................................................73

Agriculture - Livestock.................................................................................81Beef and veal...........................................................................................................81Sheep meat and wool..............................................................................................95Pig meat................................................................................................................102Chicken meat.........................................................................................................106Dairy......................................................................................................................109

Farm debt: farm level analysis....................................................................116Change in aggregate farm debt.............................................................................116Trends in average debt per farm...........................................................................117Broadacre farm debt..............................................................................................118Dairy farm debt.....................................................................................................120Principal repayment...............................................................................................122Farm equity...........................................................................................................123Distribution of farms by debt and equity...............................................................123Trends in farm performance and debt servicing....................................................126Role of debt and equity in managing income variability........................................127The importance of maintaining farm equity...........................................................128Conclusion.............................................................................................................130References.............................................................................................................131

Statistical tables........................................................................................132Import markets......................................................................................................134Export markets......................................................................................................135Prices.....................................................................................................................138Costs and returns...................................................................................................140Exports..................................................................................................................142Sectors...................................................................................................................143Employment, banks...............................................................................................144Farm debt, world prices.........................................................................................145Gross unit values...................................................................................................146World.....................................................................................................................147Australian production.............................................................................................149Value of production................................................................................................152Areas, stock...........................................................................................................155Yields.....................................................................................................................156Export volumes......................................................................................................157Export values.........................................................................................................159Forest exports........................................................................................................162

Forest imports........................................................................................................164Fisheries exports....................................................................................................166Fisheries imports...................................................................................................167Agricultural exports...............................................................................................169Forestry trade........................................................................................................175Fisheries trade.......................................................................................................176Food exports..........................................................................................................177Food imports..........................................................................................................178Food trade.............................................................................................................180

Report extracts..........................................................................................182ABARES reports released since Agricultural commodities (vol. 3 no. 2 June quarter 2013).....................................................................................................................182Research reports...................................................................................................182Technical reports...................................................................................................184Other reports.........................................................................................................185

ABARES contacts............................................................................................................188

List of FiguresWorld economic growth....................................................................................................10Regional economic growth...............................................................................................11US unemployment rate.....................................................................................................14OECD economic growth....................................................................................................15China's export growth (change from corresponding quarter of previous year).................16Japan industrial production and exports...........................................................................18Real gross capital formation in selected European countries, year-on-year percentage change..............................................................................................................................19Unemployment rates in selected European economies....................................................19Economic growth in Asia...................................................................................................21Australian economic indicators.........................................................................................22Australian exchange rate..................................................................................................23Forecasts and actual outcome of winter crop production, Australia, 2012-13..................26Major Australian agricultural, fisheries and forestry commodity exports..........................29World wheat prices, monthly............................................................................................30World wheat production....................................................................................................31United States winter wheat, estimated abandonment rate, selected states.....................32World wheat closing stocks...............................................................................................34Australian wheat exports..................................................................................................35World coarse grains prices................................................................................................37World coarse grains prices, monthly.................................................................................38US corn condition, percentage rated good to excellent....................................................39Corn production, Brazil.....................................................................................................40Barley production major exporters...................................................................................41World coarse grains consumption.....................................................................................42Corn trade, the four major corn exporters........................................................................43World coarse grains closing stocks...................................................................................44Australian barley production.............................................................................................45Australian coarse grains exports......................................................................................45World canola supply and price..........................................................................................47Soybean production changes, major producers, 2013-14.................................................49Production, crush and exports of sunflower seed, Ukraine...............................................50Food consumption of oilseeds, China................................................................................51Soybean meal imports, Australia......................................................................................53Indicator price, Intercontinental Exchange (daily, ended 11 September 2013)................55World sugar indicators......................................................................................................56

Change in world sugar production....................................................................................56Sugar cane production and allocation, Brazil....................................................................57Brazil domestic prices, monthly........................................................................................57Shares of world sweetener consumption (white sugar equivalent), by sweetener type....59High fructose corn syrup, sugar and corn prices...............................................................60Changes in world sugar exports, by country.....................................................................61World stocks-to-use ratio..................................................................................................62Australian sugar production, exports and returns to cane growers...................................63Monthly cotton prices.......................................................................................................64World cotton indicators.....................................................................................................65Changes in world cotton production, by country...............................................................65Cotton area and lint yield in the United States.................................................................66Cotton indicators, India.....................................................................................................67Indian domestic cotton prices...........................................................................................68Operations of the Cotton Corporation of India..................................................................68World weekly apparel fibre prices.....................................................................................69Stocks-to-use ratios for cotton..........................................................................................70Storage levels of main irrigation dams, at 12 September 2013........................................71Australian cotton production, exports and gin-gate returns..............................................72Australian wine grape production, by category................................................................75Australian production of top three white varieties............................................................76Australian production of top three red varieties...............................................................76Australian cattle slaughter and weighted average saleyard price....................................81Rainfall deficiency for Australia, 12 months to 31 August 2013........................................82Australian beef and veal exports......................................................................................84Beef and veal imports, Japan............................................................................................85Australian beef and veal exports to the United States......................................................86Australian beef and veal exports to China........................................................................87Australian feeder and slaughter cattle exports to Malaysia, Philippines, Brunei Darussalam and Vietnam.....................................................................................................................89Australian breeder and dairy cattle exports......................................................................90Australian sheep exports, by destination..........................................................................91Sirloin beef prices, Kebayoran Lama wet market, Indonesia.............................................92Cattle population, Indonesia.............................................................................................93Net beef supply, Indonesia...............................................................................................93Australian lamb, sheep and wool prices............................................................................95Australian sheep flock......................................................................................................96Australian average lamb carcass weight by state.............................................................97Australian wool micron profile..........................................................................................98Australian lamb exports by destination............................................................................99Australian wool exports by destination...........................................................................100Australian pig meat production and weighted average price..........................................102Australian pig-to-feed price ratios, quarterly, ended June 2013......................................103Australian pig meat consumption...................................................................................104Australian pig meat imports...........................................................................................104Australian pig meat exports............................................................................................105Australian chicken meat exports....................................................................................107Australian cooked chicken meat imports........................................................................108World dairy prices...........................................................................................................109EU milk production, selected countries, year-on-year change, 2012-13.........................110US skim milk powder exports, by destination.................................................................111New Zealand dairy cows.................................................................................................112China whole milk powder................................................................................................113Australian milk production and dairy cows.....................................................................114Bank lending to agriculture, fishing and forestry sectors................................................117Interest rate paid, average for broadacre and dairy farms.............................................118Broadacre farm debt, average per farm.........................................................................119Debt per sheep equivalent a, average by broadacre industry........................................120Dairy farm debt, average per farm.................................................................................121

Change in farm business debt, dairy farms Australia......................................................121Change in farm business debt and equity, broadacre farms Australia............................122Change in farm business debt and equity, dairy farms Australia....................................123Interest payments as a percentage of farm receipts, average per farm with debt, broadacre and dairy farms.............................................................................................126Farm cash income, broadacre and dairy farms...............................................................127Debt servicing and borrowing capacity, broadacre farms...............................................128Debt servicing and borrowing capacity, dairy farms.......................................................129FIGURE 1 Contribution to GDP Australia, chain volume measures, reference year 2010-11.......................................................................................................................................132FIGURE 2 Markets for Australian merchandise exports in 2012-13 dollars......................133FIGURE 3 Sources of Australian merchandise imports in 2012-13 dollars.......................134FIGURE 4 Principal markets for Australian agricultural, forestry and fisheries exports (nominal)........................................................................................................................135FIGURE 5 Contribution to exports by sector, balance of payments basis Australia.........142

List of TablesKey macroeconomic assumptions.....................................................................................11Price forecasts and actual outcomes of selected agricultural commodities in 2012-13....25Major indicators of Australia's agriculture and natural resources based sectors...............27Wheat outlook..................................................................................................................35Coarse grains outlook.......................................................................................................46Oilseeds outlook...............................................................................................................53Sugar outlook...................................................................................................................63Cotton outlook..................................................................................................................72Estimated and projected wine grape production in Australia, by zone.............................77Estimated and projected wine grape bearing; areas in Australia, by zone........................78Beef and veal outlook.......................................................................................................88Outlook for live cattle and sheep exports.........................................................................91Indonesian trade restrictions for cattle and beef imports.................................................94Sheep meat and wool outlook.........................................................................................101Pig meat outlook.............................................................................................................105Chicken meat outlook.....................................................................................................108Dairy/ outlook.................................................................................................................115Distribution of broadacre farms, by farm business debt and equity ratio at 30 June 2012 pa (Percentage of farms)................................................................................................124Distribution of dairy farms, by farm business debt and equity ratio at 30 June 2012 pa (Percentage of farms).....................................................................................................125TABLE 1 Indexes of prices received by farmers Australia...............................................138TABLE 2 Indexes of prices paid by farmers, and terms of trade Australia.......................139TABLE 3 Farm costs and returns Australia......................................................................140TABLE 4 Volume of production indexes Australia............................................................143TABLE 5 Industry gross value added a, b Australia.........................................................143TABLE 6 Employment a, b Australia................................................................................144TABLE 7 All banks lending to business a Australia..........................................................145TABLE 8 Rural indebtedness to financial institutions a Australia.....................................145TABLE 9 Annual world indicator prices of selected commodities....................................145TABLE 10 Gross unit values of farm products a..............................................................146TABLE 11 World production, consumption, stocks and trade for selected commodities a.......................................................................................................................................147TABLE 12 Agricultural, fisheries and forestry commodity production Australia...............149TABLE 13 Gross value of farm and fisheries production Australia...................................152TABLE 14 Crop areas and livestock numbers Australia...................................................155TABLE 15 Average farm yields Australia.........................................................................156TABLE 16 Volume of agricultural and fisheries exports Australia a.................................157TABLE 17 Value of agricultural, fisheries and forestry exports (fob) Australia a.............159

TABLE 18 Volume of forest products exports Australia...................................................162TABLE 19 Value of forest products exports (fob) Australia..............................................163TABLE 20 Volume of forest products imports Australia...................................................164TABLE 21 Value of forest products imports Australia......................................................164TABLE 22 Volume of fisheries products exports Australia...............................................166TABLE 23 Value of fisheries products exports (fob) Australia.........................................166TABLE 24 Volume of fisheries products imports Australia...............................................167TABLE 25 Value of fisheries products imports Australia..................................................168TABLE 26 Agricultural exports to Japan (fob) Australia a................................................169TABLE 27 Agricultural exports to the United States (fob) Australia a..............................171TABLE 28 Agricultural exports to China (fob) Australia a................................................173TABLE 29 Value of Australian forest products trade, by selected countries....................175TABLE 30 Value of Australian fisheries products trade, by selected countries Australia. 176TABLE 31 Food exports by level of transformation Australia...........................................177TABLE 32 Food imports by level of transformation Australia..........................................178TABLE 33 Total food exports, by selected destination Australia.....................................180TABLE 34 Total food imports, by selected source country Australia...............................181

Regional Outlook conferences 2013 – Future food, future farmingABARES is delivering commodity forecasts, research and analysis directly to rural and regional Australia again in 2013.

Promoting discussion on industry productivity, community vitality and environmental sustainability, the 2013 conferences will balance national and regional perspectives; focus on the future; and emphasise agricultural, fisheries and forestry strategies that work in a context of economic volatility and climatic variability.

ABARES invites collaboration from regional, state and national agencies to focus on industries and issues relevant to each region.

Delegates from businesses, government, and the community will discuss industry trends, access forecasts and other information, make new contacts in their community and be exposed to new ideas while gaining an understanding of global issues that affect their region.

From 2013 ABARES is producing papers profiling agricultural, fisheries and forestry activities for 49 regions across Australia. These regional profiles can be accessed from the ABARES website.

2013 locations and dates

Tasmania Hobart 1 May

Victoria Cardinia 2 May

Queensland Townsville 12 June

South Australia Coonawarra 30 July

Western Australia Northam 1 August

New South Wales Tamworth 4 September

Northern Territory Darwin 10 October

For inquiries and to register your interest contact

Anna CarrDirector, ResearchEngagement and OutlookPhone +61 2 6272 2287Email [email protected]

daff.gov.au/abares/regional

http://daff.gov.au/abares/regional


Economic overviewJenny Eather, Patrick Hamshere and Brian Moir

Following growth of 3.2 per cent in 2012, world economic growth is assumed to remain subdued at 3.0 per cent in 2013, improving to 3.9 per cent in 2014.

Emerging economies are expected to continue to be the main drivers of growth, despite slower growth in China and India.

Economic growth in OECD economies is assumed to remain slow, while private demand is assumed to strengthen in the United States.

The Australian dollar depreciated by 12 per cent against the US dollar between mid April and the end of June 2013, and is assumed to average around US92 cents in 2013-14.

Global economic growth remains subdued in 2013Global economic growth has been relatively subdued since the beginning of 2013. Recovery in OECD economies has continued at a slow pace, but market sentiment has improved in recent months. Activity in emerging economies, particularly in Asia, continues to underpin world economic growth. However, the outlook has weakened for some emerging markets in the last three months due to concerns about capital flow reversals and exchange rate volatility.

World economic growth

a ABARES assumption.

Demand in OECD economies is assumed to remain weak in the short term. In the United States, private demand is expected to continue its gradual recovery, despite large government spending cuts and a possible slowdown in the pace of asset purchases by the Federal Reserve. Western Europe is assumed to remain in recession in 2013, before returning to modest growth in 2014.

ABARES 10Agricultural commodities – vol. 3 no.3 September quarter 2013

In preparing this set of agricultural commodity forecasts, world economic growth is assumed to average 3.0 per cent in 2013 and improve to around 3.9 per cent in 2014. For OECD economies as a whole, economic growth is assumed to be around 1.1 per cent in 2013, before strengthening to 2.0 per cent in 2014.

For non-OECD Asian economies, the short-term outlook remains positive. Domestic demand in many non-OECD Asian economies has been relatively robust, limiting the effect of weak external demand on growth. Economic growth for developing countries as a whole is assumed to average 5.3 per cent in 2013, before strengthening to 5.9 per cent in 2014.

Regional economic growth


Key macroeconomic assumptions

World - Economic growth unit 2011 2012 2013 a 2014 a

OECD % 1.6 1.2 1.1 2.0United States % 1.8 2.8 1.7 2.5Japan % - 0.6 2.0 1.8 1.2Western Europe % 1.7 - 0.2 - 0.2 1.2- Germany % 3.1 0.7 0.3 1.5- France % 1.7 0.0 - 0.2 0.9- United Kingdom % 0.9 0.2 0.8 1.5- Italy % 0.4 - 2.4 - 1.8 0.5Korea, Rep. of % 3.6 2.0 2.5 3.5New Zealand % 1.4 2.5 2.7 3.0


World - Economic growth unit 2011 2012 2013 a 2014 a

Developing countries % 6.7 5.6 5.3 5.9- non-OECD Asia % 8.1 6.6 6.5 7.0

South-East Asia b % 4.5 6.1 5.6 5.7China c % 9.3 7.7 7.3 7.6Taiwan % 4.1 1.3 2.6 3.8Singapore % 5.2 1.3 2.0 3.6India % 7.7 4.0 5.0 6.3

- Latin America % 4.6 3.0 3.3 3.9Russian Federation % 4.3 3.4 2.3 3.3Ukraine % 5.2 0.2 - 0.2 2.6Eastern Europe % 5.2 1.6 2.2 2.8World d % 4.0 3.2 3.0 3.9

World - Inflation unit 2011 2012 2013 a 2014 a

United States % 3.2 2.1 1.8 1.9

World - Interest rates unit 2011 2012 2013 a 2014 a

US prime rate e % 3.3 3.3 3.3 3.3

Australia unit 2010-11 2011-12 2012-13 2013-14 a

Economic growth % 2.4 3.4 2.8 2.5Inflation % 3.1 2.4 2.3 2.2Interest rates g % 6.6 6.2 5.3 5.1

Australian exchange rates unit 2010-11 2011-12 2012-13 2013-14 a

US$/A$ — 0.99 1.03 1.02 0.92TWI for A$ h — 74 76 77 72a ABARES assumption. b Indonesia, Malaysia, Philippines, Thailand and Vietnam. c Excludes Hong Kong. d Weighted using 2012 purchasing-power-parity (PPP) valuation of country gross domestic product by the International Monetary Fund. e Commercial bank prime lending rates in the United States. g Large business weighted average variable rate on credit outstanding. h Base: May 1970 = 100.Sources: ABARES; Australian Bureau of Statistics; International Monetary Fund; Organisation for Economic Co-operation and Development; Reserve Bank of Australia


Economic prospects in Australia's major export marketsUnited States

Economic growth in the United States was slower in the first half of 2013, largely due to government spending cuts. Real gross domestic product rose at a year-on-year rate of 1.6 per cent in the June quarter 2013 following growth of 1.3 per cent (year-on-year) in the March quarter. This compares with 2.8 per cent for 2012 as a whole.

Government consumption fell at a year-on-year rate of 2.1 per cent in the June quarter 2013, after falling by 1.8 per cent in the March quarter. A large proportion of spending cuts have come from national defence spending, which decreased at a year-on-year rate of 6.1 per cent in the June quarter, following similar decreases in the previous two quarters. According to the US Congressional Budget Office, reduced public sector demand will subtract around 1.5 percentage points from economic growth in 2013.

Consumer spending, which accounts for around 70 per cent of gross domestic product, has continued to expand at a similar rate to 2012, despite tax increases at the beginning of 2013 that reduced take-home pay by more than 5 per cent. Consumer spending grew at a year-on-year rate of 1.8 per cent in the June quarter 2013, after expanding by 1.9 per cent in the March quarter. This compares with growth of 2.2 per cent for 2012 as a whole.

Over the outlook period improvements in consumer spending are expected to be supported by strengthening labour and housing markets. Median new house prices increased by 11 per cent year-on-year in the June quarter 2013 and new housing starts increased to their highest level since 2008. Non-farm employment expanded at an average rate of 195 000 positions per month in the first half of 2013, up from an average of 183 000 positions per month in 2012. However, unemployment in June 2013 remained unchanged from three months earlier at 7.6 per cent.

US unemployment rate

Growth in industrial production slowed in the June quarter 2013, expanding by 1.8 per cent year-on-year compared with 2.4 per cent in the March quarter and 3.6 per cent for 2012 as a whole. Export growth has also been relatively weak in recent quarters,


increasing at a year-on-year rate of 1.0 per cent and 2.1 per cent in the March and June quarters 2013, respectively, compared with 3.5 per cent for 2012 as a whole.

In recent months the US Federal Reserve announced plans to reduce the pace of asset purchases later this year if the economy continues to grow as expected. The exact timing of the reduction in monetary stimulus adds uncertainty to the outlook, as a sudden reduction in monetary stimulus could lead to growth lower than currently assumed. However, officials have stressed that reductions in asset purchases will depend on continued improvements in the labour market.

In the short term, economic growth in the United States is assumed to remain relatively modest, with reduced public sector demand a key factor holding back economic growth. Further public spending cuts may result if Congress does not raise the debt ceiling by October 2013, which according to Treasury Department projections is when the United States will reach the limit. Economic growth is assumed to average 1.7 per cent in 2013, increasing to 2.5 per cent in 2014, in line with strengthening private demand and a slowing pace of fiscal consolidation.

OECD economic growth


China

Economic growth in China was 7.5 per cent year-on-year in the June quarter 2013, compared with 7.7 per cent in the March quarter and 7.7 per cent for 2012 as a whole. June 2013 was the fifth straight quarter in which the economy grew by less than 8 per cent.

Subdued external demand contributed to China's slowdown. China's exports have been weak in recent months, but closer monitoring to reduce misreporting of exports was also a factor in the weaker figures for the June quarter 2013. In the quarter, exports grew by 3.7 per cent year-on-year, down from 18.3 per cent in the March quarter and 7.9 per cent for 2012 as a whole. While a strengthening in world economic growth is likely to support China's export performance in 2014, this outlook is uncertain because of downside risks associated with recoveries in the United States and Europe.


China's export growth (change from corresponding quarter of previous year)

The slower growth seen in recent quarters also reflects China's stage of development. In the past China was able to achieve rapid growth through high rates of investment and by moving surplus agricultural workers into higher paying factory jobs. Investment remains relatively strong in China, with fixed asset investment increasing at a year-on-year rate of 20 per cent in the June quarter 2013, compared with 21 per cent in both the March quarter and 2012 as a whole. However, continued high rates of investment are contributing to excess capacity in some sectors.

In the first half of 2013 the new leadership in China announced that slower growth is acceptable in the short term while much needed reforms are implemented to put China on a more sustainable growth path. Planned reforms focus on increasing domestic demand as a source of growth and increasing the efficiency and stability of the financial system.

This contrasts with the policies of the previous leadership that relied on rapid credit expansion and large infrastructure projects to boost short-term growth after the global financial crisis. Large liquidity injections to boost short-term growth are less likely than in recent years. This is because of increasing concerns by government officials about vulnerabilities in the financial system, such as high levels of local government debt and rapid growth in the size of the unregulated banking system.

Despite this decreased willingness to adopt monetary stimulus, moderate inflation does give policymakers scope to implement accommodative monetary policy if growth decelerates sharply. Inflation increased slightly in June 2013, but has remained under the Chinese Government's target of 3.5 per cent since March 2012. Consumer prices grew year-on-year by 2.7 per cent in June 2013 compared with the same month last year, after growing by 2.1 per cent in the year to May.

In preparing these agricultural commodity forecasts, economic growth in China is assumed to average 7.3 per cent in 2013, improving to 7.6 per cent in 2014 in line with strengthening external demand.


Japan

Economic activity in Japan has strengthened in recent months, expanding at a year-on-year rate of 1.2 per cent in the June quarter, compared with growth of 0.3 per cent in the March quarter 2013 and 0.4 per cent in the December quarter 2012.

Recent economic growth was largely a result of accommodative fiscal and monetary policy, including a 10.3 trillion yen fiscal stimulus measure announced by the Japanese Government in January 2013. Public sector demand contributed 0.9 percentage points to economic growth in the June quarter 2013, increasing at a year-on-year rate of 3.5 per cent in the June quarter 2013. This followed increases of 3.5 per cent in the March quarter and 4.2 per cent for 2012 as a whole.

Private sector demand strengthened a little in the June quarter, but remained weak largely reflecting reduced non-residential investment. Private sector demand increased at a year-on-year rate of 0.7 per cent in the June quarter 2013, compared with declines of 0.1 per cent and 0.2 per cent in the March and December quarters, respectively. Household spending grew at a year-on-year rate of 1.7 per cent in the June quarter 2013, up from 1.0 per cent in the March quarter.

In the near term, private sector activity is expected to be supported by government spending and an easing of monetary conditions, as the Bank of Japan attempts to achieve a 2 per cent inflation target. Growth is expected to ease in 2014, largely reflecting planned measures to reduce Japan's public debt. An increase in the value added tax of 3 percentage points is planned for April 2014.

Exports have recovered in recent months growing at a year-on-year rate of 7.4 per cent in June 2013 following 10.1 per cent growth in May. This is an improvement on the weak export performance of 2012 as a whole when exports decreased by 2.7 per cent. Exports were supported by depreciation of the yen by 11 per cent against the US dollar in the first seven months of 2013. Despite strong export growth, industrial production remains relatively weak. Industrial production decreased at a year-on-year rate of 4.6 per cent in June 2013 and remains 11.8 per cent below a recent high in March 2012. This suggests that many exporters responded to stronger demand by running down inventories rather than increasing production. Consistent with this, inventory disinvestment shaved 0.5 percentage points off the economic growth rate in the June quarter. With inventories now at reduced levels, it is expected that production will increase in the short term to meet export demand.


Japan industrial production and exports

In preparing these agricultural commodity forecasts, economic growth in Japan is assumed to average 1.8 per cent in 2013. It is assumed to ease to 1.2 per cent in 2014, reflecting a more moderate stance on fiscal policy.

Western Europe

Economic conditions were difficult in Western Europe in the first half of 2013, but showed signs of improvement in the June quarter. Real gross domestic product declined year-on-year in Italy by 2.8 per cent and in the United Kingdom by 1.3 per cent in the March quarter 2013. In the June quarter, the UK returned to positive growth, expanding at a year-on-year rate of 0.7 per cent, while the contraction in Italy eased slightly. Output also declined in Germany in the March quarter by 1.6 per cent year-on-year, although large-scale flooding in the south and north east of the country was largely to blame. Growth rebounded in the June quarter at a year-on-year rate of 0.9 per cent.

Fiscal austerity measures have adversely affected growth in Western Europe although the rate of fiscal consolidation has eased in 2013 in all countries except France.

Domestic demand in Western Europe increased in the June quarter 2013, but remains relatively weak. Consumption expenditure in France increased at a year-on-year rate of 0.9 per cent, up from 0.1 per cent in the March quarter and 0.2 per cent in 2012 as a whole. Similarly, in Germany, consumption expenditure increased by 1.1 per cent year-on-year in the June quarter after declining 0.2 per cent in March.

Declines in investment have also contributed to low growth across Western Europe. For example, real gross capital formation in France declined by 2.0 per cent year-on-year in the June quarter 2013, following a decline of 6.2 per cent in the March quarter as public and private investment contracted.


Real gross capital formation in selected European countries, year-on-year percentage change

Demand for exports between European countries has remained weak. In May the real value of exports from EU countries to countries outside the European Union increased at a year-on-year rate of 8 per cent. However, this was almost completely offset by a 3.3 per cent decrease in intra-European trade, which makes up a larger proportion of EU country exports.

Unemployment remains high in most countries. In France, the unemployment rate reached 11 per cent in June 2013. In Italy, the unemployment rate remains above 12 per cent. In contrast to most of its neighbours, German unemployment remained steady at 5.4 per cent over the year to June 2013, the lowest unemployment rate for Germany in decades.

Unemployment rates in selected European economies


In preparing these agricultural commodity forecasts, economic activity in Western Europe is assumed to contract by 0.2 per cent in 2013 as modest growth in the United Kingdom and Germany is expected to be outweighed by contractions in France and Italy. Some recovery is expected in 2014, when growth is assumed to be 1.2 per cent with increased private sector demand and a slower pace of fiscal consolidation.

Non-OECD Asia

Economic growth in non-OECD Asia slowed in the first quarter of 2013. In the second quarter, economic performance was mixed, with some countries showing signs of recovery and others continuing to slow. For example, economic activity in Singapore increased at a year-on-year rate of 3.7 per cent in the June quarter 2013, up from 0.2 per cent in the March quarter and 1.3 per cent in 2012 as a whole. In Indonesia, economic growth slowed to 5.8 per cent year-on-year in the June quarter, down from 6.0 per cent in the March quarter and 6.3 per cent in 2012.

For many economies in the region, moderation of growth in the first half of 2013 was largely a result of subdued export demand from the United States, Europe and China. Because exports account for a relatively large share of economic activity in many Asian economies, declining exports can have an adverse effect on general economic activity. In Malaysia, exports fell at a year-on-year rate of 6.9 per cent in the month of June 2013, as manufacturing growth slowed to 1.5 per cent, down from 3.1 per cent in May.

In response to moderating growth, most governments in the region adopted accommodative monetary or fiscal policy to support demand in the first five months of 2013. However, since May 2013 some countries have raised interest rates amid concerns about capital outflows. Since the US Federal Reserve's announcement that it would probably slow the rate of asset purchases later this year, bond yields in the United States have risen and differentials between US bonds and assets from emerging markets have narrowed. Capital inflows that were attracted by relatively high interest rates in some Asian countries have now begun to reverse.

Capital outflows can lead to increased inflationary pressures through the effect on the exchange rate. Capital outflows reduce demand for domestic currency, leading to currency depreciation. Imported goods become more expensive as a result. For example, Indonesia cited concerns about the inflationary impact of the fall in the rupiah as a reason for increasing the interest rate in July.

India is particularly vulnerable to capital outflows. As market sentiment toward US assets has improved, investors have become increasingly concerned about the sustainability of India's fiscal and current account imbalances. On 28 August 2013 the rupee fell to a record low against the US dollar as investors sold off Indian assets. Recent capital control and liquidity tightening measures have so far done little to contain inflation or the depreciation of the rupee. The outlook for India is uncertain as tighter monetary policy can be expected to reduce domestic demand.

For non-OECD Asia as a whole, economic growth is assumed to average 6.5 per cent 2013 and 7.0 per cent in 2014.


Economic growth in Asia


Economic prospects in AustraliaEconomic growth slowed slightly in the first half of 2013. Real gross domestic product expanded at a year-on-year rate of 2.5 per cent in the March quarter, followed by 2.6 per cent in the June quarter, down from 3.1 per cent in the December quarter 2012. Business investment is likely to continue to support domestic demand in the short term despite declines in recent quarters. Growth in consumer spending weakened in the June quarter due to slower wage growth. However, record low interest rates are stimulating recovery in the housing market.

Economic growth in Australia is assumed to average 2.5 per cent in 2013-14 following growth of 2.8 per cent in 2012-13.

Australian economic indicators


a ABARES assumption. b Large business weighted average variable rate on credit outstanding.

Inflation

Inflation in Australia remains modest. The consumer price index rose by 2.4 per cent year-on-year in the June quarter 2013, compared with 2.5 per cent in the March quarter.

The most significant price rises in the June quarter included medical and hospital services (up 3.4 per cent), tobacco (3 per cent), new dwelling purchases by owner-occupiers (0.9 per cent), furniture (4.8 per cent) and rents (1.1 per cent). Partially offsetting these rises were domestic holiday travel and accommodation (down 4 per cent) and automotive fuel (3.1 per cent).

Slower growth in consumer demand is expected to limit upward pressure on consumer prices, although prices for imported goods are expected to rise as they gradually respond to the recent depreciation of the Australian dollar. Unemployment increased slightly in June to 5.7 per cent. Soft labour market conditions are expected to lead to relatively weak consumption and price growth over the outlook period.

In 2013-14 inflation is assumed to average 2.2 per cent, compared with 2.3 per cent in 2012-13.

Australian exchange rate

The Australian dollar depreciated by 12 per cent against the US dollar between mid April and the end of June 2013 and subsequently averaged US91 cents in the first six weeks of 2013-14. For 2012-13 as a whole, the dollar averaged US102 cents, down slightly from US103 cents in 2011-12. Recent depreciation of the dollar reflected two main factors. First, market sentiment toward the US dollar improved in the second quarter of 2013 as signs of US economic recovery emerged. Second, world commodity prices have weakened over the past 18 months, leading to a decline in Australia's terms of trade.

In preparing these agricultural commodity forecasts, the Australian dollar is assumed to average around US92 cents for 2013-14 as a whole. On a trade-weighted basis, it is assumed to average around TWI 72 for the year.

While the recent depreciation of the Australian dollar will provide support for Australia's export and import competing industries, the value of the Australian exchange rate remains relatively high in historical terms. Over the past two decades to 2013, the Australian dollar averaged around US75 cents.

Several factors support the assessment of a relatively high Australian dollar against the US dollar for the remainder of the year, although this outlook is uncertain. While recent partial indicators suggest a strengthening in the pace of US economic recovery, uncertainty over the stance of US fiscal policy means recovery in US private sector demand is assumed to be gradual. By contrast, economic growth in Australia is assumed to average 2.5 per cent in 2013-14, higher than the assumed growth rate of around 2 per cent for the US economy over this period. Relatively strong economic performance in Australia is expected to provide support for the Australian dollar.

In addition, assumed strengthening of world economic growth in 2014 is expected to increase commodity demand, supporting Australia's export performance. This is also likely to improve financial market sentiment toward the Australian dollar, especially in the latter part of 2013-14.


However, further depreciation of the dollar could occur if growth in China is weaker than expected, if US recovery outperforms current expectations, or the interest rate differential between Australia and the United States narrows further. Given the uncertainty over movement in the Australian dollar, primary producers and exporters will need to manage risks associated with fluctuations in the Australian exchange rate.

Australian exchange rate


Outlook for Australian agricultural, fisheries and forestry exportsThe total volume of farm production is forecast to increase by around 1.7 per cent in 2013-14, following a decline of 2.9 per cent in 2012-13. This largely reflects higher forecast crop production.

The index of crop production is forecast to increase by 2.7 per cent in 2013-14, after declining by 7.7 per cent in 2012-13. This mainly reflects a forecast increase in wheat (10.8 per cent), barley (13.5 per cent) and grain sorghum production (17.3 per cent).

The volume of livestock production is forecast to remain largely unchanged in 2013-14, as forecast declines in lamb and sheep turn-offs mainly offset a modest increase in beef and veal production. This follows an increase of 3.5 per cent in 2012-13.

The index of unit export returns for Australian farm commodities is forecast to increase by 3.3 per cent in 2013-14, after declining by 2.6 per cent in 2012-13. In 2013-14 higher expected world prices for dairy products, wool and lamb and an assumed depreciation of the Australian dollar are expected to more than offset the effect on unit export returns of forecast lower world prices for most grains and oilseeds.

Export earnings from farm commodities are forecast to be around $37.2 billion in 2013-14, slightly lower than in 2012-13 ($38 billion). In 2013-14 export earnings are forecast to fall for wheat (by 4 per cent), barley (by 7 per cent), canola (by 33 per cent), rice (by 11 per cent), grain sorghum (by 41 per cent), cotton (by 16 per cent) and sugar (by 10 per


cent). Partially offsetting these declines are forecast increases in export earnings for wine (up 8 per cent), beef and veal (up 6 per cent) and dairy products (up 15 per cent).

Export earnings for crops are forecast to fall by 8.1 per cent in 2013-14 to $21.2 billion, following a rise of 6.6 per cent in 2012-13. This largely reflects the effect of the smaller crop produced in 2012-13 being exported in 2013-14. Export earnings from livestock products are forecast to increase by 7.6 per cent to $16.1 billion in 2013-14, following an increase of 1.4 per cent in 2012-13. The increase largely reflects forecast higher prices for lamb and dairy products on world markets.

Export earnings for fisheries products are forecast to be around $1.25 billion in 2013-14, up 6 per cent from 2012-13.

In 2013-14 the value of forestry product exports is forecast to increase 6 per cent to around $2.2 billion, following a decline of 8.4 per cent in 2012-13.

The total value of Australian agricultural, fisheries and forestry exports is forecast to be around $40.6 billion in 2013-14, a decline of 1.3 per cent from $41.2 billion in 2012-13.

Understanding ABARES agricultural forecastsABARES presents its forecasts of production, consumption, prices and exports of specific agricultural commodities as point forecasts. These forecasts are based on an economic assessment of data and information from various sources, supported by discussions with industry experts, use of quantitative analytical tools and professional judgement. Because they depend on information available at the time they are made, ABARES forecasts may differ from actual outcomes.

Price forecasts and actual outcomes of selected agricultural commodities in 2012-13

Agricultural Commodities

Unit 2012-13

actual

September 2012 b - forecast

September 2012 b -

error c

December 2012 b - forecast

December 2012 b -

error c

March 2013 b - forecast

March 2013 b -

error c

Wheat US$/t 348 350 0% 360 3% 362 4%

Lamb Ac/kg 382 460 21% 395 3% 380 0%

Beef Ac/kg 296 315 6% 310 5% 305 3%

Cheese US$/t 4 150 4 150 0% 4 150 0% 4 150 0%

Cotton USc/lb 87 86 1% 81 7% 85 2%

Wool Ac/kg 1 035 960 7% 1 000 3% 1 050 1%

Butter US$/t 3 650 3 350 8% 3 370 8% 3 370 8%

Sugar USc/lb 18 18 0% 18 0% 18 0%a Wheat, cheese, butter, cotton and sugar are world indicator prices in US$. All other commodities are domestic prices in A$. b Release time of ABARES forecasts. c Expressed as percentage of actual outcome.

A key reason for differences occurring between forecasts and actual outcomes is that ABARES has to make assumptions about factors that can affect outcomes. As more information becomes available, ABARES updates earlier assumptions and revises forecasts. ABARES forecasts are therefore conditional on the information available at the time they are made.


Differences between forecasts and actual outcomes also reflect the effects of unforeseeable events. These can include policy changes, macroeconomic developments, climatic or seasonal conditions and demand and supply disruptions.

For example, the actual outcome of saleyard price for lambs in 2012-13 was affected by dry seasonal conditions in the main sheep producing regions, notably south-eastern parts of South Australia and western Victoria. In preparing the forecast of the 2012-13 lamb saleyard price in the September quarter 2012, ABARES assumed that seasonal conditions in the main sheep producing regions would be relatively favourable in 2012-13. Based on this assumption, ABARES forecast the saleyard price to average 460 cents a kilogram in 2012-13.

However, seasonal conditions were drier than expected in the first half of 2012-13, which led to a significant increase in lamb slaughter and availability. The increase in supply placed downward pressure on saleyard prices. Taking these developments into account, ABARES revised its forecast of average lamb saleyard price to 395 cents a kilogram in the December 2012 issue of Agricultural commodities, before making a further downward revision to 380 cents a kilogram in the March 2013 issue. The actual outcome for 2012-13 as a whole was 382 cents a kilogram.

When preparing forecasts of agricultural production in Australia, ABARES takes into account information on the seasonal outlook released by the Australian Government Bureau of Meteorology and yield forecasts provided by the Agricultural Production System Research Unit of the Queensland Department of Agriculture, Fisheries and Forestry. Variations in these seasonal and yield forecasts will affect the ABARES forecast of domestic agricultural production.

Forecasts and actual outcome of winter crop production, Australia, 2012-13

Exchange rate movements can significantly affect agricultural prices and export earnings. Because most agricultural prices are denominated in US dollars on world markets, a significant decline or increase in the value of the US dollar against other floating international currencies can influence movements in world agricultural prices (Penm et al. 2002). Movement in the Australian dollar against the US dollar is also an important factor. A significant appreciation or depreciation of the Australian dollar against the US dollar can markedly reduce or increase earnings for exporters and producers.


Considerable uncertainty surrounds any exchange rate outlook. This is because exchange rate movements can be significantly affected by changes in financial market sentiment, leading to strong volatility. For example, in April 2013 the Australian dollar averaged US104 cents but had fallen to US93 cents by the end of June 2013.

Events such as extreme seasonal conditions, supply disruptions and sharp exchange rate fluctuations, and their effects, cannot be predicted and incorporated into agricultural commodity forecasts before the event. While ABARES attempts to balance a range of upside and downside risks, some key judgements relating to forecasts will inevitably be different from actual outcomes.

Information about the potential risks posed by some factors to the point forecasts is useful for decision-makers in the agricultural sector. For this reason, ABARES discusses risk factors in the notes presented in Agricultural commodities. Decision-makers are encouraged to read the notes in full to gain a comprehensive understanding of the context of ABARES agricultural commodity forecasts.

Reference

Penm, J, Maurer, A, Fairhead, L & Tran, QT 2002, 'US dollar: impacts of a depreciation of the US$ on Australian commodities', Australian commodities, vol. 9, no. 3, pp. 485-94, ABARE, Canberra.

Major indicators of Australia's agriculture and natural resources based sectors

Indicator Currency 2008 -09

2009 -10

2010 -11

2011 -12 s

2012 -13 s

2013 -14 f

Chang from

previous year -

2012-13%

Chang from

previous year -

2013-14%

Exchange rate US$/A$ 0.75 0.88 0.99 1.03 1.02 0.92 -1.0 - 9.8

Unit returns aIndicator Currency 2008 -

092009 -

102010 -

112011 -

12 s2012 -

13 s2013 -

14 fChang

from previous

year - 2012-13

%

Chang from

previous year -

2013-14%

Farm index 100.0 88.2 97.7 98.2 95.6 98.8 - 2.6 3.3

Value of exports A$m 34 946 31 309 35 531 39 782 41 168 40 638 3.5 -1.3

Farm b A$m 31 075 27 793 31 809 36 327 37 952 37 228 4.5 -1.9

- crops A$m 16 361 14 890 17 313 21 592 23 012 21 156 6.6 - 8.1

- livestock A$m 14 714 12 903 14 496 14 735 14 940 16 072 1.4 7.6

Forest and fisheries products

A$m 3 871 3 516 3 722 3 456 3 217 3 410 - 6.9 6.0

- forestry A$m 2 343 2 270 2 474 2 229 2 042 2 164 - 8.4 6.0

- fisheries A$m 1 529 1 246 1 248 1 227 1 175 1 245 - 4.2 6.0

Gross value of production c


Indicator Currency 2008 -09

2009 -10

2010 -11

2011 -12 s

2012 -13 s

2013 -14 f

Chang from

previous year -

2012-13%

Chang from

previous year -

2013-14%

Farm A$m 41 929 39 667 46 981 48 067 47 343 49 009 -1.5 3.5

- crops A$m 22 769 21 138 25 943 26 848 27 621 27 665 2.9 0.2

- livestock A$m 19 160 18 529 21 038 21 219 19 722 21 344 - 7.1 8.2

Forestry and fisheries

A$m 3 973 3 968 4 092 3 963 3 897 4 049 -1.7 3.9

- forestry A$m 1 759 1 777 1 851 1 647 1 488 1 575 - 9.6 5.8

- fisheries A$m 2 214 2 191 2 241 2 316 2 409 2 474 4.0 2.7

Volume of farm production d

index 107.9 107.5 114.2 120.1 116.6 118.6 - 2.9 1.7

- crops index 113.2 114.4 126.2 138.2 127.5 130.9 - 7.7 2.7

- livestock index 100.6 98.7 100.6 101.0 104.5 105.2 3.5 0.7

Production area and livestock numbersIndicator Currency 2008 -

092009 -

102010 -

112011 -

12 s2012 -

13 s2013 -

14 fChang

from previous

year - 2012-13

%

Chang from previous

year - 2013-14

%

Crop area (grains and oilseeds)

'000 ha 24 095 23 787 23 946 24 295 23 876 23 792 -1.7 - 0.4

Sheep million 72.7 68.1 73.1 74.7 73.8 74.4 -1.2 0.8

Cattle million 27.9 26.6 28.5 28.4 28.0 27.8 -1.4 - 0.7

Farm costs A$m 36 631 34 460 36 515 37 441 36 952 37 789 -1.3 2.3

Net cash income e A$m 5 865 9 999 15 410 15 698 15 589 16 546 - 0.7 6.1

Net value of farm production g

A$m 5 298 5 207 10 466 10 626 10 390 11 220 - 2.2 8.0

Farmers' terms of trade

index 88.5 88.6 96.4 93.4 95.3 96.3 2.0 1.0

EmploymentIndicator Currency 2008 -

092009 -

102010 -

112011 -

12 s2012 -

13 s2013 -

14 fChang

from previous

year - 2012-13

%

Chang from previous

year - 2013-14

%

Agriculture, forestry and fishing

'000 363 369 350 335 321 na - 4.0 na

Australia '000 10 899 11 003 11 290 11 419 11 563 na 1.3 na

a Base: 2007-08 = 100. b Series revised back to 1988-89. c For a definition of the gross value of farm production see Table 13. d Chain weighted basis using Fishers' ideal index with a reference year of 1997-98 =


100. e Gross value of farm production less total cash costs. f ABARES forecast. g Gross value of farm production less total farm costs. na Not available. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics


Major Australian agricultural, fisheries and forestry commodity exports

Wheat, cotton, sugar, canola and rice are world indicator prices in US$. All other commodities are export unit returns or domestic prices in A$. For export value, annual forecasts are the sum of quarterly forecasts. As a result, annual export values do not necessarily reflect variations in export volumes, world prices and exchange rates.

f ABARES forecast, s ABARES estimate.


Agriculture - CropsWheatNeil Thompson

The world wheat indicator price (US no. 2 hard red winter, fob Gulf) is forecast to fall by 12 per cent in 2013-14 to average US$305 a tonne. While the world indicator price for wheat is forecast to decline, the extent of the decline is less than the expected falls in prices of other varieties of wheat on world markets. This reflects an expected smaller increase in world production in 2013-14 of higher protein wheat varieties, including US hard red winter wheat. By contrast, production of lower protein wheat varieties, including France class 1, US soft red winter wheat and Australian premium white wheat, is forecast to rise more substantially.

World wheat prices, monthly

World production to increase in 2013-14

World total wheat production is forecast to increase by 6 per cent in 2013-14 to around 695 million tonnes. Wheat production is forecast to increase in most of the major growing regions in the northern hemisphere, particularly, the Black Sea region (the Russian Federation, Ukraine and Kazakhstan) and the European region. The notable exception is the United States where production is forecast to fall.


World wheat production

f ABARES forecast.

Wheat production in the Black Sea region is forecast to reach almost 90 million tonnes in 2013-14, 41 per cent higher than in 2012-13. This forecast increase is largely driven by the Russian Federation, where wheat production is forecast to rise by 38 per cent to around 52 million tonnes. The Russian wheat harvest is well under way and reported yields are significantly higher than last season's drought affected crop. However, rainfall in parts of the north-east growing region has slowed the harvest and raised concerns about wheat quality.

In Ukraine, wheat production is forecast to increase by 33 per cent in 2013-14 to around 21 million tonnes. Like the Russian Federation, yields in Ukraine are higher than last year but rainfall during the harvest period has resulted in a downgrade of crop quality.

Wheat production in Kazakhstan is forecast to increase by 68 per cent in 2013-14 to around 17 million tonnes. Crop yields in Kazakhstan, which grows spring wheat that will be harvested later, are expected to benefit from recent rainfall without the adverse effects on quality.

Wheat production in the European Union is forecast to increase by 8 per cent in 2013-14 to around 141 million tonnes. Growing conditions throughout the season were generally favourable resulting in a forecast average yield of 5.5 tonnes to the hectare.

In Canada, wheat production is forecast to rise by 8 per cent to around 30 million tonnes, reflecting an estimated 7 per cent increase in planted area under the assumption of average yields.

Wheat production in the United States is forecast to decline by 7 per cent in 2013-14 to around 58 million tonnes, due mainly to the adverse effect of drought conditions. The drought had a significant effect in the major winter wheat producing states of Kansas, Oklahoma, Texas, Colorado and Nebraska, which resulted in an estimated 24 per cent of the planted area being abandoned, the highest abandonment rate since 2002-03.


United States winter wheat, estimated abandonment rate, selected states

s USDA estimate.Source: National Agricultural Statistics Service, USDA

Despite the high abandonment rate, estimated yields of the winter wheat crops harvested are only slightly down from last year. Additionally, the quality and protein levels of hard wheat varieties—important for use in bread and noodle production—are generally better than last year.

By the start of the planting window for spring wheat in the major growing states of North Dakota, Montana and Minnesota, the drought had eased but conditions remained dry. In response to the prevailing conditions, producers reduced the area planted to spring wheat. With seasonal conditions improving over the growing season, spring wheat yields are expected to increase, partially offsetting the effect on production of a smaller planted area.

In Argentina, wheat production is forecast to rise by 34 per cent in 2013-14 to around 11 million tonnes. This forecast increase reflects expected higher yields, following a rain affected harvest last season and a significant increase in the area planted to wheat this season.

For other major producers, wheat production in China is forecast to remain relatively unchanged in 2013-14 at around 121 million tonnes. Production in India is forecast to fall by 3 per cent to around 93 million tonnes, down from the record of around 95 million tonnes last season. Wheat quality has been a major concern, particularly in China. Around 15 per cent of China's wheat production (up to 20 million tonnes) is expected to be downgraded to feed use because of frost damage during winter and excessive rainfall during harvest.

Wheat consumption higher

World consumption of wheat is forecast to increase by 3 per cent in 2013-14 to 694 million tonnes. An expected increase in the availability of low quality wheat is forecast to result in a 6 per cent increase in the use of wheat for livestock feed, particularly in China where there is a large and growing livestock sector.


Trade to rise on higher Russian Federation exports

World trade in wheat is forecast to increase by 5 per cent in 2013-14 to 147 million tonnes. This forecast increase largely reflects an increase in supplies available for export in most major exporting countries and higher import demand, particularly in China, Turkey, Brazil and Syria.

The forecast increase in wheat production in the Black Sea region is expected to be the main support for higher world trade in 2013-14. Exports from the Russian Federation are forecast to rise by 47 per cent to around 17 million tonnes, while shipments from Kazakhstan are forecast to increase by 45 per cent to around 9 million tonnes. In Ukraine, wheat exports are also forecast to rise, reaching 8 million tonnes in 2013-14.

In most other major exporters (except Australia), shipments are also forecast to rise. Despite a forecast decline in production, exports from the United States are forecast to increase by 9 per cent to around 30 million tonnes, supported by an expected drawdown in stocks. Wheat exports are forecast to rise by 2 per cent in the European Union and 5 per cent in Canada, reaching around 24 million tonnes and 20 million tonnes, respectively, in 2013-14. In Argentina, wheat exports are forecast to increase by 63 per cent in 2013-14 to around 7 million tonnes, reflecting the forecast increase in production.

In India, production in 2013-14 is forecast to again exceed 90 million tonnes and exports are expected to remain largely unchanged at around 7 million tonnes.

World stocks to increase marginally

World wheat closing stocks are forecast to rise by less than 1 per cent in 2013-14 to 175 million tonnes. Closing stocks are forecast to increase in most countries that are major wheat producers, except the United States and India. The Indian Government is expected to keep trying to reduce its stock holdings by increasing purchasing subsidies for poor consumers and releasing reserves to exporters. At 1 July 2013 India's wheat stocks totalled 42.4 million tonnes, more than 20 million tonnes above the government's target.

World wheat closing stocks

f ABARES forecast.


Australia

Wheat production to rise

Australian wheat production is forecast to increase by 11 per cent in 2013-14 to around 24.5 million tonnes. This reflects an estimated 4 per cent rise in planted area and a forecast increase in average yield.

Rainfall during winter varied in major growing regions, with below average rainfall in parts of New South Wales, Queensland and northern growing areas of Western Australia. By contrast, winter temperatures and rainfall were generally favourable in South Australia, Victoria and southern growing areas of Western Australia, where crops are in generally good condition.

The Bureau of Meteorology's seasonal outlook, issued on 28 August 2013, suggests an above average chance of exceeding median rainfall in most cropping regions in eastern Australia and an average chance of exceeding median rainfall in Western Australia.

While the rainfall outlook is positive, timeliness of falls during spring will be critical to achieving the forecast increase in wheat production. With soil moisture presently at low levels, yields could be lower than expected if crops do not receive timely spring rainfall.

Export earnings to decline

Australian wheat exports are forecast to fall by 10 per cent in 2013-14 to around 19.2 million tonnes. Although wheat production is forecast to increase, the supply of wheat available for export is expected to decline, reflecting significant reductions in production and stocks in 2012-13. The average export price for Australian wheat is forecast to decline modestly in 2013-14 as an assumed depreciation of the Australian dollar largely offsets the effect of expected falls in world wheat prices. The value of wheat exports is forecast to decline by 4 per cent in 2013-14 to $6.5 billion. This compares with the average of $4.8 billion in the 10 years to 2012-13 in real terms.

Australian wheat exports

f ABARES forecast.


Wheat outlook

WorldCategory Unit 2011-12 2012-13 s 2013-14 f % change

Production Mt 695 653 695 6.4

- China Mt 117 121 121 0.3

- European Union 27 Mt 137 130 141 8.2

- India Mt 87 95 93 - 2.5

- Russian Federation Mt 56 38 52 37.9

- United States Mt 54 62 58 - 6.8

Consumption Mt 696 673 694 3.1

- human Mt 459 464 471 1.6

- feed Mt 151 130 137 5.5

Closing stocks Mt 194 174 175 0.6

Stocks-to-use ratio % 28 26 25 - 2.5

Trade Mt 145 140 147 5.3

Exports aCategory Unit 2011-12 2012-13 s 2013-14 f % change

- Argentina Mt 13 4 7 62.5

- Australia b Mt 23 21 19 - 9.8

- Canada Mt 18 19 20 4.8

- European Union 27 Mt 17 24 24 1.5

- Kazakhstan Mt 11 6 9 45.2

- Russian Federation Mt 22 11 17 47.3

- Ukraine Mt 5 7 8 11.1

- United States Mt 29 27 30 9.2

Price c US$/t 299 348 305 -12.4

AustraliaCategory Unit 2011-12 2012-13 s 2013-14 f % change

Area '000 ha 13 902 13 243 13 712 3.5

Production kt 29 905 22 079 24 467 10.8

Exports b kt 23 026 21 270 19 179 - 9.8

- value A$m 6 378 6 776 6 533 - 3.6

APW 10 net pool return A$/t 263 326 324 - 0.7

a Local marketing years. b July-June years. c US no. 2 hard red winter wheat fob Gulf, July-June. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics


Coarse grainsDavid Mobsby

The world coarse grains indicator price (US corn, fob Gulf) is forecast to fall by 25 per cent in 2013-14 to US$235 a tonne. This mostly reflects a forecast large increase in US corn production, leading to a recovery in world coarse grains supplies. The world barley indicator price (French Rouen feed) is forecast to fall by 21 per cent (to US$235 a tonne) due to a forecast increase in world barley production.

World coarse grains prices

f ABARES forecast.

World coarse grains prices have declined in recent months. The world coarse grains indicator price (US corn, fob Gulf) fell 13 per cent from US$282 a tonne in July to US$247 a tonne in August 2013. This largely reflected expectations of a record US corn crop with harvest beginning in September 2013. The world barley indicator price fell 12 per cent from US$268 a tonne in May to US$237 a tonne in July 2013, with prospects of a large northern hemisphere barley crop in sight.


World coarse grains prices, monthly

Record production forecast for major producers

World coarse grains production is forecast to increase by 10 per cent in 2013-14 to a record 1.25 billion tonnes. This is mainly due to a forecast increase in corn production in the United States (to a record high).

Corn

World corn production is forecast to increase by 11 per cent in 2013-14 to a record 957 million tonnes, largely due to forecast higher production in the United States.

Corn production in the United States is forecast to rise by 28 per cent in 2013-14 to a record 350 million tonnes. A forecast 26 per cent increase in yields from the drought-affected season of 2012-13 is expected to drive the forecast increase in production. While dry conditions have persisted in a few regions, generally favourable seasonal conditions prevailed across major growing regions in recent months. In early September 54 per cent of the US corn crop was rated as being in good to excellent condition, compared with 22 per cent at the same time in 2012-13.


US corn condition, percentage rated good to excellent

Note: Week numbers refer to the number of weeks from the beginning of the calendar year.

In China, corn production is forecast to increase by 3 per cent in 2013-14 to a record 211 million tonnes. The total harvested area of corn is forecast to rise by 2 per cent to 35.6 million hectares, while yields are expected to rise by 1 per cent to around 5.9 tonnes per hectare.

In Ukraine, corn production is forecast to rise by 24 per cent in 2013-14 to a record 26 million tonnes, primarily reflecting a forecast 19 per cent increase in the average yield to 5.5 tonnes per hectare. Additionally, the area planted to corn is expected to rise by 6 per cent.

Harvesting of the 2012-13 corn crops is now largely complete in Latin America. Argentina and Brazil are estimated to have produced record corn crops of around 32 million tonnes and 80 million tonnes, respectively.

Corn production, Brazil


f ABARES forecast.

In 2013-14 corn production is forecast to fall in Argentina by 16 per cent (to 27 million tonnes) and in Brazil by 10 per cent (to 72 million tonnes). The forecast fall in production largely reflects an expected fall in the area planted to corn in Latin America in response to the forecast fall in world corn prices.

Barley

World barley production is forecast to increase by 10 per cent in 2013-14 to 143 million tonnes, driven by estimated production increases in the European Union and the Russian Federation. If realised, this would be the highest level of production since 2009-10. Production increases are expected for all major exporting countries except Argentina.

Barley production in the European Union is estimated to have increased by 9 per cent in 2013-14 to 59 million tonnes, driven by a large production increase in Spain. Across the European Union, favourable seasonal conditions have resulted in yields estimated to be above their five-year average to 2012-13.

In Canada, barley production is forecast to increase by 10 per cent in 2013-14 to 8.8 million tonnes. Generally favourable growing conditions are expected to result in a 16 per cent rise in barley yields, which will more than offset an estimated 5 per cent fall in harvested area. In late August 2013, 88 per cent of the barley crop was rated good to excellent in Canada's major barley producing province of Alberta.

Harvesting of winter barley in the Black Sea region began in June 2013, two to three weeks earlier than usual due to warmer conditions. Barley production in the Russian Federation is estimated to have increased by 22 per cent to 17 million tonnes, reflecting an increase in harvested area and an estimated rise in yield compared with that achieved in 2012-13. In Ukraine, barley production is forecast to rise by 11 per cent to 7.7 million tonnes, largely due to a forecast increase in yield.

In Argentina, barley production is forecast to fall by 6 per cent in 2013-14 to around 5 million tonnes. Producers are expected to switch from barley to wheat because the Argentine Government introduced rebates on wheat export taxes, making wheat a more attractive crop to produce. The area planted to barley is therefore forecast to fall by 23 per cent to 1.4 million hectares.


Barley production major exporters

f ABARES forecast.

Lower prices boost coarse grains consumption

World coarse grains consumption is forecast to rise by 6 per cent in 2013-14 to 1.22 billion tonnes, driven by an expected increase in the feed use of coarse grains. Total corn consumption is forecast to rise by 7 per cent to a record 931 million tonnes, while total barley consumption is forecast to rise by 6 per cent to 140 million tonnes.

Total feed use of coarse grains is forecast to rise by 8 per cent in 2013-14 to 718 million tonnes, which reflects the combined effects of forecast lower coarse grains prices and an expected expansion of livestock industries. The feed use of barley and corn is expected to increase.

Feed use of barley is forecast to grow by 6 per cent in 2013-14 to 95 million tonnes in response to lower feed barley prices. Feed barley consumption is forecast to rise by 2 per cent (to 38 million tonnes) in the European Union and by 17 per cent (to 9 million tonnes) in the Russian Federation. Feed barley consumption in the Middle East and North Africa is forecast to grow by 7 per cent in 2013-14 to around 26 million tonnes.

Total feed use of corn is forecast to rise by 8 per cent in 2013-14 to around 560 million tonnes. In the United States, feed use of corn is forecast to rise sharply by 15 per cent to 130 million tonnes in response to expected lower feed grain prices and an increase in poultry and swine production. Similarly, feed use of corn in Brazil is forecast to rise by 4 per cent in 2013-14 to 47 million tonnes. In China, an expected expansion of livestock production is forecast to lead to a 6 per cent increase (to a record 152 million tonnes) in feed use of corn. However, with high domestic supplies of feed wheat reducing the reliance on corn for livestock feed this is a slower rate of growth than the previous year.

Total food, seed and industrial use of coarse grains is forecast to rise by 4 per cent in 2013-14 to 498 million tonnes, largely due to rising US consumption. In the United States, production of ethanol from corn is forecast to increase in 2013-14, with producers expected to respond to improved producer margins. The improved margins are expected to result from the forecast fall in corn prices and strong energy prices. Additionally, US demand for ethanol is forecast to remain strong in 2013-14 as the volume of renewable


fuels required to be blended into conventional fuels increase to 63 billion litres in 2013 and 69 billion litres in 2014. Of this, 52 billion litres in 2013 and 55 billion litres in 2014 are expected to be sourced from corn-based ethanol.

World coarse grains consumption

f ABARES forecast.

US corn exports to drive world trade

World coarse grains trade is forecast to increase by 24 per cent in 2013-14 to 147 million tonnes, driven by an expected significant increase in world corn trade.

While world corn trade is expected to increase, world barley trade is forecast to fall by 2 per cent in 2013-14 to 19 million tonnes. Low opening stocks in several major exporting countries are expected to lead to reduced exports, despite an expected increase in world production. Barley exports from the European Union, Canada and Argentina are all expected to fall. By contrast, barley exports from the Russian Federation and Ukraine are forecast to rise.

Saudi Arabia is expected to remain the largest export destination for barley in 2013-14. However, imports are forecast to fall by 4 per cent in 2013-14 to 7.5 million tonnes, due to high carry-over stocks. Imports of barley by other Middle Eastern and North African nations are forecast to remain strong in 2013-14, but lower than the previous year due to higher domestic production. Conversely, China is forecast to increase barley imports by 14 per cent to 2.5 million tonnes.

World corn trade is forecast to rise by 26 per cent in 2013-14 to 113 million tonnes, driven by an expected 12 million tonne increase in US exports to 31 million tonnes. If this forecast is realised, the United States will regain its position as the world's leading corn exporter.

Corn exports from Latin America are forecast to fall in 2013-14, reflecting an expected decline in domestic production. Corn exports from Argentina and Brazil are forecast to fall by 5 per cent and 14 per cent, respectively, to 18 million tonnes and 19 million tonnes. By contrast, record corn production in Ukraine is expected to lead to a 22 per cent increase in exports to a record 16.5 million tonnes.


Japan is forecast to increase corn imports by 7 per cent in 2013-14 to 15.5 million tonnes, reversing a six-year declining trend. China is forecast to import 7 million tonnes of corn, up from 3 million tonnes in 2012-13. Corn imports in South-East Asia, the Middle East, North Africa and Latin America (excluding Argentina and Brazil) are forecast to increase in 2013-14 and collectively account for around 40 per cent of world trade.

Corn trade, the four major corn exporters

f ABARES forecast.

Coarse grains stocks to rise on US supply

World coarse grains stocks are forecast to rise by 20 per cent in 2013-14 to 182 million tonnes, the highest level since 2009-10. Corn stocks are forecast to increase by 21 per cent to around 150 million tonnes, largely due to a sharp rise in US corn stocks, which are forecast to more than double to 46 million tonnes. World barley stocks are forecast to rise by 15 per cent to 23 million tonnes, increasing from the 30-year low of around 20 million tonnes in 2012-13.


World coarse grains closing stocks

f ABARES forecast.

Australia

Higher Australian production in 2013-14

Australian coarse grains production is forecast to rise by 12 per cent in 2013-14 to 11.7 million tonnes. Production increases are forecast for barley, grain sorghum and oats, while maize and triticale production is forecast to fall.

Barley production is forecast to rise by 13 per cent in 2013-14 to 7.7 million tonnes, slightly below the five-year average to 2011-12. Favourable seasonal conditions in South Australia and Victoria have led to a forecast significant increase in barley production in those states. In Western Australia, barley production in 2013-14 is forecast to increase by 8 per cent from the drought-affected production of last year. By contrast, barley production is forecast to fall in New South Wales and Queensland with yields expected to decline as a result of less than favourable seasonal conditions.

Summer cropping regions are presently dry. Sufficient and timely rainfall is needed before and during the planting window for summer crops. If this occurs, the area planted to grain sorghum is forecast to rise by 12 per cent in 2013-14 to around 634 000 hectares. This forecast rise is driven by relatively high domestic grains prices and the availability of fallow land in New South Wales. Production of grain sorghum is forecast to increase by 17 per cent to around 2 million tonnes, assuming average yields.


Australian barley production

f ABARES forecast.

Export earnings to fall in 2013-14

Australian coarse grains exports are forecast to fall by 7 per cent in 2013-14 (July to June) to 6.2 million tonnes, reflecting a forecast 41 per cent fall in grain sorghum exports to 766 000 tonnes. The forecast fall in grain sorghum exports reflects below average production in 2012-13, which has reduced supplies available for export in 2013-14. Barley exports are forecast to remain largely unchanged at 5.2 million tonnes in 2013-14.

Australian coarse grains exports

f ABARES forecast.

The total value of coarse grain exports is forecast to fall by 13 per cent in 2013-14 to $1.8 billion, reflecting forecast falls in coarse grains export shipments and world coarse grains prices. However, an assumed depreciation of the Australian dollar is expected to partially


offset the adverse impact of these reductions on export earnings. The values of barley and grain sorghum exports in 2013-14 are forecast to fall by 7 per cent to $1.5 billion and by 41 per cent to $216 million, respectively.

Coarse grains outlook

WorldCategory unit 2011-12 2012-13 s 2013-14 f % change

Production Mt 1 155 1 134 1 247 10.0

- barley Mt 134 130 143 10.0

- corn Mt 883 863 957 10.9

Consumption Mt 1 155 1 146 1 216 6.1

Trade Mt 149 119 147 23.5


Stocks-to-use ratio % 14 13 15 15.4

Corn price (fob Gulf, Jul-Jun) US$/t 281 312 235 - 24.7

Barley price (fob Rouen, Jul-Jun) US$/t 270 296 235 - 20.6

AustraliaCategory unit 2011-12 2012-13 s 2013-14 f % change

Area '000 ha 5 323 5 252 5 469 4.1

- barley '000 ha 3 718 3 680 3 747 1.8

- grain sorghum '000 ha 659 565 634 12.2

Production kt 12 457 10 455 11 725 12.1

- barley kt 8 221 6 761 7 673 13.5

- grain sorghum kt 2 239 1 721 2 020 17.4

Exports a kt 7 911 6 649 6 180 - 7.1

- value A$m 2 245 2 060 1 800 -12.6

Feed barley price b A$/t 197 244 202 -17.2

Malting barley price c A$/t 201 255 222 -12.9

a July-June years. b Feed 1, delivered Geelong. c Gairdner Malt 1, delivered Geelong. f ABARES forecast. s ABARE estimate.Sources: ABARES; Australian Bureau of Statistics; United States Department of Agriculture


OilseedsBeth Deards

Oilseeds prices to fall in 2013-14

The world oilseeds indicator price (US soybeans, fob Gulf) is forecast to decline by 15 per cent in 2013-14 to US$510 a tonne. The primary drivers of this expected decline are forecast higher production and rising stocks in the major soybean producing countries. However, in Latin America favourable seasonal conditions during the planting window (which begins in October) and growing season are critical to realising the forecast of record soybean production. If Latin America experiences unfavourable seasonal conditions that result in lower than expected production, this would likely cause the world oilseeds indicator price to average higher than currently forecast.

The world canola indicator price (Europe rapeseed, fob Hamburg) is forecast to fall by 17 per cent in 2013-14 to US$520 a tonne. Between mid June and late July 2013 the world canola indicator price fell from more than US$620 a tonne to around US$460 a tonne. This decline was largely driven by higher than expected production of canola and sunflower seed in the northern hemisphere, particularly in the European Union and the Black Sea region. In August 2013 the world canola indicator price averaged US$478 a tonne. Canola prices are expected to average higher in the second half of 2013-14, which reflects the expected effects of stronger demand and only a small increase in world supplies.

World canola supply and price

f ABARES forecast.

Record production of soybeans and canola in 2013-14

World oilseeds production is forecast to rise by 4 per cent in 2013-14 to a record 487 million tonnes. World production of soybeans and canola are forecast to be record highs, while sunflower seed production is forecast to be the second largest on record.


Canola

World canola production is forecast to increase by 5 per cent in 2013-14 to reach a record 64 million tonnes. While the European Union is forecast to remain the world's largest producer of canola, Canada is expected to overtake China as the second largest producer.

Rapeseed (canola) production in the European Union is forecast to rise by 5 per cent in 2013-14 to 20.3 million tonnes, largely the result of more favourable seasonal conditions than last year. If realised, this will be the third largest volume produced on record and only 6 per cent below the record of 21.6 million tonnes in 2009-10. According to the European Commission, rapeseed yields are likely to be above average in Germany, Poland, Hungary, Romania and Bulgaria, but below average in the United Kingdom.

In Canada, canola production is forecast to increase by 11 per cent in 2013-14 to 14.9 million tonnes. Conditions have been largely favourable this season and the average yield is forecast to increase significantly following adverse conditions last year.

Rapeseed (canola) production in China is forecast to increase marginally in 2013-14 to 14.1 million tonnes, which reflects an expected rise in the area planted to rapeseed. Chinese producers increased the area planted to rapeseed marginally in response to a 2 per cent rise in the government purchase price.

In Ukraine, rapeseed production is forecast to rise by 76 per cent in 2013-14 to around 2.2 million tonnes. This is largely due to a 75 per cent increase in the rapeseed area harvested following a high level of winterkill last year.

Soybeans

World production of soybeans is forecast to rise by 5 per cent in 2013-14 to a record 279 million tonnes. This forecast is underpinned by an expected increase in production in the United States and the prospect of record production in Latin America.

In the United States, soybean production is forecast to rise by around 4 per cent in 2013-14 to 85.7 million tonnes. This reflects a forecast recovery in the average yield by around 3 per cent following an improvement in seasonal conditions from last year. As of early September, 52 per cent of the soybean crop was rated as good to excellent, compared with 32 per cent at the same time last year. A possible downside risk to this forecast is the potential for frost damage toward the end of the season which is more likely than usual given the planting delays and late harvest for this season.

Soybean production in Brazil and Argentina is forecast to rise by 5 per cent and 10 per cent in 2013-14, respectively, to 85 million tonnes and 53.5 million tonnes, assuming favourable seasonal conditions. If realised, this forecast production would be a record. The expected production increases reflect a rise in the area planted to soybeans in both countries, largely driven by favourable returns to soybeans compared with corn. Higher yields are also expected, particularly in Argentina.

Soybean production in India is forecast to rise by around 14 per cent in 2013-14 to a record 12.5 million tonnes. Favourable monsoon rains during this season's planting window increased soil moisture and producers responded by increasing the area planted to soybeans by 10 per cent to a record 12.1 million hectares.


In contrast to other major producers, soybean production in China is forecast to fall by 4 per cent in 2013-14 to around 12 million tonnes. This reflects a continued decline in the area planted to soybeans as producers switch to more profitable crops such as corn.

Soybean production changes, major producers, 2013-14

Sunflower seed

World sunflower seed production is forecast to rise by 10 per cent in 2013-14 to almost 40 million tonnes. If realised, this forecast production would be the second largest on record and only 2 per cent below the historical high of almost 41 million tonnes in 2011-12.

After a less than favourable growing season in 2012-13, sunflower seed production in the Russian Federation and Ukraine is forecast to increase by 10 per cent and 12 per cent, respectively, to 8.8 million tonnes and 9.4 million tonnes in 2013-14.

Sunflower seed production in the European Union is forecast to increase by 23 per cent in 2013-14 to 8.3 million tonnes, the second largest crop on record. While the area planted to sunflower seed increased marginally this season, warmer temperatures and sufficient moisture aided crop development and are expected to result in improved yields to around average.

Sunflower seed production in Argentina is forecast to increase by 6 per cent in 2013-14 to almost 3.5 million tonnes, reflecting a forecast rise in planted area from last year when planting intentions were not fulfilled because of floods.

China and Argentina to increase soybean crush

World oilseeds crush is forecast to increase by 3 per cent in 2013-14 to 408 million tonnes.

Soybean crush is forecast to rise by 4 per cent in 2013-14 to 239 million tonnes, primarily driven by a higher crush in Argentina and China. In Argentina, soybean crush is forecast to increase this season as a result of an expected recovery in domestic and export demand for biodiesel and soybean oil.


Despite a 5 per cent rise in canola production, canola crush is forecast to increase by only 1 per cent in 2013-14 to 61 million tonnes. The forecast rise in crush is expected to be limited by reduced carryover stocks from the previous season, which is expected to constrain the increase in canola supplies. Additionally, demand for rapeseed oil from the European Union is expected to be subdued. In 2013-14 rapeseed (canola) crush in the European Union is forecast to remain largely unchanged from the previous season at around 21.6 million tonnes.

Sunflower seed crush is forecast to increase by 7 per cent in 2013-14 to 35.5 million tonnes, reflecting higher crush in the Black Sea region and the European Union. In Ukraine, most sunflower seed production is crushed domestically largely due to an export duty for sunflower seed. The higher production of sunflower seed in Ukraine is expected to result in a 10 per cent rise in crush to around 9 million tonnes. This will significantly increase supplies of sunflower seed meal and sunflower seed oil available for export.

Production, crush and exports of sunflower seed, Ukraine

f ABARES forecast.

Consumption to reach record highs in 2013-14

World oilseeds consumption is forecast to increase by 3 per cent in 2013-14 to a record 477 million tonnes, largely driven by rising demand for vegetable oils and protein meals.

World consumption of vegetable oils is forecast to increase by 5 per cent in 2013-14 to 164 million tonnes. This largely reflects increasing food consumption of vegetable oils, particularly by developing countries. Industrial use of vegetable oils is also forecast to rise, with the rise in industrial use of palm oil and soybean oil expected to be the greatest. In October 2012 the European Commission proposed a revision of the renewable fuel target of 10 per cent of transportation fuel by 2020 so food-based biofuels would account for a maximum of 5 per cent. The European Parliament will vote on the proposal later in 2013.

World consumption of protein meals is forecast to increase by 2 per cent in 2013-14 to 271 million tonnes. Most major consumers of protein meals are expected to increase consumption this season, as forecast higher world supplies and lower prices increase the economic competiveness of protein meal as an animal feed.


Food consumption of oilseeds is forecast to rise by 2 per cent in 2013-14 to around 37 million tonnes, reflecting higher food consumption of peanuts and soybeans. Although a relatively small component of total oilseeds consumption, food consumption of oilseeds grew steadily over the past decade from around 29 million tonnes in 2002-03 to 36.6 million tonnes in 2012-13. China is the largest consumer of oilseeds for food; consumption is forecast to reach almost 17 million tonnes in 2013-14.

Food consumption of oilseeds, China

f ABARES forecast.

Trade to rise on strong demand

World trade in oilseeds is forecast to rise by 6 per cent in 2013-14 to 119 million tonnes. Exports of soybeans, canola and sunflower seed are forecast to increase as a result of higher production, strong demand in importing countries and declining international prices.

Soybean exports are forecast to increase by 7 per cent in 2013-14 to 102 million tonnes, mostly due to a forecast rise in imports by China. Chinese imports of soybeans are expected to reach a record of almost 70 million tonnes, driven by the combined effects of higher demand from the crushing industry, an expected decline in domestic production and lower carryover stocks.

Canola exports are forecast to increase by 10 per cent in 2013-14 to 12.4 million tonnes, largely as a result of forecast higher shipments from Canada and Ukraine. In contrast, exports from Australia are expected to fall by around 27 per cent.

Exports of sunflower seed are forecast to rise by 20 per cent in 2013-14 to 1.7 million tonnes following a significant decline in the previous season. However, this forecast level of exports remains well below the 2 million tonnes exported in 2011-12 mostly as a result of larger domestic crops grown by major importers, particularly Turkey. Most of the increase in exports is expected to be supplied by the European Union and the Russian Federation. However, exports from the Russian Federation are expected to be limited by strong demand from domestic crushers.


Stocks to rise in major producing countries

World closing stocks of oilseeds are forecast to rise by 16 per cent in 2013-14 to around 81 million tonnes. A forecast increase in soybean stocks to around 70 million tonnes is the primary driver of this rise. Compared with the previous season, soybean stocks are forecast to be particularly high in Latin America, which reflects the prospect of record production. China is also expected to build soybean stocks in 2013-14 after a steep decline in the previous season.

Canola stocks are forecast to rise but remain relatively low compared with previous years at around 3.5 million tonnes.

The forecast for higher stocks of sunflower seed in the European Union and the Black Sea region are expected to lead to a 36 per cent rise in world sunflower seed stocks to 2 million tonnes.

Australia

Australian canola production is forecast to decline by 18 per cent in 2013-14 to around 3.3 million tonnes. Production in New South Wales is forecast to fall by 39 per cent to 900 000 tonnes and in Victoria by 33 per cent to 521 000 tonnes. In both states, forecast falls in production are largely due to estimated falls in the area planted to canola in response to dry conditions during the planting window. By contrast, canola production is forecast to rise by 4 per cent in Western Australia to around 1.46 million tonnes and by 6 per cent in South Australia to a record 429 000 tonnes.

In Western Australia, the area planted to canola is estimated to have risen by 3 per cent and the average yield is expected to remain largely unchanged from the previous season. In South Australia, the area planted to canola is estimated to have fallen but the average yield is expected to rise significantly due to favourable seasonal conditions.

The forecast fall in domestic production of canola is expected to result in exports falling by 27 per cent in 2013-14 to around 2.6 million tonnes. The value of canola exports is forecast to fall by 33 per cent to around $1.4 million, reflecting the expected fall in the volume of canola exports and a forecast fall in canola export prices.

In 2012-13 soybean production in Australia was around 92 000 tonnes, around 7 per cent higher than the previous year. Most soybean production in Australia is consumed domestically. In 2013-14 Australian soybean production is forecast to fall to around 70 000 tonnes.

Australian demand for soybean meal is greater than domestic supply; imports increased from 374 000 tonnes in 2002-03 to a record 637 000 tonnes in 2012-13. Soybean meal is primarily imported for use as livestock feed and is mostly sourced from Argentina and the United States. Imports of soybean meal are expected to increase further in 2013-14, given the forecast decline in domestic soybean production.


Soybean meal imports, Australia

Oilseeds outlook

WorldCategory unit 2011-12 2012-13 s 2013-14 f %

change

Production Mt 445 469 487 3.8

Consumption Mt 464 464 477 2.8

- oilseed meal Mt 258 265 271 2.3

- vegetable oil Mt 152 157 164 4.5

Exports Mt 111 112 119 6.3



Soybeans indicator price a US$/t 506 597 510 -14.6

Canola indicator price b US$/t 621 628 520 -17.2

AustraliaCategory unit 2011-12 2012-13 s 2013-14 f %

change

Total production kt 5 289 5 634 4 862 -13.7

- winter kt 3 440 4 069 3 325 -18.3

- summer kt 1 849 1 565 1 537 - 1.8

Canola Production kt 3 427 4 056 3 310 -18.4

Canola Exports c kt 2 323 3 488 2 562 - 26.5

- value $m 1 344 2 094 1 412 - 32.6

Price c (delivered Melbourne) A$/t 521 560 525 - 6.3


a Soybeans, US fob Gulf, July-June. b Rapeseed, Europe, fob Hamburg, July-June. c July-June years. f ABARES forecast.Sources: ABARES; Australian Bureau of Statistics; ISTA Mielke GmbH, Oil World, Hamburg; United States Department of Agriculture


SugarBenjamin K Agbenyegah

Lower sugar prices in 2013-14

The world indicator price for raw sugar (Intercontinental Exchange, nearby futures, no. 11 contract) is forecast to average US16 cents a pound in 2013-14 (October to September), down from around US18 cents a pound in 2012-13. The forecast lower average price for 2013-14 reflects the expectation that world sugar production will exceed consumption for the fourth consecutive year, lifting world sugar stocks-to-use ratio to a level last reached in 2007-08. The forecast price, if realised, will still be above the average of US14.5 cents a pound (in 2013-14 dollars) over the 10 years to 2011-12.

Indicator price, Intercontinental Exchange (daily, ended 11 September 2013)


World sugar indicators

f ABARES forecast.

World sugar production lower in 2013-14

World sugar production is forecast to be 181.1 million tonnes in 2013-14, 1.8 million tonnes less than the record harvest of 2012-13. Forecast higher sugar production in Brazil and Thailand is expected to be more than offset by lower sugar production in Europe, Mexico and the United States.

Change in world sugar production

f ABARES forecast.

In Brazil, sugar production is forecast to increase to a record 41.5 million tonnes in 2013-14 (October to September), 2.1 per cent more than the harvest of 2012-13. The forecast increase reflects a further rise in the sugar cane area harvested in response to favourable


world sugar and ethanol prices and a return to more normal seasonal conditions after excessive rainfall in 2012-13. Sugar cane production in Brazil is forecast to reach a record 652 million tonnes in 2013-14, 11 per cent higher than in 2012-13.

Sugar cane production and allocation, Brazil

f ABARES forecast.

The proportion of sugar cane used to produce ethanol in Brazil is forecast to be 55 per cent in 2013-14, compared with 50 per cent in 2012-13. The forecast higher cane allocation to ethanol production reflects, in part, the effect of an increase in Brazil's mandatory blending ratio of anhydrous ethanol with gasoline by 5 percentage points to 25 per cent, effective from 1 May 2013. Another factor supporting this forecast is an expected decline in the price ratio of sugar to ethanol. In recent months this ratio in Brazil has declined to levels last seen in late 2008.

Brazil domestic prices, monthly


Sugar production in China is forecast to be largely unchanged at 14.2 million tonnes in 2013-14. This reflects a 5 per cent increase in average sugar yields, largely offsetting the adverse effect of an estimated 3.5 per cent fall in cane area harvested. Chinese farmers responded to lower world sugar prices by moving away from sugar cane cultivation to alternative crops.

Sugar production in Thailand is forecast to increase by 7 per cent in 2013-14 to 10.7 million tonnes. While cane area harvested is estimated to remain largely unchanged at 1.4 million hectares, sugar yields are assumed to increase by 3 per cent in 2013-14.

In India, sugar production is forecast to be 25 million tonnes in 2013-14, down from 26.5 million tonnes in 2012-13. The forecast decline is based on an estimated 3 per cent reduction in cane area harvested, which is partially offset by forecast higher average sugar yields. Cane and sugar yield potentials have been boosted by a favourable 2013 monsoon season, which has so far delivered rainfall around 14 per cent above the long period average.

Sugar production in the United States is forecast to decline by 3 per cent in 2013-14 to 7.7 million tonnes, mainly due to forecast lower yields and reductions in both sugar cane area harvested and beet plantings. Lower sugar beet plantings were due mainly to unusually wet and cold seasonal conditions at the time of planting.

Mexican sugar production is forecast to be 6.4 million tonnes in 2013-14, compared with a record 7.4 million tonnes in 2012-13. The forecast decline reflects a reduction in sugar cane area harvested in response to lower returns to cane growers and expected lower yields due to dry weather.

In the European Union, sugar production is forecast to be 17.2 million tonnes in 2013-14, compared with 17.6 million tonnes in 2012-13. The forecast largely reflects a 3 per cent decline in estimated sugar beet plantings.

In Eastern Europe, sugar beet production is forecast to decline by 16 per cent to 7.6 million tonnes in response to lower sugar prices and a return to more normal seasonal conditions after two years of bumper yields. Sugar production in the Russian Federation is forecast to decline by 16 per cent to 4.4 million tonnes, while sugar production in the Ukraine is forecast to be 1.9 million tonnes, 22 per cent lower than in 2012-13.

World sugar consumption higher in 2013-14

World sugar consumption is forecast to increase by 2.1 per cent in 2013-14 to 176.3 million tonnes. This reflects the combined effects of lower sugar prices and assumed growth in world population and incomes, particularly in China, India and Brazil. The forecast consumption growth, if realised, will be slightly below the average of 2.2 per cent a year over the decade to 2011-12. Growth in world sugar consumption is facing competition from increasing use of high intensity sweeteners (both artificial and natural).

Alternative sweeteners to sugar

Alternative sweeteners are mainly high fructose corn syrup, a derivative of corn, and the so-called high intensity sweeteners. High fructose corn syrup is particularly suited to use in soft drinks. Until recently, the high intensity sweeteners have mainly been artificially synthesised compounds, such as acesulfame-k, aspartame, cyclamate, neotame and sucralose. In recent years some more natural high intensity sweeteners derived from plants have emerged in the marketplace, mainly from the stevia and monk fruit (luo han


guo) plants. Polyols are sweeteners with reduced calorific value that are derived from corn and sugar. Unlike high intensity sweeteners, polyols (such as sorbitol, mannitol, lactitol, maltitol, isomalt and xylitol) can also be used as bulking agents and to improve the texture of foods and beverages.

While sugar consumption has grown steadily over the past 20 years, alternative sweeteners have made substantial inroads into sugar's share of the world sweeteners market. A key driver of this is that alternative sweeteners deliver equivalent sweetness at lower cost than sugar. Another driver for high intensity sweeteners is that they are low in calorific value (sometimes almost zero), unlike sugar and high fructose corn syrup, and therefore useful in weight control diets.

Shares of world sweetener consumption (white sugar equivalent), by sweetener type

Source: International Sugar Organisation; F.O. Licht

The market share of high fructose corn syrup peaked at 8.2 per cent around 2000, but had declined to 6.8 per cent by 2012. The United States is the main producer of high fructose corn syrup, accounting for nearly 80 per cent of world exports in the three years to 2012.

US prices for high fructose corn syrup generally reflected movements in US corn prices until 2009-10, but since then have declined, in contrast to rising US corn prices. US production of high fructose corn syrup was 8.29 million tonnes in 2011-12, down marginally from the record 8.6 million tonnes in 2000-01.


High fructose corn syrup, sugar and corn prices

a Raw sugar price, duty paid, New York. b Spot price, high fructose corn syrup-42, dry weight, Mid West markets.

The estimated share of the high intensity sweeteners (artificial and natural) in the total sweeteners market (in sugar equivalent terms) has increased from 6.8 per cent in 1985 to 9.6 per cent in 2011. The stevia share was around 0.4 per cent in 2011 but has grown in response to regulatory approval in an increasing number of countries.

Stevia is the common name for a native South American plant. The steviol glycosides responsible for sweetness are mainly contained in the leaves and have almost zero calorific value. Stevia is mainly grown in China, but Argentina, Paraguay, Thailand, Kenya and the United States are also producers.

Stevia is typically used in food and beverages to reduce sugar content, rather than completely replace sugar, because sugar is needed to mask the bitter aftertaste of stevia sweeteners.

Stevia-based sweeteners were first commercialised in Japan in 1971 but faced regulatory hurdles in other countries. They have been approved as a dietary supplement in the United States for many years but approval for use in all foods did not occur until 2008. Other countries with unrestricted approval are Australia, China, the Republic of Korea, Taiwan, Indonesia, Thailand, Paraguay, Brazil, Argentina, Israel, the Russian Federation as well as the European Union (from December 2011).

Approval for use of sweeteners derived from monk fruit in food and beverages in the United States occurred in early 2010.

World sugar trade to grow in 2013-14

World sugar exports are forecast to be 57.1 million tonnes in 2013-14, 2.5 per cent more than in 2012-13. The forecast increase is driven by larger sugar supplies available for export in Brazil and Thailand and higher import demand for sugar from the European Union, United States and India.


Based on forecast higher sugar production, Brazilian sugar exports are expected to reach 27.5 million tonnes in 2013-14, up marginally from 27 million tonnes in 2012-13.

Sugar exports in Thailand are forecast to increase to a record 7.6 million tonnes in 2013-14, 24 per cent more than in 2012-13.

In the United States, sugar imports are forecast to increase by 14 per cent in 2013-14 to 3.2 million tonnes, reflecting forecast lower domestic production. This is despite the expectation that the US tariff quota for raw sugar in 2013-14 will be set at its minimum level allowable under World Trade Organization obligations. US domestic sugar prices have declined to levels close to the loan rate under the US farm program at which sugar could be forfeited to the Commodity Credit Corporation. This is due to increased sugar imports from Mexico to the United States (which are unrestricted and tariff-free under the North America Free Trade Agreement) and lower world sugar prices. To support domestic prices, the US Government has exercised various arrangements to limit sugar imports under other trade agreements.

Indonesian sugar imports are forecast to decrease to 3.1 million tonnes in 2013-14, 12 per cent lower than in 2012-13, reflecting a forecast 4 per cent rise in domestic sugar production to 2.9 million tonnes.

Sugar imports into the European Union are forecast to be 4.7 million tonnes in 2013-14, 9 per cent greater than in 2012-13. The forecast increase reflects lower production and higher domestic use.

Sugar imports by the Russian Federation are forecast to increase to 1.6 million tonnes in 2013-14, 0.8 million tonnes higher than in 2012-13 due to lower domestic production.

Changes in world sugar exports, by country

f ABARES forecast.

Record world sugar stocks in 2013-14

World closing stocks of sugar are forecast to increase by 4.8 million tonnes in 2013-14 to a record 78.8 million tonnes. The world stocks-to-use ratio is forecast to increase by 4.2


percentage points in 2013-14 to 45 per cent, which is above the average of 40 per cent for the 10 years to 2011-12.

World stocks-to-use ratio

f ABARES forecast.

Australian sugar production slightly lower in 2013-14

Australian sugar production is forecast to be 4.25 million tonnes in 2013-14, down slightly from 4.3 million tonnes in 2012-13. The forecast decline reflects flood damage to new plantings in early 2013 and lower average sugar yields, due in part to canopy syndrome disease in the Bundaberg and Isis regions.

The average return to Australian cane growers is forecast to decline by 24 per cent in 2013-14 to around $34 a tonne of sugar cane. The forecast decline in returns to growers reflects forecast lower world sugar prices in 2013-14, with its effect only partially offset by an assumed depreciation of the Australian dollar. The forecast return, if realised, will be the lowest since 2007-08.

Queensland Sugar Limited, the marketer of more than 90 per cent of Australia's raw sugar exports, forecasts its gross harvest pool return in 2013-14 to be $386 a tonne International Polarity Scale, down from $429 in 2012-13. However, Queensland Sugar Limited notes that the final harvest pool return depends on future movements in world sugar prices and the Australian exchange rate.

Australian sugar exports are forecast to remain largely unchanged in 2013-14 at 2.9 million tonnes. However, the value of Australian sugar exports is forecast to decline to $1.27 billion in 2013-14, compared with $1.4 billion in 2012-13.


Australian sugar production, exports and returns to cane growers

f ABARES forecast.

Sugar outlook

World aCategory unit 2011-12 2012-13 s 2013-14 f %

change

Production Mt 174.3 182.9 181.1 -1.0

- Brazil Mt 36.9 40.6 41.5 2.2

Consumption Mt 168.0 172.7 176.3 2.1

Exports Mt 54.3 55.7 57.1 2.5

Closing stocks Mt 63.8 74.0 78.8 6.5

Change in stocks Mt 5.4 10.2 4.8 - 52.9


Price USc/lb 22.7 18.0 16.0 -11.1

Australia bCategory unit 2011-12 2012-13 s 2013-14 f %

change

Area '000 ha 370 380 388 2.1

Production c kt 3 683 4 300 4 250 -1.2

Exports kt 2 572 2 996 2 999 0.1

- value A$m 1 556 1 403 1 267 - 9.7

a October-September years. b July—June years. c Raw tonnes actual. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; International Sugar Organization


CottonBenjamin K Agbenyegah

Marginal rise in world cotton prices in 2013-14

The world indicator price for cotton (Cotlook 'A' index) is forecast to average US90 cents a pound in 2013-14, marginally higher than the average of around US88 cents a pound in 2012-13. This forecast is made under the assumption that China will continue increasing its national cotton reserve during the remainder of 2013-14. It is mainly doing this by purchasing domestically produced cotton at minimum prices that are set well above world prices. Under this policy, China's cotton stocks will in effect be insulated from the world cotton market. The stocks-to-use ratio for the world as a whole is forecast to rise to a record in 2013-14. However, if China is excluded the ratio would be the lowest since 2009-10.

By the end of 2013-14 China is expected to be holding around 62 per cent of world cotton stocks. China's cotton stock management policies will be an important influence on world cotton prices in 2013-14. If China were to stop purchasing cotton for stock building or to draw down its cotton stocks, world cotton prices could be significantly lower than currently forecast. China's policy of maintaining domestic cotton prices above world prices has adversely affected the export competitiveness of its cotton processing industry.

Monthly cotton prices


World cotton indicators

f ABARES forecast.

Lower world cotton production in 2013-14

World cotton production is forecast to decline to 25.3 million tonnes in 2013-14 and will, as a result, be 4 per cent lower than in 2012-13. This reflects an estimated 2 per cent fall in world cotton plantings in response to more favourable prices for alternative crops in most major producing countries and unusually dry seasonal conditions in the United States. Lower cotton production forecasts for China and the United States are expected to more than offset production increases in India and Brazil.

Changes in world cotton production, by country

f ABARES forecast.

Cotton production in the United States is forecast to decline to 2.8 million tonnes in 2013-14 (25 per cent lower than in 2012-13) due to a 17 per cent decline in plantings and an


expected high abandonment rate. Estimated US cotton plantings in 2013-14 are at the lowest level in four years, due mainly to poor soil moisture conditions, particularly in the dryland cotton growing areas of the southwest and mid-south regions.

Cotton area and lint yield in the United States

f ABARES forecast.Note: Lint yield is off planted area.

Cotton production in China is forecast to decrease by around 6 per cent in 2013-14 to 7.2 million tonnes, reflecting an estimated 4 per cent reduction in cotton plantings which more than offsets the effects of a forecast small increase in average lint yields. While the Chinese Government maintains a minimum price to Chinese cotton growers (equivalent to around US$1.50 a pound), rising labour costs are reducing the profitability of cotton production, relative to other crops in China. The minimum government purchasing price for cotton in 2013-14 is expected to be maintained at the 2012-13 level (RMB20 400 a tonnes for Grade 328 cotton).

Cotton production in India is forecast to be 6.1 million tonnes in 2013-14, around 6 per cent greater than in 2012-13. This forecast reflects a 2 per cent increase in cotton planting and an assumed 4 per cent rise in average lint yields. The 2013 monsoon rains arrived on time and the cumulative seasonal rainfall to date is 11 per cent above the long period average. India is an important world cotton producer and consumer, second to China in production and the United States in exports (see box).

Indian cotton industry

In the five years to 2012-13 India accounted for 22 per cent of world cotton production and 17 per cent of world cotton exports.

Cotton contributes significantly to India's economy through providing employment and generating export earnings. The cotton sector employs around 6 million farmers and up to 50 million people involved in processing and trade. Cotton accounts for around 75 per cent of Indian mill consumption of textile fibres. The textile industry provides 14 per cent of the value of industrial production, 4 per cent of the gross domestic product and 17 per cent of export earnings. In 2011-12 the Indian textile industry generated export earnings of US$26.8 billion.


Improved agronomic techniques, the 2002 introduction of hybrid and genetically modified cotton varieties and the 2005-06 introduction of cotton varieties genetically modified to be resistant to insects have led to sharp increases in Indian cotton production. In 2011-12 genetically modified cotton varieties accounted for 92 per cent of total cotton plantings in India. Cotton production in India in the five years to 2011-12 was 66 per cent higher than in the five years to 2004-05.

Cotton indicators, India

f ABARES forecast.

Each year the Indian Government sets minimum support prices for its cotton growers for the various quality types of seed cotton (kapas), taking into account domestic and international supply and demand conditions. Minimum support prices are maintained through purchases of kapas at auction by the Cotton Corporation of India, a statutory government organisation.

In 2008-09 when world cotton prices declined sharply to around US61 cents a pound due to the global financial crisis the Cotton Corporation of India purchased around 31 per cent of domestic cotton production. However, when world cotton prices recovered in 2009-10 it disposed of 1.3 million tonnes of accumulated cotton stocks to the domestic market.


Indian domestic cotton prices

Operations of the Cotton Corporation of India

The Indian Government controls raw cotton exports in order to keep cotton prices low for its domestic textile industry. For example, in 2010-11 it restricted cotton exports to only 1.1 million tonnes, compared with 1.4 million tonnes the previous year, despite higher domestic cotton production. India exported a record 2.4 million tonnes of raw cotton in 2011-12, exceeding the government-set target for the year. As a result the government imposed a two-month ban on cotton exports.

Modest growth in world cotton consumption in 2013-14

World cotton consumption is forecast to be 23.9 million tonnes in 2013-14, 2 per cent larger than in 2012-13. The forecast increase is based on assumed strong economic growth in developing countries, in particular India, Pakistan and Bangladesh. Nevertheless, world cotton consumption growth is constrained by relatively higher prices, particularly in China where minimum support prices to cotton growers are much higher


than world cotton prices. Cotton consumption in China is forecast to remain largely unchanged in 2013-14 at 7.8 million tonnes. Cotton is losing share to polyester in world fibre markets as the gap between cotton and polyester prices widens in 2013 after narrowing throughout most of 2012.

World weekly apparel fibre prices

Record world cotton stocks in 2013-14

With world cotton production forecast to exceed world consumption for the fourth year in a row, world closing stocks of cotton are forecast to increase to a record 20.4 million tonnes in 2013-14; around 9 per cent more than in 2012-13. Much of the increase in world stocks is expected to occur in China, under the assumption of continuing stock building.

China purchased 6.6 million tonnes of cotton in 2012-13 from its domestic crop and added to the national reserve. China is forecast to accumulate 62 per cent of world cotton stocks by the end of 2013-14 lifting its stocks-to-use ratio to a record 162 per cent.

However, while the world cotton stocks-to-use ratio is forecast to reach a record 85.4 per cent by the end of 2013-14, the ratio for the world—excluding China—is expected to decline to 48 per cent, its lowest level in four years.


Stocks-to-use ratios for cotton

f ABARES forecast.

World trade lower in 2013-14

World cotton exports are forecast to decline by around 18 per cent in 2013-14 to 8.4 million tonnes. This forecast decrease reflects expected lower import demand for cotton by China, increases in domestic use in most major producing countries and forecast lower cotton production for the United States.

In 2013-14 China's cotton imports are forecast to decline by 45 per cent to 2.4 million tonnes as rebuilding of China's strategic reserve slows. This is in excess of China's tariff import quota of 894 000 tonnes of cotton under its World Trade Organization obligations (subject to a 1 per cent tariff). The forecast of China's cotton imports in 2013-14, if realised, will be less than half the record imports in 2011-12 and the lowest in four years.

Cotton exports by the United States—the world's largest exporter—are forecast to be 2.3 million tonnes in 2013-14 compared with 2.9 million tonnes in 2012-13. The forecast decline reflects an expected lower domestic cotton production. If realised, this would be the lowest export level of raw cotton in 13 years.

In 2013-14 lower cotton exports are also forecast for India (down 18 per cent to 1.4 million tonnes), Australia (down 24 per cent to 992 000 tonnes) and Brazil (down 14 per cent to 566 000 tonnes).

Australian cotton production slightly lower in 2013-14

Australian cotton production is forecast to be 990 000 tonnes in 2013-14; only 1.2 per cent lower than the 1 million tonnes harvested in 2012-13. The forecast reflects favourable cotton prices in Australian dollars and plentiful supplies of irrigation water in almost all Australian cotton growing regions. At 12 September 2013 the public irrigation dams were around 72 per cent of capacity compared with an average of 40 per cent at the same time over the 10 years to 2011.


Storage levels of main irrigation dams, at 12 September 2013

Forecast gross margins for dryland crop production alternatives in the summer rainfall regions of Australia in 2013-14 favour increased dryland cotton production at the expense of grain sorghum production. Based on existing soil moisture conditions in the cotton growing regions, dryland cotton plantings are forecast to recover to 40 000 hectares in 2013-14 compared with 23 000 hectares in 2012-13.

Recovery in Australian cotton prices

The average return to Australian cotton growers at the gin-gate is forecast to be $523 a bale (227 kilograms) of lint (including the value of cottonseed and net of ginning costs) in 2013-14 compared with $474 a bale received in 2012-13. The forecast higher return reflects the forecast higher world cotton prices and an assumed depreciation of the Australian dollar. The forecast return is only slightly lower than the average of the 10 years to 2011-12 of $545 a bale in real terms.

Australian cotton exports lower in 2013-14

Australian cotton exports are forecast to be 992 000 tonnes in 2013-14 compared with last year's record of 1.3 million tonnes. This forecast decrease reflects a reduction in cotton supplies available for export due to lower production in 2013-14. Almost all Australian cotton production is exported and the typical March to June harvest means Australian cotton production in one financial year is exported over two financial years. Based on production forecasts for major world cotton exporting countries in 2013-14 Australia would maintain its position as the world's third largest cotton exporter, behind the United States and India.


Australian cotton production, exports and gin-gate returns

a value of lint and cottonseed, less ginning costs. f ABARES forecast.

Cotton outlook

World aCategory unit 2011-12 2012-13 s 2013-14 f % change

Production Mt 27.2 26.4 25.3 -4.2

Consumption Mt 22.5 23.4 23.9 2.1

Exports Mt 10.0 10.2 8.4 -17.6

Closing stocks Mt 15.6 18.8 20.4 8.5

Stocks-to-use ratio % 69.4 80.4 85.4 6.2

Cotlook 'A' index USc/lb 100.1 87.9 90.0 2.4

Australia bCategory unit 2011-12 2012-13 s 2013-14 f % change

Area harvested '000 ha 600 442 434 -1.8

Lint production kt 1 198 1 002 990 -1.2

Exports kt 994 1 306 992 -24.0

- value A$m 2 736 2 693 2 263 -16.0

a August—July years. b July-June years. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; United States Department of Agriculture


Wine grape production projections to 2014-15Caroline Gunning-Trant and Walter Shafron

Wine grape production is estimated at 1.69 million tonnes in 2012-13, 7 per cent higher than in 2011-12.

Wine grape production is projected to increase by 2 per cent to 1.73 million tonnes in 2013-14 and to remain largely unchanged in the two years to 2014-15.

Assuming favourable seasonal conditions, wine grape production in the cool climate zones is expected to increase by 4 per cent, while production in the warm climate zones is expected to increase only slightly out to 2014-15.

Summary

This report provides estimates of wine grape production for the 2011-12 vintage and production projections for 2012-13, 2013-14 and 2014-15. The estimates cover 10 premium specialist wine grape varieties in each of Australia's wine grape producing zones based on 2011-12 ABS vineyards survey. These premium varieties account for about 85 per cent of total wine grape production in Australia. The ABS vineyards survey was again the sole source of vine bearing area data used as the basis of ABARES production projections.

Wine grape production in 2011-12

In 2011-12, Australian producers harvested 1.58 million tonnes of grapes for winemaking, an increase of around 1 per cent from the 2010-11 harvest of 1.56 million tonnes. The largest increases were in the Limestone Coast geographical indication (GI) zone (31 per cent), the Lower Murray zone (18 per cent), the North East Victoria zone (13 per cent) and the Murray-Darling - Swan Hill zone (11 per cent). Those increases were offset by decreases in other GI zones that could generally be attributed to high rainfall.

Persistent rainfall in the eastern states that began in late January required growers to be vigilant in their canopy management regimes to control outbreaks of disease. Because seasonal temperatures were relatively mild and crops lighter, harvest in many eastern zones began earlier than usual. This proved fortuitous in zones where harvesting began before heavy rain fell across New South Wales and north-east Victoria in late February and early March. In zones that had either not finished harvesting or had just begun, persistent summer rainfall resulted in some crop losses and downgrading of fruit. According to the Australian Bureau of Statistics (ABS), an estimated 3842 hectares of vines were removed or grafted during 2011-12, which further contributed to the fall in production in those zones.

The effect of heavy late summer rains was highly variable. Some vineyards in GI zones such as those in the Hunter Valley and Central Ranges sustained significant damage. This caused some growers to abandon their crop, particularly those growing shiraz. In the Central Victoria, Gippsland and Port Phillip zones, the quality of grapes was affected; with reports of berries splitting and outbreaks of botrytis in varieties like chardonnay, pinot noir and cabernet sauvignon.

For most GI zones in eastern Australia, average wine grape yields were below the five-year average to 2010 (the last year the ABS released variety-specific data). The wet and


humid conditions of 2011 resulted in a lower fruit set in some zones for the 2012 crop. As a result, vines in 2012 generally had fewer grape bunches with smaller berries. Despite the lighter crop, the quality of the 2012 vintage was better than that of 2011.

In 2011-12 total bearing area fell 4 per cent relative to 2010-11, to 145 382 hectares. The total non-bearing area was 34 per cent lower in 2011-12 compared with 2010-11, at 3117 hectares. This meant a significant area of wine grape vines came into full bearing in 2011-12. More than half of the total decrease in non-bearing area between 2010-11 and 2011-12 can be attributed to the Murray-Darling - Swan Hill zone (466 hectares) and the Big Rivers zone (387 hectares).

Permanent removal of vines from production also explains some reduction in non-bearing area. The area of grapes removed from production (by removing, grafting off or abandoning to die) before the 2011-12 harvest was 3842 hectares, 34 per cent lower than the area removed from production in 2010-11 (5819 hectares).

Wine grape production in 2012-13

Seasonal conditions preceding the 2013 vintage were better than the previous two years across the country. Conditions were generally hot and dry with a few notable rain events. A heatwave in January in South Australia and the eastern states did not significantly affect yields because of the good soil moisture profile stemming from the 2012 winter rains. At the same time, heavy coastal rainfall in southern Queensland and the north coast of New South Wales was early enough in the season to not have any significant effect on yields (WGGA 2013).

Late summer rain in the Hunter, Mudgee and Orange GI regions did not affect yields of white wine grape varieties as they had largely been harvested. The rain helped slow sugar development in red wine grapes, which had been accelerated by hot and dry seasonal conditions (WGGA 2013).

Wine grape production is estimated at 1.69 million tonnes in 2012-13, 7 per cent higher than in 2011-12. This reflects an estimated 1 per cent increase in bearing area of wine grapes in 2012-13 (except multipurpose grapes for drying and table use), to 146 253 hectares. The quality of the red and white wine grape crop in 2012-13 was generally good.

Production of most major commercial varieties is estimated to have been higher in 2012-13 than in 2011-12. Pinot noir and muscat gordo blanco experienced the largest increase in percentage terms; production rose by 16 per cent and 14 per cent, respectively. By contrast, semillon fell by 6 per cent and riesling by 5 per cent.

For the leading commercial white wine grape varieties, production of chardonnay is estimated to have increased an estimated 6 per cent in 2012-13, sauvignon blanc rose by an estimated 10 per cent, while semillon is estimated to have declined by 6 per cent. For the red wine grapes, production of shiraz accounts for more than 47 per cent of all red varieties and is estimated 12 per cent higher in 2012-13 than in 2011-12. Production of cabernet sauvignon and merlot increased by an estimated 12 per cent and 1 per cent, respectively, in 2012-13 compared with 2011-12.

Projected wine grape production in 2013-14 and 2014-15

Wine grape production is projected to increase by 2 per cent to 1.73 million tonnes in 2013-14 and to remain largely unchanged in 2014-15. This forecast is primarily based on


the assumption of favourable seasonal conditions (that is, without the occurrence of a severe weather event), good fruit set stemming from the 2012-13 season, a return of yields to their long-term average and a small increase in bearing areas. The national bearing area in 2013-14 is forecast to be around 147 356 hectares and to increase slightly in 2014-15 to 148 286 hectares.

The bearing area for red wine grapes is usually larger than for white wine grapes and this is projected to remain the case to 2014-15. In the five years to 2011-12 (excluding 2010-11 for which no detailed varietal data was collected by the ABS), an average of 61 per cent of Australia's total bearing area was planted to red wine grape varieties. Over the same period, yields of red wine grapes averaged around 25 per cent lower than for white wine grapes. Assuming the proportion of bearing area for red wine grapes remains steady, the area planted to red wine grapes in 2014-15 is projected to be about 91 000 hectares and production projected at around 927 800 tonnes.

Australian wine grape production, by category

s ABARES estimate. z ABARES projection.Note: Multipurpose grapes have not been reported separately from red and white grapes since 2008-09. 2010-11 is an ABARES estimate as the ABS did not collect detailed varietal data for that period. Source: ABS 2013; ABS 2011

For the leading commercial white wine grape varieties —chardonnay, sauvignon blanc and semillon—production in 2013-14 and 2014-15 is projected to remain steady. For the leading red wine grape varieties, production of shiraz is projected to rise by 9 per cent in 2013-14 as yields return to longer-term averages and to remain relatively unchanged in 2014-15. Production of cabernet sauvignon and merlot is projected to remain relatively steady in the two years to 2014-15, assuming favourable seasonal conditions.


Australian production of top three white varieties

s ABARES estimate. z ABARES projection.Note: 2010-11 is an ABARES estimate as the ABS did not collect detailed varietal data for that period.Source: ABS 2013; ABS 2011

Australian production of top three red varieties

s ABARES estimate. z ABARES projection.Note: 2010-11 is an ABARES estimate as the ABS did not collect detailed varietal data for that period.Source: ABS 2013; ABS 2011


Estimated and projected wine grape production in Australia, by zone

South AustraliaArea Estimated

2011-12kt

Projected production

2012-13skt


2013-14zkt


2014-15zkt

Barossa 74 82 90 90

Mt Lofty Ranges 51 63 67 67

Fleurieu 99 111 114 113

Limestone Coast 107 121 120 120

Lower Murray a 436 437 431 430

Far North and The Peninsulas 1 1 1 1

Total 769 815 822 821

New South Wales and ACTArea Estimated

2011-12kt


2012-13skt


2013-14zkt


2014-15zkt

Hunter Valley 11 13 15 15

Big Rivers (excl. Murray-Darling) a 249 284 301 303

Central Ranges 20 29 31 31

North and West New South Wales 0 1 1 1

Southern New South Wales 7 9 10 10

South Coast 2 2 2 2

ACT 0 0 0 0

Total 289 340 360 362

VictoriaArea Estimated

2011-12kt


2012-13skt


2013-14zkt


2014-15zkt

Central 25 29 31 31

North East 19 22 23 23

Gippsland and Port Phillip 19 22 24 24

North West and Western Victoria 7 8 9 9

Total 69 81 86 87

Western Australia


Area Estimated2011-12

kt


2012-13skt


2013-14zkt


2014-15zkt

South West Australia 61 60 61 61

Greater Perth and other WA 7 7 7 7

Total 68 67 68 68

Murray-Darling - Swan Hill a 380 382 379 379

Tasmania 5 7 8 8

Queensland 1 1 2 2

Australia 1582 1695 1725 1727a Warm climate zone. s Estimate. z Projection.

Estimated and projected wine grape bearing; areas in Australia, by zone

South AustraliaArea Estimated area

2011-12ha

Projected area2012-13s

ha

Projected area

2013-14zha

Projected area

2014-15zha

Barossa 12 342 12 585 12 833 12 976

Mt Lofty Ranges 8 625 8 664 8 750 8 825

Fleurieu 13 224 13 254 13 289 13 355

Limestone Coast 15 037 15 064 15 086 15 141

Lower Murray a 20 495 20 553 20 643 20 732

Far North and The Peninsulas 246 246 246 246

Total 69 970 70 366 70 847 71 275

New South Wales and ACTArea Estimated area

2011-12ha


ha

Projected area

2013-14zha

Projected area

2014-15zha

Hunter Valley 2 628 2 638 2 654 2 659

Big Rivers (excl. Murray-Darling) a 21 188 21 375 21 487 21 703

Central Ranges 5 126 5 139 5 180 5 215

North and West New South Wales 288 288 291 294

Southern New South Wales 1 507 1 509 1 523 1 534

South Coast 359 361 362 362

ACT 70 70 70 71

Total 31 166 31 381 31 568 31 838

Victoria


Area Estimated area2011-12

ha


ha

Projected area

2013-14zha

Projected area

2014-15zha

Central 4 269 4 296 4 336 4 368

North East 3 046 3 053 3 069 3 097

Gippsland and Port Phillip 4 326 4 344 4 396 4 432

North West and Western Victoria 1 702 1 723 1 807 1 818

Total 13 343 13 416 13 608 13 715

Western AustraliaArea Estimated area

2011-12ha


ha

Projected area

2013-14zha

Projected area

2014-15zha

South West Australia 9 202 9 311 9 382 9 403

Greater Perth and other WA 1 115 1 121 1 132 1 137

Total 10 316 10 433 10 514 10 541

Murray-Darling - Swan Hill a 18 630 18 711 18 839 18 889

Tasmania 1 229 1 251 1 276 1 318

Queensland 690 694 705 711

Australia 145 343 146 253 147 356 148 286a Warm climate zone. s Estimate. z Projection.

Production in the warm and cool climate zones

Warm climate zones across Australia produce about 60 per cent of the national crop. They are characterised by a greater reliance on irrigation, higher yields and generally lower wine grape prices than cool climate zones. The warm climate zones are the Lower Murray in South Australia, Big Rivers in New South Wales and Murray-Darling - Swan Hill, which covers parts of Victoria and New South Wales. All other Australian zones are regarded as cool climate zones.

In 2012-13 yields across warm climate zones averaged an estimated 18.2 tonnes a hectare, compared with 17.8 tonnes a hectare in 2011-12. This rise can be attributed to improved seasonal conditions in the eastern states, with good canopy coverage protecting fruit from extreme heat, good water availability and adequate soil moisture. Despite improved yields across the warm climate zones, production in the Lower Murray and Murray-Darling - Swan Hill zones rose by less than 1 per cent. A more significant increase was achieved in the Big Rivers zone, where wine grape production in 2012-13 is estimated to have been 14 per cent higher than 2011-12.

In the two years to 2014-15 wine grape production in warm climate zones is expected to increase slightly relative to 2012-13. This projection assumes favourable seasonal conditions and a return of yields to close to the long-term average.

Wine grape production in cool climate zones is estimated to have increased by almost 15 per cent in 2012-13 compared with 2011-12. With seasonal conditions in the eastern


states and Western Australia generally warm and dry, average yields are estimated to be about 14 per cent higher.

In the two years to 2014-15 wine grape production in the cool climate zones is expected to increase by 4 per cent relative to 2012-13, assuming favourable seasonal conditions.

References

ABS 2013, Australian wine and grape industry, cat. no. 1329.0.55.002 (and previous issues), Australian Bureau of Statistics, Canberra.

ABS 2011, Vineyards Australia, cat. no.1329.0.55.002, Australian Bureau of Statistics, Canberra.

WGGA 2013, 'Harvest report 2013', Wine Grape Growers Australia, Adelaide, available at wgga.com.au/wp-content/uploads/Harvest-Report-MAR-2013.pdf (pdf 267kb).


http://wgga.com.au/wp-content/uploads/Harvest-Report-MAR-2013.pdf

Agriculture - LivestockBeef and vealClay Mifsud and Caitlin Murray

After falling by 10 per cent in 2012-13, the Australian weighted average saleyard price of beef cattle is forecast to average 3 per cent higher in 2013-14 at 305 cents a kilogram (dressed weight), reflecting higher prices in southern Australia more than offsetting the effect of lower prices in northern Australia.

Restocker demand in southern Australia is expected to rise as producers seek to increase herds after the high slaughter rates over the past 12 months, placing upward pressure on prices of store cattle. In addition, higher export demand, particularly from emerging markets, is expected to place upward pressure on prices of slaughter cattle in Southern Australia.

Nevertheless, higher average prices in southern Australia are likely to be partially offset by lower average prices in northern Australia, as supply of slaughter cattle remains high and producers continue to destock (see box).

Australian cattle slaughter and weighted average saleyard price

f ABARES forecast.

An assumed lower Australian exchange rate is likely to make the two-thirds of Australian beef production that is exported more price competitive in export destinations. Export demand from the United States as well as emerging markets in China, South-East Asia and the Middle East is expected to increase, offsetting lower demand from the largest market, Japan. With the Australian dollar assumed to average lower in 2013-14 compared with 2012-13, returns to exporters, in Australian dollar terms, are expected to rise.


Effect on the cattle market of drought in Queensland

During most of 2012-13 and continuing into 2013-14, poor seasonal conditions in Queensland resulted in many producers being forced to offload cattle. As a result of the increased supplies, prices of slaughter age cattle fell.

Around 50 per cent (20 shires) of Queensland's total land area was drought declared at August 2013.

Rainfall deficiency for Australia, 12 months to 31 August 2013

Source: Bureau of Meteorology

The poor seasonal conditions in Queensland contributed to an increase in the number of cattle in feedlots as producers turned to supplementary feeding. The number of Queensland cattle on feed in the June quarter 2013 was 11 per cent higher than the March quarter, increasing to 523 000 head (60 per cent of the national total) of cattle on feed .

Higher cattle slaughter led to beef and veal production in Queensland increasing by 6 per cent in 2012-13 to a record 1.1 million tonnes. As beef production rose, so did beef and veal exports from Queensland; increasing by 5 per cent in 2012-13 to 636 000 tonnes (shipped weight), 63 per cent of total Australian beef and veal exports.

Exacerbating the oversupply in drought affected areas of Queensland has been an increase in stocking rates over the past several years. According to the Australian Bureau of Statistics, beef cattle numbers increased by 77 per cent in central western Queensland


and by 33 per cent in south western Queensland in the 10 years before the 2012-13 season.

The drought induced sell-off of Queensland cattle contributed to an increasing price disparity between Queensland and southern Australia, where seasonal conditions were generally more favourable. In the first two months of 2013-14 young cattle prices in Queensland averaged around 12 per cent lower than in New South Wales and Victoria. Similarly, prices of medium cows and heavy steers averaged 19 per cent and 14 per cent lower, respectively, than the southern states.

Slaughter and production to rise

Australian cattle and calf slaughter is forecast to increase by 3 per cent in 2013-14 to 8.7 million head, underpinning an increase in beef and veal production to 2.3 million tonnes. In northern Australia cattle turn-off is expected to remain high as producers continue to destock, after stocking rates increased to their highest in 20 years coming into the 2012-13 season. For the nation as a whole, cattle inventories are expected to fall by 2 per cent to 27.8 million head by June 2014.

In 2012-13 Australian cattle slaughter increased by 7 per cent to around 8.5 million head, the highest in six years. Female cattle slaughter increased by 15 per cent to 3.5 million head and male cattle slaughter increased by 4 per cent to 4.3 million head. Deteriorating seasonal conditions in many cattle producing regions resulted in many producers sending more female cattle to slaughter. This is reflected in a 2 per cent decline in average adult carcass weights to 283 kilograms, over the 12 months to June 2013. Despite the decline in average carcass weights, beef and veal production in 2012-13 increased to a record 2.2 million tonnes.

Emerging markets driving export growth

Australian beef and veal exports are forecast to increase by around 6 per cent in 2013-14 to 1.07 million tonnes (shipped weight). This reflects increased exports to the emerging markets of China, South-East Asia and the Middle East offsetting lower exports to the largest market, Japan. With the Australian dollar assumed to average lower in 2013-14 than it did in 2012-13, Australian beef and veal is expected to be more price competitive in export markets over the coming year. The value of beef and veal exports is forecast to rise by 6 per cent to around $5.2 billion.

In 2012-13 Australian beef and veal exports increased by 7 per cent to a record of a little more than 1 million tonnes (shipped weight), reflecting increased domestic supply and greater demand from China, South-East Asia and the Middle East.


Australian beef and veal exports

f ABARES forecast.

Lower exports to Japan

Australian beef and veal exports to Japan are forecast to fall by 5 per cent in 2013-14 to 285 000 tonnes (shipped weight), reflecting increased competition from US beef. Total beef import volumes in Japan are expected to remain largely unchanged in 2013-14, but the proportion of US beef imports is expected to continue rising.

US beef exports to Japan have increased substantially since the Japanese Government's decision in February 2013 to relax bovine spongiform encephalopathy related import restrictions. As a result, the proportion of US beef production eligible for the Japanese market increasing from less than 50 per cent to more than 90 per cent. Japanese beef imports from the United States can now be sourced from cattle slaughtered at up to 30 months of age; previously a restriction had been in place limiting beef imports from cattle slaughtered at less than 21 months of age. Strong growth in US beef exports to Japan is expected to continue over 2013-14 as the Japanese market offers US exporters favourable returns compared with most other markets.

In 2012-13 Australian beef and veal exports to Japan fell by 8 per cent to 299 000 tonnes (shipped weight). Australian beef made up 58 per cent of Japanese beef imports in 2012-13, 6 percentage points lower year-on-year, while the share of US beef increased by 5 percentage points to 29 per cent.


Beef and veal imports, Japan

f ABARES forecast.

Increased exports to United States

Australian beef and veal exports to the United States in 2013-14 are forecast to increase by 11 per cent to 230 000 tonnes (shipped weight). Higher exports to the US reflect forecast lower domestic supply of manufacturing beef in the US and an assumed depreciation of the Australian exchange rate.

Production of cow beef—a competing product of Australian lean manufacturing beef—is expected to fall in the United States in 2013-14 resulting in increased demand for imports. Improving seasonal conditions in the United States have resulted in the proportion of pastures rated as being in fair to excellent condition reaching 64 per cent in September 2013, compared with 42 per cent in September 2012. As a result, liquidation of US beef cow herds is expected to slow. In addition, slaughter of dairy cows is expected to fall in 2013-14 because of an expected increase in the milk-to-feed price ratio.

Increased demand for imported manufacturing beef is likely to offer additional incentive for Australian exporters to divert beef to the US market. An assumed lower Australian exchange rate would result in prices to Australian exporters increasing at a faster rate than in US dollar terms. Despite these developments, beef exports to the United States in 2013-14 are not expected to exceed the 10-year average of 267 000 tonnes. The opportunities in new markets for Australian manufacturing beef in Asia and the Middle East is expected to constrain, to some extent, growth in Australian beef exports to the United States.

In 2012-13 Australian beef and veal exports to the United States increased by 1 per cent to 207 000 tonnes (shipped weight). Australia was the largest supplier of imported beef to the United States, accounting for around 28 per cent of all imports. New Zealand, Canada and Mexico accounted for 25 per cent, 23 per cent and 14 per cent of US imports in 2012-13, respectively.


Australian beef and veal exports to the United States

f ABARES forecast.

Exports to the Republic of Korea to rise

Australian beef and veal exports to the Republic of Korea are forecast to increase by 3 per cent in 2013-14 to 142 000 tonnes (shipped weight), reflecting reduced supply of US beef in the Korean import market and the lower assumed value of the Australian dollar. Since the Japanese Government eased restrictions on imports of US beef in February 2013, US exports to Japan increased by more than 50 per cent year-on-year and exports to the Republic of Korea decreased. Exports of US beef to the Republic of Korea are expected to be lower again in 2013-14, reflecting more favourable returns to US beef exports in Japan. In addition, the assumed lower Australian dollar is expected to help Australian beef be price competitive in the Korean import market. The tariff differential between Australian and US beef in the Korean market will increase to 8 percentage points on 1 January 2014 in the United States' favour.

In 2012-13 Australian beef and veal exports to the Republic of Korea increased by 12 per cent to 138 000 tonnes (shipped weight) reflecting reduced competition from US beef and the competitive pricing of Australian beef. Australian beef made up 54 per cent of Korean beef imports in 2012-13, 4 percentage points higher year-on-year, while the share of US beef fell 3 percentage points to 35 per cent. Higher prices for US beef in Japan, Taiwan and Hong Kong resulted in US exporters sending more beef to those markets instead of the Republic of Korea. Additionally, the landed price of Australian chilled and frozen beef averaged 7 per cent and 15 per cent lower, respectively, than US chilled and frozen beef in 2012-13.

Rising beef prices in China supporting imports

In 2012-13 Australian beef and veal exports to China increased to 92 000 tonnes (shipped weight)—85 000 tonnes higher than the previous year—resulting in China becoming Australia's fourth largest export market. Over the five years to 2012-13 beef prices in China more than doubled as demand outstripped domestic supply, resulting in increased import demand. In Australia, the number of meat processing facilities approved to export to China increased by more than 20, increasing the potential availability of Australian beef for China.


Australian beef and veal exports to China

f ABARES forecast.

Growth in beef and veal exports to China is forecast to moderate in 2013-14 to a year-on-year increase of around 40 per cent to 130 000 tonnes (shipped weight). Growth in domestic beef prices in China has begun to slow after the significant increase in imports from Australia and New Zealand. Australia's share of Chinese beef imports is expected to rise in 2013-14 as Brazilian beef—previously a key competitor to Australia—remains banned in China because of detection of bovine spongiform encephalopathy in that country.

Compared with a decade ago, the Chinese market is taking a wider variety of Australian beef cuts, with a higher average value. So far in 2013-14 the top three beef cuts exported to China were shin/shank (with a share of 20 per cent), brisket (18 per cent) and silverside/outside (12 per cent). This compares with 2003-04 when more than two-thirds of beef exports to China were of lower value manufacturing beef.

Rising demand in South-East Asia

In 2012-13 Australian beef and veal exports to South-East Asia increased by 5 per cent to a record 94 000 tonnes (shipped weight) as increased exports to the Philippines, Malaysia, and Singapore offset lower exports to Indonesia. In pursuit of its self-sufficiency goals, the Indonesian Government imposed lower import quotas for beef during 2012-13, which restricted Australian exports.

In 2013-14 Australian beef exports to South-East Asia are forecast to increase by 6 per cent to 100 000 tonnes. Import demand for beef in South-East Asia is expected to rise in 2013-14 as demand for beef rises faster than local production. The Indonesian Government has announced it will disband the import quota system for beef and will move to a reference price mechanism for imports (see box).

Exports to the Middle East rising

In 2012-13 beef and veal exports to the Middle East increased by 52 per cent to a record 48 000 tonnes (shipped weight). This largely reflected increased demand from Saudi Arabia after the Saudi Government banned imports of Brazilian beef given the detection


of bovine spongiform encephalopathy in that country. Saudi Arabia accounted for 40 per cent of Australian beef and veal exports to the Middle East in 2012-13. In 2013-14 beef and veal exports to the Middle East are forecast to increase by 15 per cent to 55 000 tonnes. At September 2013 no date had been established for re-entry of Brazilian beef into Saudi Arabia.

Beef and veal outlook

Category unit 2011-12 2012-13 s 2013-14 f % change

Cattle numbers a million 28.4 28.0 27.8 - 0.7

- beef million 25.7 25.3 25.1 - 0.8

Slaughterings '000 7 873 8 457 8 700 2.9

Production kt 2 115 2 245 2 300 2.4

Exports (shipped weight)Category unit 2011-12 2012-13 s 2013-14 f % change

- to United States kt 205 207 230 11.1

- to Japan kt 326 299 285 - 4.7

- to Korea, Rep. of kt 123 138 142 2.9

- total kt 948 1014 1 070 5.5

- value A$m 4 467 4 864 5 150 5.9

PriceCategory unit 2011-12 2012-13 s 2013-14 f % change

- saleyard Ac/kg 329 297 305 2.7

- US import USc/kg 433 438 445 1.6

- Japan import USc/kg 600 589 565 - 4.1

a At 30 June. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture, Fisheries and Forestry

Live animal exports

Live feeder and slaughter cattle

In 2012-13 feeder and slaughter cattle exports declined by 11 per cent to 513 000 head. The largest decline was in exports to Indonesia, which fell by 109 000 head to 266 000 head, reflecting reduced Indonesian import quota. Shipments to Egypt also declined by 17 000 head following Egyptian concerns over Australian cattle being treated with hormone growth promotants. Exports to Malaysia, the Philippines, Brunei Darussalam and Vietnam partially offset these declines with exports to these markets reaching a total of 95 000 head, 45 000 head more than in 2011-12.


Australian feeder and slaughter cattle exports to Malaysia, Philippines, Brunei Darussalam and Vietnam

Feeder and slaughter cattle exports are forecast to rise by 15 per cent in 2013-14 to around 590 000 head, mainly because of changes to Indonesia's import policy and continuing demand from other countries in South-East Asia.

Cattle exports to Indonesia are assumed to rise in 2013-14 following removal of the Indonesian import quota in September 2013 and adoption of a reference price mechanism for beef. The Indonesian Government intends to issue permits for cattle and beef imports when the Indonesian beef price for secondary cuts exceeds the reference price of 76 000 rupiah (A$7.60) per kilogram by 15 per cent; imports will be restricted when the price falls to 5 per cent below the reference price. Currently, prices of secondary cuts are around 90 000 rupiah (A$9.00) per kilogram.

The value of cattle exports is forecast to increase by 15 per cent to $389 million in 2013-14, partially assisted by an assumed lower Australian dollar.

Live breeder and dairy cattle

Breeder and dairy cattle exports increased by 16 per cent in 2012-13 to a record 121 000 head. Exports to Asia rose by 13 000 head, while exports to the Middle East rose by 3000 head. China and the Russian Federation were the largest export markets, accounting for 49 per cent and 30 per cent of total exports, respectively.


Australian breeder and dairy cattle exports

Exports of breeder and dairy cattle are forecast to increase by 7 per cent to 130 000 head in 2013-14, reflecting continuing demand from Asia.

The value of breeder and dairy cattle exports is forecast to increase by 8 per cent to $270 million in 2013-14, reflecting the forecast increase in the number of cattle exported.

Live sheep exports

Australian sheep exports fell by 22 per cent to around 2 million head in 2012-13. Exports have declined by 10 per cent a year on average since 2005-06 because of increasing competition in export markets from African and eastern European sheep exports. The decline in 2012-13 was magnified by the loss of the Bahrain export market when trade was suspended in August 2012.

In 2012-13 sheep shipments declined to Bahrain by 325 000 head, to Turkey by 226 000 head and to Kuwait by 208 000 head. Partially offsetting these declines were increased exports to Qatar, which took 138 000 head more than in 2011-12.

Sheep exports to the Middle East accounted for 95 per cent of total exports in 2012-13. Exports to the region have historically been larger in the month preceding Eid-ul-Adha, the festival of sacrifice. In 2013 the festival will be held in October, with large shipments of sheep to the Middle East expected for September.

Australian sheep exports are forecast to increase by 5 per cent in 2013-14 to reach 2.1 million head. Exports to the Middle East are forecast to remain at around 95 per cent of the total volume, with most of the remainder expected to be sent to South-East Asia.

The value of sheep exports for 2013-14 is forecast to rise by 16 per cent to $225 million, largely the result of the expected increase in the volume of exports and higher sheep prices.


Australian sheep exports, by destination

Outlook for live cattle and sheep exports

Live cattleCategory unit 2011-12 2012-13 s 2013-14 f % change

Volume live cattle - Feeder/slaughter

'000 579 513 590 15.0

Volume live cattle - Breeder '000 105 121 130 7.4

Value live cattle - Feeder/slaughter

A$m 412 339 389 14.7

Value live cattle - Breeder A$m 239 251 270 7.6

Live sheep aCategory unit 2011-12 2012-13 s 2013-14 f % change

Volume live sheep '000 2 562 2 000 2 100 5. 0



Value live sheep A$m 345 194 225 16.0

Total export value A$m 996 783 884 12.9

a Includes animals for breeding. f ABARES forecast. s ABARES estimate.Source: Australian Bureau of Statistics

Indonesian beef imports and reference price mechanism

The Indonesian Government is aiming for 90 per cent self-sufficiency in beef production by 2014. This includes plans to reduce cattle and beef imports to 10 per cent of domestic beef consumption, from a peak of 39 per cent in 2010. Since 2010 Indonesia has pursued this goal by limiting imports through trade restrictions that have resulted in significant upward pressure on prices. Indonesian beef prices reached record highs in August 2013 around the Idul Fitri celebrations that mark the end of Ramadan.

Extent of price increases

After Indonesia adopted trade restrictions, beef prices rose by as much as 150 per cent for some prime cuts of beef. In the Kebayoran Lama wet market in South Jakarta, the largest increase in price was for sirloin beef, from around 60 000 rupiah (A$6.02) per kilogram in May 2010 to around 141 000 rupiah (A$14.15) per kilogram in August 2013. The price of frozen Australian sirloin beef rose more than sirloin beef from local cattle largely reflecting the declining availability of Australian beef in Indonesian markets.

Sirloin beef prices, Kebayoran Lama wet market, Indonesia

Declining cattle herd

According to Indonesia's 2013 agricultural census, the Indonesian cattle herd (buffalo, beef and dairy cattle) declined by 15 per cent from 16.7 million head in 2011 to 14.2 million head as at May 2013. The decline reflects the continual slaughter of cattle (including breeding stock) for meat, as producers liquidate their herds to take advantage of the high beef prices.


Cattle population, Indonesia

Note: Cattle population includes buffalo, beef and dairy cattle. Data not available for 2012.Source: Indonesian Central Bureau of Statistics

Indonesian beef supply

Recent liquidation of the Indonesian cattle herd has led to a 12 per cent increase in beef production from local cattle, from 411 000 tonnes in 2011 to 459 000 tonnes in 2012. However, this rise in production from local cattle has not been enough to offset Indonesia's declining supply of imported beef and meat from imported cattle.

Net beef supply, Indonesia

Source: ABARES (live cattle imports meat equivalent); Indonesian Central Bureau of Statistics (beef imports); Indonesian Directorate General of Livestock and Animal Health Services (production)

Imported beef and beef from cattle imports fell by 58 per cent from 234 000 tonnes in 2009 to 98 000 tonnes in 2012 because of Indonesian trade restrictions adopted in 2010. In 2013 the Indonesian Government further reduced the import quota by 16 000 head to 267 000 head for cattle and by 9000 tonnes to 32 000 tonnes for beef, although there are indications there may be an increase of import permits for an additional 25 000 head of


cattle. The Indonesian Government also permitted Bulog to import 3000 tonnes of beef exempt from the quota.

Reference price mechanism

In September 2013 the Indonesian Trade Minister and Agriculture Minister jointly announced that the Indonesian Government will disband the import quota system for cattle and beef and move to a reference price mechanism for imports aimed at stabilising domestic beef prices.

The Indonesian Government intends to issue permits for cattle and beef imports when the Indonesian beef price for secondary cuts exceeds the reference price of 76 000 rupiah (A$7.60) per kilogram by 15 per cent and restrict imports when the price is 5 per cent below the reference price. Permits will be issued quarterly and be valid for three months.

Indonesian trade restrictions for cattle and beef imports

Year Trade restriction

2010 350 kilogram weight restriction imposed on cattle importsImport permits for cattle restricted with a 32 per cent decline in the number of cattle imported

2011 Cattle import quota of 500 000 head adoptedBeef import quota of 72 000 tonnes adopted

2012 Cattle import quota reduced to 283 000 headBeef import quota reduced to 34 000 tonnes and then increased to 41 000 tonnes in the second half of the year

2013 Cattle import quota reduced further to 267 000 headBeef import quota reduced further to 32 000 tonnesIndonesian trading enterprise Bulog permitted to import additional 3000 tonnes of beefAdditional import permits issued for 25 000 head of slaughter-ready cattleReference price mechanism adopted (September)


Sheep meat and woolKelly Chow

The Australian weighted average saleyard price of lamb is forecast to increase by 15 per cent in 2013-14 to average 445 cents a kilogram, following a 20 per cent decline in 2012-13. The effects of lower lamb supplies, a weaker Australian dollar and growing demand from key export markets are expected to place upward pressure on lamb prices over the remainder of the year. However, at this forecast level, lamb prices will be around 3 per cent below the average over the 10 years to 2012-13 (460 cents a kilogram in 2013-14 dollars).

The weighted average saleyard price of sheep is forecast to rise by 28 per cent in 2013-14 to 240 cents a kilogram. An expected fall in sheep turn-off, combined with continuing growth in demand from the Middle East and China for mutton and a weaker Australian dollar are expected to provide support for sheep prices in the short term. This price forecast follows a 43 per cent fall in 2012-13, when sheep prices averaged around 187 cents, the lowest in five years in real terms.

Australian lamb, sheep and wool prices

f ABARES forecast.

In 2013-14 the Australian Eastern Market Indicator price for wool is forecast to average 1100 cents a kilogram clean, around 6 per cent higher than the 2012-13 average of 1035 cents a kilogram. An expected fall in wool production combined with an assumed lower Australian dollar is likely to provide support for wool prices in 2013-14, along with continuing firm demand from China.

Australian sheep flock to rise

Above average seasonal conditions in 2011-12 resulted in the Australian sheep flock expanding by 2 per cent to around 74.7 million head, largely driven by a 7 per cent increase in breeding ewes. Sheep numbers rose in all states except for Queensland and South Australia. Sheep numbers rose by 5 per cent to around 15.9 million head in


Victoria. In New South Wales and Western Australia sheep numbers rose by around 3 per cent to 27.6 million and 14.4 million head, respectively.

The effects of below average rainfall throughout 2012-13 in the main sheep producing regions of Australia forced producers to reduce sheep numbers in order to manage limited feed and water supplies. Increased sheep and lamb slaughter is estimated to have contributed to a fall in sheep numbers to around 73.8 million head by the end of 2012-13. The Australian sheep flock in 2013-14 is forecast to rise slightly to 74.4 million head, reflecting an expected return to favourable seasonal conditions.

Australian sheep flock

f ABARES forecast.

Production

Lamb slaughter to fall

In 2013-14 lamb slaughter is forecast to fall to around 19.6 million head, following lamb slaughter of around 21.1 million head in 2012-13, the highest since 1971-72. This forecast reflects a smaller breeding flock and lower lambing percentages as below average seasonal conditions in 2012-13 resulted in lower ewe joining rates. Lamb production is forecast to fall by around 7 per cent in 2013-14 to 427 000 tonnes. Lamb carcass weight is forecast to be slightly higher than the previous season, averaging 21.8 kilograms in 2013-14.

Dry seasonal conditions in 2012-13 resulted in an increase in lamb turn-off at lighter weights. On average, national lamb carcass weights fell by around 3 per cent from 22.2 kilograms in 2011-12 to 21.6 kilograms in 2012-13. The largest fall occurred in Tasmania, by 6 per cent to average 20.5 kilograms. In other states, the decline in carcass weight ranged from around 2 per cent in Victoria (20.9 kilograms) and New South Wales (22.4 kilograms) to 3 per cent in South Australia (23.3 kilograms), Queensland (21.0 kilograms) and Western Australia (20.7 kilograms).


Australian average lamb carcass weight by state

Lower mutton production

A smaller opening sheep inventory, combined with an expected fall in sheep slaughter rates as producers hold on to stock, is forecast to result in sheep slaughter falling by 23 per cent in 2013-14 to around 6.3 million head. Mutton production is forecast to fall by around 20 per cent in 2013-14 to 146 000 tonnes. The fall in slaughter numbers is expected to be partially offset by a higher average sheep carcass weight of around 23.0 kilograms in 2013-14, up from 22.4 kilograms in 2012-13.

In 2012-13 sheep turn-off rose by 58 per cent to 8.2 million head, much higher than the 5.2 million head in 2011-12, reflecting hot dry conditions during summer and below average rainfall in autumn. On average, total sheep slaughter rose by around 86 per cent in the first half of 2013 compared with the same period in 2012. New South Wales accounted for 36 per cent of the increased slaughter of 3 million sheep, Victoria (23 per cent), Western Australia (23 per cent) and South Australia (12 per cent).

Lower average wool cut and wool production

In 2013-14 Australian shorn wool production is forecast to decline by around 1 per cent to 348 000 tonnes. This reduction reflects lower average wool cut at around 4.23 kilograms per head, down from 4.32 kilograms per head in 2012-13.

According to Australian Wool Testing Authority key test data, the number of bales of wool tested that were less than 17.5 microns rose by 31 per cent in 2012-13 to 35 163 bales. In comparison, the quantity of wool bales tested that were medium to strong wools (21.6 micron and stronger) declined by 9496 bales, or 8 per cent.


Australian wool micron profile

Exports

Lamb export earnings to be maintained

In 2013-14 Australian exports of lamb are forecast to decrease by 11 per cent to around 179 000 tonnes shipped weight after reaching a record high of201 000 tonnes in 2012-13. While the volume of Australia lamb exports is forecast to be lower, emerging markets in the Middle East and China are expected to account for an increasing share. The value of Australian lamb exports is forecast to remain largely unchanged in 2013-14 at around $1.1 billion due to expected higher export prices.

Lamb exports increased by around 79 per cent over the past 10 years, from 112 000 tonnes shipped weight in 2003-04 to more than 200 000 tonnes shipped weight in 2012-13. Over that period, the share of Australian lamb exports destined for the Middle East grew from 8 per cent to 29 per cent, while China's share rose from 8 per cent to 17 per cent.


Australian lamb exports by destination

Higher returns for mutton exports

Australian exports of mutton are forecast to fall by around 18 per cent in 2013-14 to 118 000 tonnes shipped weight, reflecting lower sheep supplies. The value of mutton exports is forecast to increase by 10 per cent in 2013-14 to around $525 million dollars. In addition to forecast lower mutton supplies, the weaker Australian dollar is expected to place upward pressure on export prices. Mutton exports to the Middle East and China are expected to remain strong, with China accounting for an increasing share of Australian mutton exports.

Wool exports to fall marginally

Total Australian wool exports are forecast to decline by around 3 per cent in 2013-14 to around 423 000 tonnes greasy, reflecting the forecast fall in wool production. This follows a 9 per cent increase in Australian wool exports in 2012-13 to 442 000 tonnes. The value of Australian wool exports are forecast to decline by around 1 per cent in 2013-14 to $2.8 billion, with expected higher export unit returns not sufficient to offset lower volumes exported. China is expected to remain the largest buyer of Australian wool, accounting for more than 75 per cent of Australian wool exports (greasy equivalent) in 2013-14.

Wool exports to China

Australian wool exports have declined over the past two decades, reflecting the gradual decline in total sheep numbers and increasing shift toward sheep meat production. Between 2000-01 and 2012-13 wool exports declined by around 50 per cent to 438 000 tonnes greasy.

The destination for wool exports from Australia has shifted over time, reflecting relocation of wool processing facilities from relatively high labour cost regions such as Western Europe to lower labour cost countries, especially China. This has led to a significant reduction of Australian wool exports to traditional markets such as the European Union, Japan, Taiwan and the Republic of Korea. Between 2000-01 and 2012-13 the share of wool exports destined for the European Union declined from 32 per cent to 8 per cent,


while wool exports destined for Japan, Taiwan and the Republic of Korea together fell to around 4 per cent of total Australian wool exports.

Australian wool exports by destination

By contrast, China's share of Australian wool exports has grown from 37 per cent in 2000-01 to 78 per cent in 2012-13. Over this period, wool types exported to China have shifted from coarser to finer wool. In 2000-01 superfine wool of 19 microns and finer accounted for 9 per cent of China's imports of Australian wool. By 2012-13 this share had more than tripled to 34 per cent. China's imports of Australian mid-micron (20 microns to 27 microns) wool declined on a share basis from 66 per cent to 37 per cent over the same period.

Sheep meat and wool outlook


Sheep numbers a million 75 74 74 0.0

Sheep shorn million 83 82 82 0.0


SlaughteringsCategory unit 2011-12 2012-13 s 2013-14 f % change

Sheep '000 5 175 8 192 6 343 - 22.6

Lamb '000 18 879 21 122 19 603 - 7.2

Production bCategory unit 2011-12 2012-13 s 2013-14 f % change

Mutton kt 120 183 146 - 20.2

Lamb kt 419 457 427 - 6.6

Wool production (greasy) - shorn kt 362 353 345 - 2.3

Wool production (greasy) - other c kt 49 75 66 -12.0

Wool production (greasy) - total kt 411 427 411 - 3.7

ExportsCategory unit 2011-12 2012-13 s 2013-14 f % change

Mutton kt swt 89 144 118 -18.1

Lamb kt swt 174 201 179 -10.9

- to United States kt swt 35 37 34 - 8.1

Total sheep meat kt swt 263 344 298 -13.4

- value $m 1 422 1 564 1 638 4.7

Wool - volume (gr. equiv.) kt 405 442 423 - 4.3

Wool - to China kt 306 342 329 - 3.8

Wool - value d $m 3 123 2 862 2 826 -1.3

PricesCategory unit 2011-12 2012-13 s 2013-14 f % change

Sheep e Ac/kg 330 187 240 28.3

Lamb e Ac/kg 480 386 445 15.3

Eastern Market Indicator g Ac/kg 1 203 1 035 1 100 6.3

a At 30 June. b Carcass weight. c Includes wool on sheepskins, fellmongered and slipe wool. d Balance of payments basis. e Saleyard prices. f ABARES forecast. g Clean equivalent. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Australian Wool Exchange


Pig meatClay Mifsud

The weighted average over-the-hooks price of pigs is forecast to increase by 5 per cent in 2013-14 to 300 cents a kilogram (dressed weight), due to the lower Australian dollar increasing import and export competitiveness. Domestic feed grain prices, which account for more than 50 per cent of production costs, are forecast to fall and will also help profitability for pig producers. This reflects lower world prices because of higher production in the northern hemisphere.

Australian pig meat production and weighted average price

f ABARES forecast.

Production to rise

In 2013-14 Australian pig meat production is forecast to increase by 2 per cent to 362 000 tonnes. Forecast lower prices of feed grains is expected to support greater retention of breeding sows and an increase in overall pig numbers as returns from production increase. The pig-to-wheat and pig-to-barley price ratios—indicators of returns from pig production—are expected to rise over the remainder of 2013-14.

In 2012-13 Australian pig meat production increased by 1.5 per cent to 356 000 tonnes, reflecting growth in average slaughter weights. The average pig slaughter weight increased by more than 1 per cent to a record 75 kilograms, while the number of pigs slaughtered rose slightly from the previous year.


Australian pig-to-feed price ratios, quarterly, ended June 2013

Lower imports in 2013-14

Imports of pig meat in Australia increased three-fold over the 10 years to 2012-13, resulting in greater competition for manufacturers of Australian ham, bacon and smallgoods. Australia's import policy for pig meat allows cooked and uncooked (for cooking upon arrival in Australia) deboned pig meat to be imported from approved countries subject to specific import conditions. Because of quarantine restrictions, all fresh pig meat sold in Australia is domestically produced.

Australian pig meat imports increased year-on-year by 7 per cent in 2012-13 to 152 000 tonnes (shipped weight). Imports from the United States—the largest supplier—increased by 6 per cent to 62 000 tonnes, as lower US pig prices and a higher Australian dollar made US pig meat increasingly competitive compared with Australian pig meat in the processed pig meat market. The higher Australian dollar also contributed to growth in imports from Denmark and the Netherlands. The share of imports in Australian pig meat consumption rose by 1 percentage point to 49 per cent in 2012-13.


Australian pig meat consumption

f ABARES forecast.

In 2013-14 Australian pig meat imports are forecast to fall by 3 per cent to 147 000 tonnes (shipped weight), reflecting a decline in the competitiveness of imports in the domestic processed pig meat market. The Australian dollar is assumed to average lower, making imports from North America and the European Union— where more than 98 per cent of Australia's imports are sourced—more expensive in Australian dollar terms.

Australian pig meat imports

f ABARES forecast.

Exports to rise slightly in 2013-14

Australian pig meat exports fell by 11 per cent in 2012-13 to 26 000 tonnes (shipped weight), the lowest since 1998-99, reflecting increased competition in export destinations from other pig meat exporters. Shipments to Singapore—Australia's largest export


market for pig meat—fell by 14 per cent to 9000 tonnes as Singaporean imports of pig meat from the Netherlands and live pigs from Indonesia increased. Australian exports to most other markets in the Asia-Pacific region, including Papua New Guinea, Hong Kong and Malaysia, also declined in 2012-13.

Australian pig meat exports are forecast to increase by 3 per cent in 2013-14 to around 27 000 tonnes (shipped weight), with Singapore and New Zealand expected to remain the largest markets. The lower Australian dollar is likely to make Australian pig meat more price competitive in export markets. However, pig meat exports are forecast to remain low relative to the 10-year average to 2012-13 of 37 000 tonnes.

Australian pig meat exports

f ABARES forecast.

Pig meat outlook


Over-the-hooks price a Ac/kg 281 285 300 5.1

Slaughterings '000 4 733 4 745 4 830 1.8

Production kt 351 356 362 1.8

Import volume b kt 142 152 147 - 3.3

Export volume bc kt 29 26 27 2.7

Export value $m 100 81 83 1.7

a Dressed weight. b Shipped weight. c Excludes preserved pig meat. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics


Chicken meatClay Mifsud

Australian chicken meat production is forecast to increase by 2 per cent in 2013-14 to almost 1.1 million tonnes in response to higher prices driven by strong consumer demand. Despite forecast increased chicken meat prices, their relativity to considerably higher beef, sheep meat and pig meat prices is expected to continue to support growth in consumer demand.

In 2012-13 Australian chicken meat production increased by 2 per cent to 1.05 million tonnes. Higher production over the past year reflects a 2 per cent increase in the number of birds slaughtered to 563 million head, as the meat yield per bird remained steady at an average of 1.9 kilograms.

Domestic consumption of chicken meat is forecast to be around 44 kilograms per person in 2013-14, 1 per cent higher than in 2012-13. Disparity in retail prices between chicken and other meats has contributed to Australian per person chicken meat consumption increasing by 80 per cent over 20 years to 2012-13, to be among the highest in the OECD.

The chicken meat industry in Australia is highly vertically integrated; two privately owned companies supply around 70 per cent of meat chickens for slaughter. Five privately owned medium sized processors and a number of smaller processors supply the remaining 30 per cent. About 80 per cent of all meat chickens are produced under contract—processors supply day-old chicks and rearing specifications—and the remaining 20 per cent are grown on company farms.

About 96 per cent of Australian chicken meat production is consumed domestically and the remainder is exported. In 2012-13 Australian chicken meat exports fell 13 per cent to 29 000 tonnes (shipped weight) reflecting temporary bans placed on imports of Australian poultry after avian influenza (H7N7) was detected in New South Wales. In 2013-14 Australian chicken meat exports are forecast to resume growing and are expected to reach 34 000 tonnes.


Australian chicken meat exports

f ABARES forecast.

Chicken meat imports in Australia

The Australian chicken meat industry is not under significant competition from imports. Imports of cooked chicken meat have been permitted in Australia since 1998 and fresh since 2008 but import volumes remain low relative to domestic production.

Imports of deboned cooked chicken meat were negligible until the late 2000s, with more than 80 per cent of imports sourced from New Zealand and Thailand. In 2012-13 imports of cooked chicken meat increased by 25 per cent to 7000 tonnes, with a value of $50 million. However, this represents around 1 per cent of Australian chicken meat consumption.

Imported cooked chicken meat must comply with the Imported Food Control Act 1992 and the Australian Food Standards Code under the National Food Authority Act 1991. Under this legislation the Department of Agriculture, Fisheries and Forestry may inspect, sample, hold and test imported cooked chicken meat for microbial agents or residues of public health concern. The chickens from which the cooked chicken meat is produced must originate from the country of export. The meat must be cooked at high temperature for at least 125 minutes to ensure eradication of pests or bacteria. Chicken meat for export to Australia must be processed and stored separately from all other meat processed in the same facility.


Australian cooked chicken meat imports

In 2008 Australia's Director of Animal and Plant Quarantine made a policy determination establishing quarantine requirements for importation of fresh chicken meat, based on a generic import risk analysis report. The import risk analysis recommended that imports of chicken meat be permitted subject to quarantine conditions for nine disease agents of quarantine concern, including notifiable avian influenza, Newcastle disease and infectious bursal disease. At July 2013 less than 300 tonnes of fresh chicken meat had been imported.

Chicken meat outlook


Production kt 1 030 1 046 1 070 2.3

Export volume a kt 33.6 29.3 34.0 16.0

Export value $m 39.7 39.4 44.0 11.7

a Shipped weight. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics


DairyDavid Barrett and Caitlin Murray

World dairy product prices rose in March and April 2013 largely in response to lower milk production in key dairy exporting countries and continuing firm import demand. World dairy prices eased again in the period May to July 2013 but remained well above prices prevailing in mid 2012.

Despite forecast higher global milk production, world dairy product prices are forecast to average slightly higher in 2013-14 driven by continuing firm growth in import demand, particularly from the developing countries of Asia. World trade was strong in the first half of 2013 driven by higher imports by China, the Russian Federation and the developing countries of Asia, the Middle East and North Africa.

Overall, world dairy product prices are forecast to rise by around 3 per cent in 2013-14. World prices for whole milk powder, skim milk powder, butter and cheese are forecast to average US$3950 a tonne, US$3850 a tonne, US$3850 a tonne and US$4260 a tonne, respectively in 2013-14.

World dairy prices

Major dairy exporters to increase production

Assuming average seasonal conditions in the remainder of 2013-14, milk production in the major dairy producing and exporting countries is expected to increase in 2013-14 as a result of forecast higher farmgate milk prices and lower feed grain prices.

European Union

EU milk production is forecast to rise by 1 per cent in the 2013-14 marketing year (April to March) despite cool and wet conditions constraining growth in EU milk output in the first quarter of the marketing year. Forecast higher EU farmgate milk prices, lower feed


costs and improved availability of forage are expected to lead to an increase in milk production in the European Union in 2013-14.

Average farmgate milk prices in the European Union were around 10 per cent higher year-on-year in May 2013. This reflected increases in EU wholesale prices for most dairy products in the 12 months to May 2013.

In 2012-13 EU milk production declined by around 1 per cent, reflecting relatively low farmgate milk prices, high feed costs and below average seasonal conditions in many EU member countries. Milk production fell in France (by 2 per cent year-on-year), Italy (4 per cent), the United Kingdom (4 per cent) and Ireland (4 per cent). Milk production in Germany and Poland increased by 0.5 per cent and 3 per cent over the same period.

EU consumption of dairy products is expected to remain subdued in 2013-14 reflecting assumed continuing weak economic activity and high unemployment in many EU countries. Given these expected developments in consumption, much of the forecast higher dairy product production, in particular cheese and butter, is likely to be exported.

EU milk production, selected countries, year-on-year change, 2012-13

United States

Milk production in the United States is forecast to increase by 1 per cent in 2014 to 93 million tonnes following a forecast similar rise in 2013. Forecast lower feed grain prices are expected to lead to an increase in the milk-to-feed price ratio and improved profitability in the dairy sector. As a result, US dairy farmers are expected to commence herd rebuilding. This, together with continued gains in milk yields, is expected to lead to higher milk production, particularly in the first half of 2014.

US commercial stocks of dairy products in mid 2013 were significantly higher than a year ago, largely reflecting subdued US domestic demand for dairy products. These higher stocks, combined with forecast higher dairy product production and strong export demand are expected to lead to a rise in exports in 2013. US exports of skim milk powder are forecast to rise by around 15 per cent to 515 000 tonnes in 2013 while US cheese exports are forecast to increase by 11 per cent to around 290 000 tonnes.


US skim milk powder exports, by destination

New Zealand

Milk production in New Zealand is forecast to increase by around 3 per cent in 2013-14 (June to May) following a 3 per cent fall in production in 2012-13. Significant rainfall in the main dairying regions of New Zealand between May and August 2013 improved pasture conditions considerably following drought in the North Island during the first three months of 2013.

While dairy farmers in the North Island increased culling of cows during the second half of 2012-13, forecast higher farmgate milk prices and improved seasonal conditions are expected to lead to a modest rebuilding of cow numbers during 2013-14. An increase in the dairy herd is expected in the South Island in 2013-14 as further beef farms convert to dairying.

New Zealand exports of dairy products, particularly milk powders, are forecast to rise in 2013-14 in response to strong export demand from China, South-East Asia, the Middle East and North Africa.


New Zealand dairy cows

South America

Assuming favourable seasonal conditions, milk production in Brazil and Argentina is forecast to rise by around 3 per cent in 2013-14. In the first half of 2013 milk production in Argentina was affected by adverse seasonal conditions and, as a result, dairy exports from Argentina fell sharply during this period. Forecast higher production, limited growth in domestic consumption and firm export demand is expected to lead to an increase in Argentine dairy exports, particularly whole milk powder, in 2013-14.

Growth in global import demand

A strengthening of economic growth through 2013-14 in the developing countries of Asia, the Middle East and North Africa is expected to underpin increased trade in dairy products.

China is expected to remain the largest global importer of milk powders. Imports of whole milk powder are forecast to rise by aroud 20 per cent to 500 000 tonnes in 2013. Despite relatively high world prices for whole milk powder, Chinese imports were around 50 per cent higher in the first six months of 2013 compared with the same period in 2012. Over the past four years Chinese imports of milk powders have risen significantly in response to increasing demand for infant formula powder and consumer concerns about the safety of domestically produced product. New Zealand supplied around 96 per cent of Chinese imports of whole milk powder in 2012.

New Zealand exported 104 000 tonnes of whey products in 2012 of which 11 400 tonnes were exported to China. In early August 2013 China imposed a temporary ban on import of Fonterra's whey powder and dairy base powder (an ingredient used in manufacture of infant formula) from New Zealand, after Fonterra recalled product because it had been contaminated by the potentially dangerous bacteria Clostridium botulinum. Whey powder product had also been exported to Australia, Malaysia, Vietnam, Thailand and Saudi Arabia. However, on 30 August New Zealand's Ministry for Primary Industries confirmed that further test results showed the bacteria present to be Clostridium sporogenes, which poses no direct health risks to consumers but if in high enough concentrations may result in food spoilage.


China whole milk powder

f ABARES forecast.

South-East Asia's import demand for milk powders is forecast to remain firm in 2013 reflecting modest economic growth in most countries in the region. Consumption of dairy products has been steadily rising in recent years driven by increasing incomes, greater access to refrigeration and emergence of supermarkets in urban centres. Limited domestic milk production means most countries in this region rely on imports to meet growth in domestic demand. Indonesia and the Philippines are expected to import around 215 000 tonnes and 110 000 tonnes, respectively, of skim milk powder in 2013.

Exports of skim milk powder from the European Union to the Middle East and North Africa are forecast to fall by around 20 per cent in 2013 as a result of lower EU domestic production. With continued strong demand for milk powders in this region, exports of milk powders from other countries, such as the United States, are expected to increase. Algeria is expected to remain a large regional importer of milk powders with imports of whole milk powder forecast to increase by around 5 per cent to 185 000 tonnes in 2013.

After rising strongly in 2011 and 2012 Mexican imports of skim milk powder are forecast to level off in 2013 at around 230 000 tonnes; the United States is expected to supply just under 90 per cent of its imports. Cheese imports by Mexico are expected to rise by around 3 per cent to 92 000 tonnes in 2013 reflecting further growth in consumer demand.

Reflecting relatively firm domestic demand for dairy products in the Russian Federation, imports of cheese and butter are forecast to rise slightly to 360 000 tonnes and 130 000 tonnes, respectively, in 2013. Milk production in the Russian Federation fell in 2012-13 as farmers reduced their dairy herds in response to relatively high feed costs and, as a result, dairy production declined. Japanese imports of cheese are forecast to rise by around 2 per cent to 240 000 tonnes in 2013 following record imports of cheese in 2012. This reflects continuing firm Japanese demand for cheese in the retail, convenience and food service sectors.

Australian dairy industry

The Australian farmgate milk price is forecast to increase by 18 per cent in 2013-14 to average around 46 cents a litre, reflecting higher world dairy product prices and an


assumed depreciation of the Australian dollar. Such a price outcome would be 6 per cent higher than the average real price of 43.3 cents a litre for the three years to 2012-13.

Opening prices for manufacturing milk in 2013-14 were set around 24 per cent higher by dairy processors in Victoria at around 42 cents a litre.

Australian milk production is forecast to increase by 2 per cent in 2013-14 to 9.4 billion litres. With only a marginal increase in the dairy herd forecast, the growth in production reflects expected higher yields following a return to favourable seasonal conditions. Grain and fodder accounts for around 25 per cent of dairy farmers' cash costs so forecast lower supplementary feed prices are also expected to result in increased feeding of supplements and higher average milk yields in 2013-14.

Milk production in Victoria, which accounts for around two-thirds of Australia's production, is forecast to increase in 2013-14 largely reflecting improved seasonal conditions, continuing availability of irrigation water and forecast lower grain prices. Victorian production declined by 3 per cent to 6 billion litres in 2012-13, with lower production in the eastern and western dairying regions of the state because of dry seasonal conditions. In northern Victoria, where production is most reliant on irrigation water, production increased by 3 per cent in 2012-13.

Australian milk production and dairy cows

f ABARES forecast.

Australian exports

The total value of Australian dairy exports is forecast to increase by 15 per cent to $2.6 billion in 2013-14. This largely reflects the effect of forecast higher average dairy product prices on world markets and an assumed depreciation of the Australian dollar.

The volume of cheese exports is forecast to increase by close to 1 per cent to 176 000 tonnes in 2013-14. Skim milk and whole milk powder exports are also forecast to increase by 3 per cent and 2 per cent to 152 000 tonnes and 89 000 tonnes, respectively. Australian exporters are likely to face increased competition in key Asian markets, particularly in the second half of 2013-14, as a result of forecast higher export availability of dairy products from New Zealand, the European Union and the United States.


Dairy/ outlook

AustraliaCategory unit 2011-12 2012-13 s 2013-14 f % change

Cow numbers a '000 1 700 1 690 1 695 0.3

Milk yields L/cow 5 577 5 444 5 546 1.9

ProductionCategory unit 2011-12 2012-13 s 2013-14 f % change

Total milk ML 9 480 9 200 9 400 2.2

- market sales ML 2 389 2 450 2 500 2.0

- manufacturing ML 7 092 6 750 6 900 2.2

Butter b kt 120 118 120 1.7

Cheese kt 340 331 342 3.3

Whole milk powder kt 140 109 112 2.8

Skim milk powder kt 230 224 230 2.7

Farmgate milk price Ac/L 42.1 39.0 46.0 17.9

Value of exports A$m 2 292 2 229 2 562 14.9

World pricesCategory unit 2011-12 2012-13 s 2013-14 f % change

Butter US$/t 3 883 3 727 3 850 3.3

Cheese US$/t 4 258 4 150 4 260 2.7

Skim milk powder US$/t 3 233 3 731 3 850 3.2

Whole milk powder US$/t 3 431 3 831 3 950 3.1

a At 30 June. b Includes the butter equivalent of butteroil, butter concentrate, ghee and dry butterfat. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Dairy Australia


Farm debt: farm level analysisPeter Martin

According to Reserve Bank of Australia data, total bank lending to the rural sector declined (in real terms) from $63.4 billion at 30 June 2009 to $58.6 billion at 31 March 2013.

Average debt per farm business more than doubled (in real terms) for broadacre and dairy farms between 1999-2000 and 2009-10, but has since declined slightly due to a reduction in new borrowing and continued debt repayments.

Increases in farm debt over the past 15 years are due to rapid expansion in borrowing for on-farm investment, particularly land purchase, and to finance ongoing working capital requirements. Rates of principal repayment have also slowed.

Much of the aggregate broadacre and dairy sector debt is held by a relatively small proportion of mostly large farms, especially in Western Australia (for both broadacre and dairy), Northern Territory (broadacre), Tasmania (dairy) and South Australia (dairy).

The average proportion of farm receipts consumed by interest payment remains relatively high compared with previous years, land values have declined in some regions and institutions have tightened lending.

Family farms in Australia rely on high farm equity to provide the reserve capacity to borrow to meet cashflow needs during periods of reduced farm income. Prolonged reduction in equity and debt servicing capacity raises the financial risk for these farm businesses.

Change in aggregate farm debtDebt is an important source of funds for farmers. It is used for a range of purposes, including purchasing land, new plant and equipment and ongoing working capital. Farm business debt has increased substantially in recent years and net farm incomes have become sensitive to changes in interest rates.

Total rural indebtedness to institutional lenders increased (in real terms) from $32.2 billion to $68.5 billion (213 per cent) in the decade to June 2009. Over the same period, the level of rural debt as a share of the gross value of rural production increased from 65 per cent to 122 per cent.

At 30 June 2012 total rural indebtedness to institutional lenders (including finance companies, pastoral companies, insurance companies and government) was $63.6 billion—of this, banks were owed 92 per cent ($59.7 billion).


Bank lending to agriculture, fishing and forestry sectors

Source: Reserve Bank of Australia

Since 2008-09 aggregate bank lending to the rural sector has declined (in real terms) as financial institutions tighten new lending and some farms reduce debt. According to Reserve Bank of Australia data, total bank lending to the rural sector declined (in real terms) from $63.4 billion at 30 June 2009 to $58.6 billion at 31 March 2013.

Farm business debt in Australia has been the subject of discussion in the past year, including the Rural Finance Roundtable held in October 2012. Discussion has centred on aggregate debt statistics. However, such analysis masks variation in the experiences of individual borrowers.

Trends in average debt per farmThis analysis draws on data from the ABARES annual survey of broadacre and dairy farms, the Australian Agricultural and Grazing Industries Survey (AAGIS) and the Australian Dairy Industry Survey (ADIS). These surveys target farm businesses with an estimated value of agricultural operations exceeding $40 000, which effectively excludes small lifestyle farms from survey coverage. Broadacre industries ABARES surveyed include farms that mainly rely on grains, oilseeds and pulses or run sheep or beef cattle. The detailed physical, financial and management information collected in these surveys includes individual debt each farm business held, the opening and closing balance for the year, type of debt, principal use of borrowed funds and reason for the increase or decrease in the principal owing. The broadacre industries and dairy industries together account for 65 per cent of commercial-scale Australian farm businesses (ABARES 2013).

Average debt per farm business more than doubled (in real terms) for both broadacre and dairy farms between 1999-2000 and 2009-10.

Since 2009-10 average debt per farm business is estimated to have declined slightly for both broadacre and dairy farms (in real terms) due to reduced new borrowing and continued repayment of debt.

Interest rates farmers paid were high in the early 1990s but declined through the mid and late 1990s. Lower interest rates and increased lending fuelled a boom in land prices,


raising farm equity (net wealth) and inducing lenders to provide more finance. This was despite an increase in the variability of farm incomes and no trend increase in farm profitability. Rising land values has meant that equity relative to debt has remained relatively stable despite the large increase in debt .In addition, debt servicing was supported by interest subsidies to farmers in drought through the exceptional circumstances arrangements. For many regions this assistance was sustained for most of the 2000s.

Interest rate paid, average for broadacre and dairy farms

p ABARES preliminary estimate.Source: AAGIS; ADIS

Broadacre farm debtBroadacre debt increased in real terms from an average of $266 000 per farm in 2000-01 to $546 000 per farm in 2009-10. The largest contribution to this increase in average broadacre farm debt was borrowing to fund new on-farm investment—particularly purchase of land, machinery and vehicles—and to develop land and farm improvements. Debt to fund land purchase accounts for the largest share of debt, an estimated 44 per cent of average debt for broadacre farms in 2011-12.


Broadacre farm debt, average per farm

p ABARES preliminary estimate.Source: AAGIS

Most increases in average debt during the 2000s were in step with increases in land values. As broadacre farmers' equity increased with rising land prices, debt increased with it. In some regions this continued until the correction in land values after 2009. The regions most affected were those with the largest increase in land values in the decade to June 2009 and a high incidence of low farm cash incomes in recent years. These include pastoral regions of northern Australia and the eastern and northern wheat belts of Western Australia, south-western Victoria and south-eastern South Australia. Equity of broadacre farmers in these regions has shrunk as land values have declined.

Net investment in plant, vehicles, machinery and farm infrastructure for broadacre farms has been high for the decade ending 2011-12. Borrowing to finance purchase of vehicles, machinery and plant rose by 150 per cent (in real terms) between 1999-2000 and 2011-12.

Structural adjustment during this period resulted in broadacre farmers changing the mix of commodities produced and increasing farm size. An increase in the average size of farm enterprises resulted in higher borrowing for ongoing working capital. Around 25 per cent of the increase in average broadacre farm debt during the 2000s can be attributed to an increase in the average scale of farm enterprises on broadacre farms.

Movement away from less input-intensive wool production into more intensive cropping, changes in grain payment methods and movement to more intensive production technologies involving greater use of purchased inputs—such as herbicides—have also contributed to increased working capital debt.

In addition, borrowing to meet working capital requirements increased for producers during the 2000s as drought in many regions reduced farm cash incomes. These increases were particularly large in 2006-07—the year in which farm cash incomes were reduced most by drought. Working capital debt accounted for 35 per cent of average farm debt for broadacre farms in 2011-12.


Overall, the increase in average debt for on-farm investment and working capital has been similar—an increase of 235 per cent (in real terms) between 1999-2000 and 2011-12.

Debt per sheep equivalent a, average by broadacre industry

a Measure of the scale of farm operations expressed in sheep equivalents. p ABARES preliminary estimate.Source: AAGIS

Relative to the change in the size of farm enterprises (expressed in sheep equivalents), increase in average debt has been largest for the beef industry. The increase in beef industry debt over the decade to June 2009 mainly funded land purchase, particularly in northern Australia (ABARES 2013).

Debt is estimated to have declined slightly for beef and sheep industry farms since 2009-10 and on average to have remained steady for grains industry farms.

Dairy farm debtAverage dairy farm debt increased in real terms from $345 000 per farm in 2000-01 to $747 000 per farm in 2009-10. Much of this increase was due to a rapid expansion in average farm size. An increase in average debt per farm would probably have occurred as a result of the exit of small farms from the industry even without additional borrowing. Many of the small farms had little or no debt and their exit from the industry raised the average debt for the remaining farms.


Dairy farm debt, average per farm

p ABARES preliminary estimate.Source: ADIS

Borrowing has increased for land purchase, in particular, and for on-farm investment. Demand for ongoing working capital has also risen with increases in average herd size and mechanisation and intensification of dairy enterprises.

The increase in average debt per farm, over time, appears large. However, it is modest relative to increase in size of the average dairy herd or the average number of litres of milk produced per farm (a measure of capacity to generate income to service debt). Average debt per litre of milk produced increased by 19 per cent (in real terms) between 1998-99 and 2011-12.

Change in farm business debt, dairy farms Australia

y ABARES provisional estimate.Source: ADIS


Principal repaymentThe annual change in average farm business debt is the balance between the amount of principal repaid over the year and the increase in principal owed (new borrowing). The increase in average farm debt during the 2000s is due to increased borrowing and reduced rate of principal repayment.

The rise in use of interest-only loans has contributed to the increase in farm debt. The proportion of principal outstanding that is repaid annually declined through the 2000s. The lower rate of principal repayment may partly be due to the inability of farm businesses to make larger principal repayments, constrained by low farm cash incomes through the 2000s drought. However, over the longer term the proportion of farm businesses paying only interest on at least a part of their farm debt has steadily increased.

Change in farm business debt and equity, broadacre farms Australia

p ABARES preliminary estimate.Source: AAGIS


Change in farm business debt and equity, dairy farms Australia

p ABARES preliminary estimate.Source: ADIS

Farm equityOn average, farm business equity remains strong for broadacre farms. The average equity ratio for broadacre farms, at 30 June 2012, was an estimated 88 per cent. In some regions farm equity is estimated to have fallen significantly over the three years ending June 2012, mainly as a consequence of reported reductions in land values. However, in other regions, farm equity has strengthened because of reduced farm debt, increased capital investment and increased livestock numbers.

At the national level, the average equity ratio for dairy farms has declined slightly since 2004-05 because debt levels have increased and land values have declined. However, the average farm equity ratio remains relatively high, averaging 80 per cent at 30 June 2012. Change in dairy farm equity ratios should be considered against the background of the increase in average farm size. Equity ratios are typically lower for larger farms because they are generally able to service larger debts.

Distribution of farms by debt and equityThe proportion of broadacre farms with relatively high debt varies across jurisdictions and industries.

Around 28 per cent of broadacre farms in Western Australia and around 32 per cent of Northern Territory farms carried in excess of $1 million in debt at 30 June 2012. The high proportion of farms with debt exceeding $1 million reflects a high proportion of larger businesses in those jurisdictions.

Around 55 per cent of Tasmanian dairy farms, 43 per cent of Western Australian dairy farms and 36 per cent of South Australian dairy farms carried in excess of $1 million in debt at 30 June 2012. The high proportion of farms with debt exceeding $1 million in these states reflects a greater number of larger businesses in those jurisdictions and a high level of new investment on large dairy farms in recent years. New investment in


large dairy operations has occurred mostly in northern Tasmania, Western Victoria and South Australia.

By contrast, around 54 per cent of broadacre farms and 21 per cent of dairy farms nationally were recorded as having less than $100 000 in debts at 30 June 2012. Many of these businesses were relatively small.

Much of the aggregate broadacre and dairy sector debt is held by a relatively small proportion of mostly larger farms. Around 70 per cent of aggregate broadacre sector debt, at 30 June 2012, was held by just 12 per cent of farms. On average, these were much larger farm businesses that in aggregate produced around 45 per cent of the total value of broadacre farm production in 2010-11 (ABARES 2013). Similarly, around 45 per cent of aggregate dairy sector debt, at 30 June 2012, was held by 10 per cent of farms.

Distribution of broadacre farms, by farm business debt and equity ratio at 30 June 2012 pa (Percentage of farms)

Farm business debt bCategory Unit New

South Wales

Victoria Queensland Western Australia

South Australia

Tasmania Northern Territory

Australia

<$100 000 % 52 (7) 63 (6) 56 (6) 41 (16) 50 (10) 70 (10) 21 (50) 54 (4)

$100 000 and <$250 000

% 16 (19) 11 (25) 11 (21) 11 (44) 10 (38) 6 (56) 16 (74) 13 (12)

$250 000 and <$500 000

% 10 (20) 11 (18) 7 (22) 12 (28) 13 (34) 6 (85) 10 (80) 10 (11)

$500 000 and <$1m

% 10 (19) 7 (18) 12 (18) 8 (38) 15 (21) 11 (32) 20 (61) 10 (10)

$1m and <$2m % 8 (20) 6 (43) 7 (17) 15 (22) 9 (27) 5 (31) 8 (60) 8 (11)

≥$2m % 5(13) 3 (21) 6 (13) 13 (14) 4 (30) 2 (29) 24 (19) 5 (7)

Total % 100 100 100 100 100 100 100 100

Average farm debt at 30 June

$'000 446 (9) 291 (20) 568 (10) 886 (10) 391 (12) 255 (15) 1 746 (27) 480 (5)

Farm business equity ratio bcCategory Unit New

South Wales


South Australia


Australia

≥90 per cent % 68 (5) 74 (5) 72 (4) 52 (13) 63 (8) 84 (4) 49 (26) 68 (3)

80 and <90 per cent

% 14 (18) 11 (25) 12 (15) 21 (28) 18 (20) 10 (34) 34 (37) 14 (10)

70 and <80 per cent

% 7 (21) 8 (27) 8 (19) 12 (23) 11 (28) 4 (33) 10 (43) 9 (11)

60 and <70 per cent

% 5(26) 5 (26) 4 (27) 8 (26) 6 (41) 2 (62) 1 (80) 5 (13)

<60 per cent % 6(31) 3 (43) 4 (34) 7 (42) 2 (79) 1 (52) 6 (69) 4 (18)

Total % 100 100 100 100 100 100 100 100


Category Unit New South Wales


South Australia


Australia

Average farm business equity ratio at 30 June

% 88 (2) 91 (1) 89 (1) 83 (2) 90 (2) 95 (1) 77 (6) 88 (1)

Population of farms no. 19 194 11 427 9 775 6 434 6 995 1 122 202 55 149a Excludes debt for large corporate farms. b Average per responding farm. c Equity ratio defined as total owned business capital at 30 June less debt as a percentage of total owned business capital. p ABARES preliminary estimates.Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.

Distribution of dairy farms, by farm business debt and equity ratio at 30 June 2012 pa (Percentage of farms)

Farm business debt bCategory Unit New

South Wales


South Australia

Tasmania Australia

<$100 000 % 30 (48) 18 (78) 49 (34) 43 (57) 14 (70) 0 (99) 21 (42)

$100 000 and <$250 000

% 16 (77) 23 (67) 20 (84) 3 (95) 14 (84) 18 (81) 21 (49)

$250 000 and <$500 000

% 16 (40) 18 (48) 8 (47) 8 (50) 15 (60) 0 (99) 15 (38)

$500 000 and <$1m

% 21 (24) 21 (19) 16 (30) 3 (90) 22 (33) 27 (47) 21 (14)

$1m and <$2m % 10 (31) 15 (31) 7 (39) 25 (42) 20 (39) 12 (57) 14 (23)

≥$2m % 7 (23) 5 (40) 0 (77) 18 (34) 16 (24) 43 (19) 8 (18)

Total % 100 100 100 100 100 100 100

Average farm debt at 30 June

$'000 647 (11) 633 (11) 273 (15) 994 (21) 1 066 (13) 1 744 (12) 702 (7)

Farm business equity ratio bcCategory Unit New

South Wales


South Australia

Tasmania Australia

≥90 per cent % 37 (43) 35 (64) 78 (21) 61 (33) 22 (51) 18 (31) 38 (33)

80 and <90 per cent

% 38 (23) 23 (36) 10 (39) 16 (32) 26 (39) 4 (59) 22 (26)

70 and <80 per cent

% 5 (42) 15 (26) 6 (59) 11 (55) 17 (55) 7 (76) 12 (22)

60 and <70 per cent

% 10 (51) 18 (44) 4 (64) 12 (75) 17 (42) 20 (41) 16 (34)

<60 per cent % 11 (31) 10 (44) 3 (66) 0 18 (36) 51 (26) 12 (25)

Total % 100 100 100 100 100 100 100

Average farm business equity ratio at 30 June

% 83 (3) 79 (3) 92 (2) 91 (3) 75 (4) 65 (6) 80 (2)


Category Unit New South Wales


South Australia

Tasmania Australia

Population of farms no. 793 4 912 588 190 315 435 7 233a Excludes debt for large corporate farms. b Average per responding farm. c Equity ratio defined as total owned business capital at 30 June less debt as a percentage of total owned business capital. p ABARES preliminary estimates.Note: Figures in parentheses are standard errors expressed as a percentage of the estimate provided.

In some regions farm equity is estimated to have fallen significantly over the three years to June 2012, mainly due to reductions in reported land values, particularly in regions where land values had previously recorded large increases. These include pastoral regions of northern Australia and the eastern and northern wheat belts of Western Australia, south-western Victoria and south-eastern South Australia. Access to further borrowing by some farms in these regions may have been restricted by lenders.

In 2011-12, 9 per cent of broadacre farms and 28 per cent of dairy farms were estimated to have equity ratios below 70 per cent. Equity ratios are typically lower for larger farms because they are generally able to service larger debts.

Trends in farm performance and debt servicingThe proportion of farm receipts needed to fund interest payments rose substantially in the decade ending 2009-10. This was due to a combination of large increases in farm debt and reduced farm receipts, as a result of extended drought conditions. Interest rate subsidies paid to farm businesses as drought assistance partially offset the increase in interest paid between 2001-02 and 2007-08.

Interest payments as a percentage of farm receipts, average per farm with debt, broadacre and dairy farms

y ABARES provisional estimate. Source: AAGIS

Higher farm receipts in 2010-11 and 2011-12 and reductions in interest rates in 2011-12 resulted in a decline in the proportion of farm receipts needed to fund interest payments. In 2012-13 the ratio of interest payments to farm receipts is estimated to have reduced further—to around 9 per cent for broadacre farms and around 8 per cent for dairy farms.


However, the proportion of farm receipts needed to meet interest payments remains high relative to the ratio in the late 1990s and early 2000s.

The option to pay interest only is sometimes necessary for a farm business, and the discretion to pay larger amounts off the principal when the business is in a position to do so provides flexibility in repayment. ABARES data suggest the rate of debt repayment may not have been as high in recent years of improved incomes as it could have been. Producers need to reduce the principal as quickly as possible, lowering the overall cost of a loan by reducing the period for which the principal is outstanding. High average farm debt has resulted in the interest component of debt servicing remaining relatively high in recent years, despite the decline in interest rates. Widespread use of interest only loans may be contributing to maintenance of higher debt levels.

Farm cash income, broadacre and dairy farms

y ABARES provisional estimate.Source: AAGIS; AGIS

Role of debt and equity in managing income variabilityFarm cash income is a measure of cash funds generated by a farm business for farm investment and consumption after paying all cash costs incurred in production, including interest payments but excluding capital payments and payments to family workers. It is a measure of short-term farm performance because it does not take into account depreciation or changes in farm inventories.

Average farm cash incomes for broadacre and dairy farms have been highly variable over the past decade. National data, such as in these figures, contain a mix of regions and industries that perform well financially in some years along with industries and regions that perform badly, depending on climatic and other factors. The results presented in these figures are therefore a smoothing of the income variability. At the individual farm level, farm cash income for Australian farms can be significantly more variable (Kimura, Antón & LeThi 2010).

Farm cash incomes are subject to wide fluctuations because of variability in factors such as the weather, pests and diseases, the prices producers receive and the cost of farm


inputs. Management of these risks is crucial to the success of farm businesses in Australia.

Many research reports analyse the nature of the risks agricultural businesses face in Australia (Keogh 2012; Kingwell 2011; OECD 2011). Research indicates that Australian farm businesses face income variability equal to the highest observed in OECD countries. Australia has a variable climate, with drought a recurring feature. Climate scientists predict higher temperatures, even greater variability in rainfall and more frequent periods of very low rainfall (Productivity Commission 2009).

The importance of maintaining farm equityMechanisms farm businesses use to manage income variability include holding liquid financial assets (such as farm management deposits) and maintaining high farm equity. Australian farmers usually aim to maintain credit reserves to manage their financial risk. Credit reserves are unused borrowing capacity and generally reflect additional capital from lenders in the form of an open line of credit, such as an overdraft. Maintaining a credit reserve avoids costs associated with liquidating assets to meet cash demands and with reacquiring those assets once the adversity has passed.

Debt servicing and borrowing capacity, broadacre farms

y ABARES provisional estimate.Source: AAGIS


Debt servicing and borrowing capacity, dairy farms

y ABARES provisional estimate.Source: ADIS

Critical to maintaining credit reserves is a lender's willingness to provide loans. Financial institutions lend to farm businesses on the basis of the equity (security) farmers have in their businesses and the capacity of the business to service increased debt long term. Most businesses that institutional lenders allow to operate with an equity ratio of less than 70 per cent are large operations that mostly generate high farm cash incomes or have access to substantial off-farm assets or income. It is therefore important that Australian broadacre farmers reduce debt where possible and build farm equity.

The proportion of broadacre farms with relatively low additional borrowing capacity (equity ratio of less than 70 per cent) and relatively high debt servicing commitments (interest to receipts ratio exceeding 15 per cent) peaked at 8 per cent in 2006-07 and reached 7 per cent in 2009-10 before declining slightly to an estimated 6 per cent in 2012-13. This is well below the highs of around 12 per cent recorded in the early 1990s, when interest rates were high and farm cash incomes low.

In 2008-09 and 2009-10 the proportion of dairy farms with relatively low additional borrowing capacity and relatively high debt servicing commitments increased, reaching an estimated 18 per cent in 2009-10 before declining slightly to an estimated 15 per cent in 2012-13. This is still relatively high, but is relative to the general increase in average farm size and capacity to service larger debts. Historically, the proportion of dairy farms with relatively low additional borrowing capacity and relatively high debt servicing commitments has been higher than that for broadacre farms.

The proportion of broadacre and dairy farms increasing debt declined significantly in 2010-11 and 2011-12 and is estimated to have done so again in 2012-13 to be closer to the record lows recorded in the early 2000s.

In 2012-13 the proportion of broadacre farms recording negative farm cash incomes, and therefore potentially needing to borrow additional working capital, is estimated to have increased by around 3 per cent. The largest increases are in southern Australia and in Western Australia.


Similarly, the proportion of dairy farms recording negative farm cash incomes in 2012-13, and therefore potentially needing to borrow additional working capital, is estimated to have increased by around 8 per cent.

Most Australian broadacre farms had relatively high farm equity and adequate farm cash income in 2012-13. However, lower farm cash income and the additional burden of reduced land values is putting increased financial pressure on some farms and industries.

ConclusionDebt is an important source of funds for farm investment and ongoing working capital for the broadacre and dairy industries, as more than 95 per cent of farms in these sectors are family owned and operated. Funding of family farms for expansion and improvement is limited to the funds available to the family, the profits the business can generate and the funds it can borrow.

Based on available data, increases in average debt per farm business over the past decade are due to rapid expansion in borrowing for on-farm investment and to finance ongoing working capital requirements together with slowing in the rate of principal repayment. Reductions in the rate of principal repayment in the past decade partly reflects increased variability in farm cash incomes with increased frequency of low farm cash incomes in this period. However, increased usage of interest only financing has also contributed to the slowdown.

Increased lending for land purchase fuelled a boom in land prices, raising farm equity and inducing lenders to provide more finance despite an increase in the variability of farm incomes and little apparent upward trend in farm profitability. In addition, debt servicing was supported by provision of interest subsidies to farmers in drought through the exceptional circumstances arrangements. For many regions this assistance was sustained for most of the decade.

Land prices have declined in some regions since 2007-08, particularly those regions with the largest increase in land values over the previous decade or a high incidence of low farm cash incomes. The reduction in land values has prompted financial institutions to tighten lending, restricting access of some farm businesses to further finance in these regions.

Improvement in financial performance, combined with reductions in new borrowing and lower interest rates, resulted in average farm business debt stabilising and to a small reduction in the proportion of farm receipts consumed to service interest payments.

Despite this general improvement in farm incomes, particularly in 2010-11 and 201112, the average proportion of farm receipts consumed by interest payment remains relatively high compared with those recorded in the late 1990s and early 2000s.

Of concern, over the medium and longer term, are erosion of farm equity through a decline in land values and slower rates of debt repayment resulting in individual farms continuing to carry relatively high debt. Family farms in Australia rely on high farm equity to provide the reserve capacity to borrow to meet cashflow needs during periods of reduced farm income. Prolonged reduction in equity and debt servicing capacity significantly raises the financial risk for these farm businesses.

Interpreting change in the equity and income position of farm businesses over time also requires consideration of changes in off-farm investment and earnings by farm families. A


trend toward the increased contribution to farm household incomes from off-farm sources, particularly from wages and salaries earned off-farm by farmers' partners, began more than two decades ago and has continued to grow.

High levels of investment in land, vehicles, machinery and farm infrastructure in recent years—substantially funded by borrowing—provide a basis from which to further increase farm productivity and improve financial performance over the medium term.

ReferencesABARES 2013, Australian farm survey results, 2010-11 to 2012-13, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra, available at daff.gov.au/abares/publications_remote_content/publication_series/farm_survey_results.

Keogh, M 2012, Including risk in enterprise decisions in Australia's riskiest businesses, paper presented at the 56th Australian Agricultural and Resource Economics Society annual conference, 7-10 February, Fremantle, Western Australia.

Kimura, S, Anton, J & LeThi C 2010, 'Farm level analysis of risk and risk management strategies and policies: cross country analysis', OECD Food, Agriculture and Fisheries Papers, no. 26, OECD Publishing, Paris, available at dx.doi.org/10.1787/5kmd6b5rl5kd-en.

Kingwell, RS 2011, Revenue volatility faced by Australian wheatfarmers, paper presented at the 55th Australian Agricultural and Resource Economics Society annual conference, 8-11 February, Melbourne.

OECD 2011, Managing risk in agriculture: policy assessment and design, OECD Publishing, Paris available at dx.doi.org/10.1787/9789264116146-en.

Productivity Commission 2009, Government drought support, Report no. 46, Final Inquiry Report, Melbourne, pp. 211-52.


http://dx.doi.org/10.1787/9789264116146-en

http://dx.doi.org/10.1787/5kmd6b5rl5kd-en

http://daff.gov.au/abares/publications_remote_content/publication_series/farm_survey_results

Statistical tablesFIGURE 1 Contribution to GDP Australia, chain volume measures, reference year 2010-11


FIGURE 2 Markets for Australian merchandise exports in 2012-13 dollars


Import marketsFIGURE 3 Sources of Australian merchandise imports in 2012-13 dollars


Export marketsFIGURE 4 Principal markets for Australian agricultural, forestry and fisheries exports (nominal)


PricesTABLE 1 Indexes of prices received by farmers Australia

Crops sector - Grains 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - barley 145.3 108.3 135.8 131.7 170.8 140.4

Winter crops - canola 142.2 114.2 141.1 133.1 140.8 127.4

Winter crops - lupins 142.9 127.2 136.9 118.7 139.6 122.8

Winter crops - oats 158.3 116.9 143.2 147.7 177.3 155.9

Winter crops - wheat 142.1 110.4 130.1 114.6 164.1 163.1

Summer crops - grain sorghum 121.3 115.9 125.8 111.6 143.3 133.2

Total grains a 137.5 108.7 126.2 115.9 150.5 141.4

Cotton 96.7 98.4 103.6 110.8 93.9 103.3

Sugar 98.3 137.8 128.0 147.1 137.0 107.8

Hay 219.0 181.5 151.1 128.4 136.1 149.7

Fruit 148.2 146.6 181.8 181.4 156.5 160.4

Vegetables 152.9 150.3 167.3 161.3 172.8 177.1

Total crops sector 120.2 108.8 122.3 118.3 131.1 127.6

Livestock sector 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Livestock for slaughter - cattle 164.6 160.0 172.6 173.3 156.4 160.7

Livestock for slaughter - lambs b

204.3 218.7 255.4 250.8 192.1 218.4

Livestock for slaughter - sheep 216.8 343.3 438.0 390.3 210.2 264.7

Livestock for slaughter - live sheep for export

213.4 248.4 304.6 343.7 247.6 273.5

Livestock for slaughter - pigs 153.5 147.1 135.7 134.5 136.5 143.7

Livestock for slaughter - poultry 120.0 114.1 109.8 107.6 112.2 114.3

Livestock for slaughter - total 163.0 163.8 175.5 174.9 156.0 163.5

Livestock products - wool 109.2 116.0 158.4 169.2 142.0 153.3

Livestock products - milk 142.3 125.2 144.8 140.9 130.7 154.1

Livestock products - eggs 108.6 105.5 104.2 104.1 107.4 108.5

Livestock products - total 127.6 120.0 144.6 146.0 132.3 148.7

Store and breeding stock 161.9 168.3 194.0 199.5 169.3 177.9

Total livestock sector 147.6 145.7 162.8 163.3 145.9 156.6

Total prices received 131.8 124.7 139.7 137.5 138.0 140.5a Total for the group includes commodities not separately listed. b Lamb saleyard indicator weight 18-22 kg. f ABARES forecast. s ABARES estimate.


Notes: ABARE revised the method for calculating these indexes in October 1999. The indexes for commodity groups are calculated on a chained weight basis using Fisher's ideal index with a reference year of 1997-98 = 100. Indexes for most individual commodities are based on annual gross unit value of production. Prices used in these calculations exclude GST.Source: ABARES

TABLE 2 Indexes of prices paid by farmers, and terms of trade Australia

Materials and servicesFarmers' terms of trade a 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Index 88.5 88.6 96.4 93.4 95.3 96.3

Seed, fodder and livestock - fodder and feedstuffs

168.0 145.8 121.0 115.6 127.2 121.9

Seed, fodder and livestock - seed, seedlings and plants

120.7 109.4 120.0 116.5 128.1 125.7

Seed, fodder and livestock - store and breeding stock

161.9 168.3 194.0 199.5 169.3 177.9

Seed, fodder and livestock - total 161.0 147.0 137.8 135.2 137.1 135.3

Chemicals 136.7 116.2 110.4 112.6 110.3 112.5

Electricity 121.5 142.1 158.9 176.8 180.8 184.8

Fertiliser 239.6 156.0 157.3 165.5 158.2 158.2

Fuel and lubricants 211.0 191.7 211.3 228.2 210.3 212.4

Total 164.0 146.4 146.1 149.3 148.6 149.6

Labour 142.6 147.3 151.9 155.7 159.3 162.8

Marketing 137.2 134.0 144.8 154.1 151.3 155.4

Overheads - Insurance 155.6 167.0 173.7 185.8 190.0 194.2

Overheads - Interest paid 116.8 111.2 122.3 114.9 98.2 94.5

Overheads - Rates and taxes 141.6 144.9 149.4 153.0 156.4 159.9

Overheads - Other overheads 137.2 140.6 144.9 148.4 151.8 155.1

Overheads - Total 126.6 124.3 133.7 129.9 118.9 117.2

Capital items 141.2 144.8 149.3 153.2 157.0 160.9

Total prices paid 148.9 140.8 144.8 147.2 144.8 146.0

Excluding capital items 149.9 140.4 144.4 146.6 143.6 144.5

Excluding capital and overheads 156.7 144.9 147.1 151.3 151.0 152.8

Excluding seed, fodder and store and breeding stock

146.4 139.4 146.2 149.7 146.4 148.2

a Ratio of index of prices received by farmers and index of prices paid by farmers. f ABARES forecast. s ABARES estimate.Notes: ABARE revised the method for calculating these indexes in October 1999. The indexes for commodity groups are calculated on a chained weight basis using Fisher's ideal index with a reference year of 1997-98 = 100. Prices used in these calculations exclude GST.Sources: ABARES (compiled from various market sources); Australian Bureau of Statistics


Costs and returnsTABLE 3 Farm costs and returns Australia

CostsCategory unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Materials and services - chemicals

$m 1 792 1 496 1 435 1 478 1 426 1 458

Materials and services - fertiliser

$m 3 381 2 145 2 217 2 352 2 216 2 217

Materials and services - fuel and lubricants

$m 2 243 1 966 2 230 2 414 2 182 2 193

Materials and services - marketing

$m 3 733 3 814 3 841 4 011 3 715 3 933

Materials and services - repairs and maintenance

$m 3 080 3 004 3 702 3 930 4 008 4 292

Materials and services - seed and fodder

$m 5 263 4 543 4 202 4 143 4 575 4 461

Materials and services - other $m 3 829 3 968 4 289 4 434 4 471 4 606

Materials and services - total $m 23 320 20 935 21 916 22 763 22 593 23 161

Labour $m 3 827 3 784 4 120 4 245 4 282 4 368

Overheads - interest paid $m 4 331 4 455 5 023 4 836 4 341 4 386

Overheads - rent and third party insurance

$m 477 494 513 525 537 549

Total $m 8 634 8 733 9 655 9 607 9 160 9 303

Total cash costs $m 31 955 29 668 31 571 32 369 31 753 32 464

Depreciation a $m 4 676 4 792 4 944 5 072 5 199 5 326

Total farm costs $m 36 631 34 460 36 515 37 441 36 952 37 789

ReturnsCategory unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Gross value of farm production $m 41 929 39 667 46 981 48 067 47 343 49 009

Net returns and production - Net value of farm production b

$m 5 298 5 207 10 466 10 626 10 390 11 220

Net returns and production - Real net value of farm production c

$m 5 977 5 741 11 192 11 107 10 619 11 220

Net returns and production - Net farm cash income d

$m 5 865 9 999 15 410 15 698 15 589 16 546

Net returns and production - Real net farm cash income c

$m 6 617 11 025 16 478 16 408 15 932 16 546

a Based on estimated movements in capital expenditure and prices of capital inputs. b Gross value of farm production less total farm costs. c In 2013-14 Australian dollars. d Gross farm cash income less total cash costs. f ABARES forecast. s ABARES estimatesNote: Prices used in these calculations exclude GST.Sources: ABARES (compiled from various market sources); Australian Bureau of Statistics


ExportsFIGURE 5 Contribution to exports by sector, balance of payments basis Australia

a ABARES rural balance of payments adjusted to include farm, fisheries and forestry products classified as other merchandise by ABS. Sources: ABARES; Australian Bureau of Statistics


SectorsTABLE 4 Volume of production indexes Australia

Farm unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Grains and oilseeds index 116.1 116.6 139.9 158.6 132.8 138.8

Total crops index 113.2 114.4 126.2 138.2 127.5 130.9

Livestock slaughterings index 111.5 109.4 110.5 110.3 116.3 117.3

Total livestock index 100.6 98.7 100.6 101.0 104.5 105.2

Total farm sector index 107.9 107.5 114.2 120.1 116.6 118.6f ABARES forecast. s ABARES estimate.Note: ABARE revised the method for calculating production indexes in October 1999. The indexes for the different groups of commodities are calculated on a chained weight basis using Fisher's ideal index with a reference year of 1997-98 = 100.Sources: ABARES; Australian Bureau of Statistics

TABLE 5 Industry gross value added a, b Australia

Industry unit 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Agriculture, forestry and fishing - agriculture

$m 21 858 26 172 25 605 27 726 29 893 28 186

Agriculture, forestry and fishing - forestry and fishing

$m 4 136 4 436 4 429 4 430 4 315 3 929

Agriculture, forestry and fishing - total

$m 26 030 30 622 30 055 32 157 34 208 32 115

Mining $m 119 661 123 310 133 015 131 109 138 953 151 179

Manufacturing - food, beverage and alcohol

$m 23 294 22 556 24 205 24 085 22 886 22 814

Manufacturing - textile, clothing, footwear and leather

$m 10 486 9 386 7 331 6 855 6 707 6 538

Manufacturing - wood and paper products

$m 7 486 6 909 7 191 7 092 7 000 7 151

Manufacturing - printing, publishing and recorded media

$m 5 161 4 319 4 133 4 125 3 839 4 173

Manufacturing - petroleum, coal, chemical products

$m 19 190 17 259 17 903 17 913 18 012 17 792

Manufacturing - non-metallic mineral products

$m 5 212 5 172 5 073 4 971 4 621 4 556

Manufacturing - metal products $m 22 965 22 660 21 296 22 203 22 354 21 154

Manufacturing - machinery and equipment

$m 20 352 19 579 20 731 20 566 21 207 21 286

Manufacturing - total $m 113 034 107 250 107 760 107 808 106 628 105 462

Building and construction $m 94 317 98 381 98 639 103 338 108 033 108 973

Electricity, gas and water supply

$m 31 036 32 335 33 200 33 811 33 357 33 018


Industry unit 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Taxes less subsidies on products

$m 92 543 91 632 91 198 93 524 93 711 94 517

Statistical discrepancy $m 0 0 1 0 4 705 8 460

Gross domestic product $m 1 320 747 1 342 514 1 370 540 1 403 888 1 451 824 1 493 171a Chain volume measures, reference year is 2010-11. b ANZSIC 2006. Zero is used to denote nil or less than $0.5 million.Source: Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product, cat. no. 5206.0, Canberra

Employment, banksTABLE 6 Employment a, b Australia

Industry 2007-08'000

2008-09'000

2009-10'000

2010-11'000

2011-12'000

2012-13'000

Agriculture, forestry and fishing - agriculture

303 322 324 305 289 278

Agriculture, forestry and fishing - forestry and logging

8 8 7 6 8 7

Agriculture, forestry and fishing - commercial fishing c

14 9 11 12 11 10

Agriculture, forestry and fishing - support services

30 24 26 27 27 27

Agriculture, forestry and fishing - total

355 363 369 350 335 321

Mining 146 170 173 204 249 266

Manufacturing - food, beverages and tobacco

230 227 228 228 227 225

Manufacturing - textiles, clothing, footwear and leather

50 48 46 44 39 40

Manufacturing - wood and paper product

70 68 64 56 55 54

Manufacturing - printing, publishing and recorded media

54 51 52 55 42 48

Manufacturing - petroleum, coal and chemical product

98 90 88 84 88 90

non-metallic mineral product 42 40 37 37 38 35

metal product 159 157 146 147 146 131

other manufacturing 360 348 343 334 319 331

total 1 063 1 029 1 004 986 955 954

Other industries 9 144 9 338 9 459 9 750 9 881 10 022

Total 10 708 10 899 11 003 11 290 11 419 11 563a Average employment over four quarters. b ANZSIC 2006. Caution should be used when using employment statistics at the ANZSIC subdivision and group levels due to estimates that may be subject to sampling


variability and standard errors too high for most practical purposes. c Includes aquaculture, fishing, hunting and trapping.Source: Australian Bureau of Statistics, Labour Force, Australia, cat. no. 6291.0.55.003, Canberra

TABLE 7 All banks lending to business a Australia

Business 2010-11Jun$b

2011-12Sep

$b

2011-12Dec$b

2011-12Mar

$b

2011-12Jun$b

2012-13Sep

$b

2012-13Dec$b

2012-13Mar

$b

Agriculture, forestry and fishing

60.2 60.3 60.1 60.4 62.4 60.5 59.2 58.6

Mining 12.4 13.5 14.3 15.3 17.0 18.9 18.2 18.9

Manufacturing 39.1 41.0 40.8 43.7 42.5 41.0 39.8 39.7

Construction 30.1 29.3 28.8 29.2 30.3 29.1 27.8 28.0

Wholesale and retail trade, transport and storage

92.8 95.4 97.3 99.5 101.7 100.6 103.2 103.0

Finance and insurance 89.4 93.4 96.5 99.2 100.8 102.7 102.9 104.1

Other 314.1 315.4 320.6 321.6 329.3 342.6 342.6 345.2

Total 638.0 648.4 658.4 668.9 683.9 695.5 693.8 697.5a Includes variable and fixed interest rate loans outstanding plus bank bills outstanding.Source: Reserve Bank of Australia, Bank Lending to Business - Selected Statistics, Bulletin Statistical Table D8

Farm debt, world pricesTABLE 8 Rural indebtedness to financial institutions a Australia

Category 2006-07$m

2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

Rural debt - All banks a 47 188 53 743 57 384 58 097 60 184 59 749

Rural debt - Other government agencies b

1 286 1 409 1 615 1 811 1 871 2 076

Rural debt - Pastoral and other finance companies

4 592 5 126 4 462 2 029 2 010 1 801

Rural debt - Large finance institutional debt c

53 066 60 278 63 461 61 937 64 065 63 626

Deposits - Farm management deposits

2 782 2 879 2 843 2 784 3 216 3 532

a Derived from all banks lending to agriculture, fishing and forestry. b Includes the government agency business of state banks and advances made under War Service Land Settlement. Before 1996 includes loans from the Queensland Industry Development Corporation. From 1996 these loans are included in bank lending. c Sum of the above.Sources: ABARES; Department of Agriculture, Fisheries and Forestry; Reserve Bank of Australia, Estimated Rural Debt to Specified Lenders, Bulletin Statistical Table D9

TABLE 9 Annual world indicator prices of selected commodities

World


Crops unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Wheat a US$/t 271 209 317 299 348 305

Corn b US$/t 190 160 254 281 312 235

Rice c US$/t 609 532 518 588 549 538

Soybeans d US$/t 422 395 493 506 597 510

Cotton e USc/lb 61.2 77.5 164.3 100.1 87.9 90.0

Sugar g USc/lb 14.9 20.3 26.5 22.7 18.0 16.0

Livestock products unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Beef h USc/kg 307 319 391 433 438 445

Wool i Ac/kg 794 872 1 132 1 203 1 035 1 100

Butter j US$/t 2 485 3 477 4 683 3 883 3 727 3 850

Cheese j US$/t 3 281 3 748 4 221 4 258 4 150 4 260

Skim milk powder j US$/t 2 333 2 948 3 392 3 233 3 731 3 850a US hard red winter wheat, fob Gulf. b US no. 2 yellow corn, delivered US Gulf. c USDA nominal quote for Thai white rice, 100 per cent, Grade B, fob, Bangkok (August-July basis). d US fob Gulf. e Cotlook 'A' index. f ABARES forecast. g Nearby futures price (October-September basis), Intercontinental Exchange, New York no. 11 contract. h US cif price. i Australian Wool Exchange eastern market indicator. j Average of traded prices (excluding subsidised sales). s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Australian Dairy Corporation; Australian Wool Exchange; Cotlook Ltd; Food and Agriculture Organization; General Agreement on Tariffs and Trade; Intercontinental Exchange; ISTA Mielke and Co.; Meat & Livestock Australia; New York Board of Trade; Reuters Ltd; United States Department of Agriculture

Gross unit valuesTABLE 10 Gross unit values of farm products a

Crops b - Grains and oilseeds

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - barley $/t 231 172 216 210 272 224

Winter crops - canola $/t 548 440 544 513 543 491

Winter crops - field peas $/t 345 241 266 359 431 280

Winter crops - lupins $/t 280 249 268 232 273 240

Winter crops - oats $/t 216 160 196 202 242 213

Winter crops - triticale $/t 257 220 184 176 236 201

Winter crops - wheat $/t 281 218 257 227 325 323

Summer crops - corn (maize) $/t 283 268 259 251 293 276

Summer crops - rice $/t 566 457 240 270 297 287

Summer crops - grain sorghum $/t 205 196 213 189 243 225

Summer crops - soybeans c $/t 551 551 501 472 434 430


Crops b - Grains and oilseeds

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Summer crops - sunflower seed c

$/t 696 696 567 551 540 529

Crops b - Industrial crops unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Cotton lint d c/kg 193 205 377 225 199 228

Sugar cane (cut for crushing) $/t 32 44 38 43 43 34

Wine grapes $/t 527 464 413 458 499 509

Livestock unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Beef cattle c/kg 320 311 336 337 304 313

Lambs c/kg 415 444 519 509 390 443

Pig c/kg 304 291 269 266 270 284

Poultry c/kg 215 204 197 193 201 205


Wool c/kg 430 456 623 666 559 603

Milk c/L 42.5 37.4 43.2 42.1 39.0 46.0a Average gross unit value across all grades in principal markets, unless otherwise indicated. Includes the cost of containers, commission and other expenses incurred in getting the commodities to their principal markets. These expenses are significant. b Average unit gross value relates to returns received from crops harvested in that year, regardless of when sales take place, unless otherwise indicated. c Price paid by crusher. d Australian base price for sales in the financial year indicated. f ABARES forecast. s ABARES estimate.Note: Prices used in these calculations exclude GST.Sources: ABARES; Australian Bureau of Statistics

WorldTABLE 11 World production, consumption, stocks and trade for selected commodities a

FarmGrains unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Wheat - production Mt 685 679 653 695 653 695

Wheat - consumption Mt 645 653 657 696 673 694

Wheat - closing stocks Mt 172 199 194 194 174 175

Wheat - exports b Mt 137 128 126 145 140 147

Coarse grains - production Mt 1 113 1 113 1 098 1 155 1 134 1 247

Coarse grains - consumption Mt 1 080 1 103 1 130 1 155 1 146 1 216


Grains unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Coarse grains - closing stocks

Mt 195 197 165 166 152 182

Coarse grains - exports b Mt 124 143 125 149 119 147

Rice - production c Mt 448 440 449 465 469 476

Rice - consumption c Mt 436 437 445 458 468 474

Rice - closing stocks c Mt 92 96 99 107 107 109

Rice - exports bd Mt 29 31 36 39 37 38

Oilseeds and vegetable oils

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Oilseeds - production Mt 399 447 460 445 469 487

Oilseeds - consumption Mt 403 424 447 464 464 477

Oilseeds - closing stocks Mt 58 76 84 66 70 81

Oilseeds - exports Mt 95 107 108 111 112 119

Vegetable oils - production Mt 134 141 149 157 159 167

Vegetable oils - consumption Mt 131 140 146 152 157 164

Vegetable oils - closing stocks

Mt 13 14 15 18 18 21

Vegetable oils - exports Mt 56 58 60 63 66 68

Vegetable protein meals - production

Mt 224 240 253 263 264 272

Vegetable protein meals - consumption

Mt 224 234 247 258 265 271

Vegetable protein meals - closing stocks

Mt 6 8 10 12 11 12

Vegetable protein meals - exports

Mt 66 70 75 78 79 81

Industrial crops unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Cotton - production Mt 23 22 25 27 26 25

Cotton - consumption Mt 23 26 25 22 23 24

Cotton - closing stocks Mt 13 10 11 16 19 20

Cotton - exports Mt 7 8 8 10 10 8

Sugar - production Mt 149 159 165 174 183 181

Sugar - consumption Mt 162 163 164 168 173 176

Sugar - closing stocks Mt 61 57 58 64 74 79

Sugar - exports Mt 48 55 55 54 56 57



Meat deg - production Mt 250 257 259 265 269 272

Meat deg - consumption Mt 247 254 255 261 265 269

Meat deg - closing stocks Mt 2.4 2.3 2.3 2.6 2.4 2.5

Meat deg - exports b Mt 23.2 24.4 26.3 27.3 27.9 28.9

Wool h - production kt 1 104 1 119 1 120 1 089 1 111 1 129

Wool h - consumption di kt 1 105 1 125 1 130 1 110 1 105 1 127

Wool h - closing stocks j kt 65 55 45 24 25 35

Wool h - exports k kt 484 501 502 447 485 496

Butter dg - production kt 8 039 8 181 8 584 8 919 9 133 9 250

Butter dg - consumption kt 7 549 7 828 8 094 8 399 8 651 8 750

Butter dg - closing stocks kt 257 176 216 259 253 240

Butter dg - exports kt 813 736 724 773 793 820

Skim milk powder dgl - production

kt 3 452 3 415 3 675 3 979 3 994 4 160

Skim milk powder dgl - consumption

kt 2 920 3 000 3 190 3 439 3 449 3 610

Skim milk powder dgl - closing stocks

kt 556 496 449 461 425 400

Skim milk powder dgl - exports

kt 1 140 1 344 1 528 1 596 1 636 1 710

a Some figures are not based on precise or complete analyses. b Includes intra-EU trade. c Milled equivalent. d On a calendar year basis, e.g. 1991-92 = 1992. e Beef and veal, mutton, lamb, goat, pig and poultry meat. f ABARES forecast. g Selected countries. h Clean equivalent. i Virgin wool at the spinning stage in 65 countries. j Held by marketing bodies and on-farm in five major exporting countries. k Five major exporting countries. l Non-fat dry milk. s ABARES estimate.Sources: ABARES; Argentine Wool Federation; Australian Bureau of Statistics; Capewools South Africa; Commodities Research Unit; Commonwealth Secretariat; Department of Agriculture, Fisheries and Forestry; Economic Commission for Europe; Fearnleys; Food and Agriculture Organization; International Grains Council; International Sugar Organization; ISTA Mielke and Co.; Meat & Livestock Australia; Ministry of Agriculture, Forestry and Fisheries (Japan); New Zealand Dairy Board; New Zealand Wool Board; Poimena Analysis, Beef + Lamb New Zealand; Uruguayan Association of Wool Exporters; United States Department of Agriculture

Australian productionTABLE 12 Agricultural, fisheries and forestry commodity production Australia

CropsGrains and oilseeds unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - barley kt 7 997 7 865 7 995 8 221 6 761 7 673

Winter crops - canola kt 1 844 1 907 2 359 3 427 4 056 3 310

Winter crops - chickpeas kt 443 487 513 673 818 669

Winter crops - field peas kt 238 356 395 342 319 376

Winter crops - lupins kt 708 823 808 982 459 459


Grains and oilseeds unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - oats kt 1 160 1 162 1 128 1 262 1 048 1 196

Winter crops - triticale kt 363 545 355 285 429 424

Winter crops - wheat kt 21 420 21 834 27 410 29 905 22 079 24 467

Summer crops - cottonseed kt 466 547 1 269 1 694 1 403 1 400

Summer crops - corn (maize) kt 376 328 357 451 496 412

Summer crops - rice kt 61 197 723 919 1 166 907

Summer crops - grain sorghum

kt 2 692 1 508 1 935 2 239 1 721 2 020

Summer crops - soybeans kt 80 60 30 86 92 70

Summer crops - sunflower seed

kt 55 41 43 47 44 42

Summer crops - other oilseeds a

kt 34 40 33 35 40 40

Total grains and oilseeds kt 37 935 37 699 45 352 50 567 40 930 43 465


Cotton lint kt 329 387 926 1 198 1 002 990

Sugar cane (cut for crushing) kt 31 457 31 235 27 443 27 943 30 400 30 600

Sugar (tonnes actual) kt 4 634 4 472 3 610 3 683 4 300 4 250

Wine grapes kt 1 684 1 533 1 598 1 582 1 695 1 725

Horticulture unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Fruit - apples kt 295 264 300 289 295 300

Fruit - bananas kt 270 302 203 286 312 318

Fruit - oranges kt 348 391 291 390 360 380

Vegetables - carrots kt 264 267 225 319 319 322

Vegetables - onions kt 284 260 331 347 310 300

Vegetables - potatoes kt 1 179 1 278 1 128 1 288 1 290 1 292

Vegetables - tomatoes kt 440 472 302 372 400 418

LivestockSlaughterings unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Cattle and calves '000 8 583 8 364 8 097 7 873 8 457 8 700

Sheep '000 10 501 7 333 5 341 5 175 8 192 6 343

Lambs '000 20 395 19 478 17 880 18 879 21 122 19 603

Pigs '000 4 476 4 561 4 643 4 733 4 745 4 830


Live exports unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Cattle exported live b '000 845 871 728 579 513 590

Sheep exported live c '000 4 067 3 060 2 916 2 562 2 000 2 100

Meat produced unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Beef and veal d kt 2 125 2 109 2 133 2 115 2 245 2 300

Lamb d kt 416 413 391 419 457 427

Mutton d kt 220 162 123 120 183 146

Pig meat kt 321 331 342 351 356 362

Chicken meat d kt 832 834 1 015 1 030 1 046 1 070

Total kt 3 914 3 849 4 005 4 034 4 287 4 305


Wool e kt 420 423 429 411 427 411

Milk g ML 9 388 9 023 9 101 9 480 9 200 9 400

Butter h kt 148 128 122 120 118 120

Cheese kt 325 349 339 340 331 342

Casein kt 10 8 5 5 5 4

Skim milk powder i kt 212 190 222 230 224 230

Whole milk powder kt 148 126 151 140 109 112

Buttermilk powder kt 15 13 12 11 11 12

Forestry - logs harvested j unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Total '000 m3 25 799 25 577 26 567 23 759 23 739 25 100

Fisheries k unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Tuna kt 13.7 11.0 9.1 10.1 10.5 10.7

Salmonids l kt 30.0 32.0 36.8 44.0 47.0 49.3

Other fish kt 115.7 120.7 112.0 112.6 113.7 112.8

Prawns kt 24.2 27.3 27.0 22.5 24.0 24.7

Rocklobster m kt 12.2 10.1 9.9 8.7 9.3 9.3

Abalone kt 5.6 5.0 5.2 5.0 5.0 4.9

Scallops kt 7.6 7.6 6.2 2.3 3.0 4.0

Oysters kt 14.2 14.9 13.9 15.7 15.1 15.2


Fisheries k unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Other molluscs kt 6.6 6.4 6.6 7.5 6.5 6.6

Other crustaceans kt 5.8 5.7 6.2 6.0 6.0 6.1a Linseed, safflower seed and peanuts. b Excludes animals exported for breeding purposes. c Includes animals for breeding, d In carcass weight and includes carcass equivalent of canned meats. e Greasy equivalent of shorn wool (includes crutching), dead and fellmongered wool and wool exported on skins. f ABARES forecast. g Includes the whole milk equivalent of farm cream intake. h Includes the butter equivalent of butteroil, butter concentrate, ghee and dry butterfat. i Includes mixed skim and buttermilk powder. j Excludes logs harvested for firewood. k Liveweight. l Includes salmon and trout production. m Includes Queensland bugs. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Australian Dairy Corporation; Australian Fisheries Management Authority; Department of Fisheries, Western Australia; Department of Primary Industries, Parks, Water and Environment, Tasmania; Fisheries Queensland, Department of Employment, Economic Development and Innovation; Fisheries Victoria, Department of Primary Industries; Industry & Investment New South Wales; Northern Territory Department of Regional Development, Primary Industry, Fisheries and Resources; Primary Industries and Resources, South Australia; Raw Cotton Marketing Advisory Committee; South Australian Research and Development Institute; state and territory forest services; various Australian forestry industries

Value of productionTABLE 13 Gross value of farm and fisheries production Australia

CropsGrains and oilseeds 2008-09

$m2009-10

$m2010-11

$m2011-12

$m2012-13 s

$m2013-14 f

$m

Winter crops - barley 1 850 1 356 1 729 1 723 1 838 1 716

Winter crops - canola 1 011 840 1 283 1 759 2 202 1 626

Winter crops - chickpeas 199 211 207 308 317 208

Winter crops - field peas 82 86 105 123 138 105

Winter crops - lupins 198 205 216 228 125 110

Winter crops - oats 251 186 221 255 254 255

Winter crops - triticale 93 120 65 50 101 85

Winter crops - wheat 6 021 4 765 7 052 6 775 7 165 7 891

Summer crops - maize 106 88 92 113 146 114

Summer crops - rice 34 90 174 248 347 261

Summer crops - grain sorghum 553 296 412 423 417 455

Summer crops - soybeans 44 33 15 41 40 30

Summer crops - sunflower seed 38 29 24 26 24 22


28 37 30 33 37 38

Total grains and oilseeds 10 778 8 665 12 138 12 503 13 627 13 324

Industrial crops 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Cotton lint and cottonseed b 693 828 2 087 2 889 2 048 2 226



2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Sugar cane (cut for crushing) 1 021 1 382 1 036 1 214 1 321 1 027

Wine grapes 887 709 712 725 846 878

Total industrial crops 2 601 2 919 3 834 4 827 4 214 4 131

Horticulture 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Table and dried grapes 286 273 308 308 307 296

Fruit and nuts (excl. grapes) 2 871 2 950 3 013 3 050 3 273 3 450

Vegetables 3 012 3 023 3 338 3 339 3 600 3 710

Other horticulture 1 556 1 649 1 606 1 272 1 414 1 549

Total horticulture 7 725 7 895 8 265 7 968 8 594 9 005

Other crops nei c 1 665 1 660 1 706 1 550 1 185 1 205

Total crops 22 769 21 138 25 943 26 848 27 621 27 665

LivestockSlaughterings 2008-09

$m2009-10

$m2010-11

$m2011-12

$m2012-13 s

$m2013-14 f

$m

Cattle and calves d 6 806 6 567 7 164 7 134 6 833 7 190

Sheep e 428 499 484 419 345 347

Lambs eg 1 725 1 832 2 029 2 136 1 782 1 894

Pigs 976 965 919 934 962 1 030

Poultry 1 862 1 785 2 077 2 078 2 199 2 300

Live exports 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Cattle exported live h 646 701 660 651 589 659

Sheep exported live h 340 298 348 345 194 225

Total livestock i 12 834 12 722 13 795 13 836 13 065 13 821

Livestock products 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Wool j 1 806 1 928 2 673 2 734 2 386 2 497

Milk k 3 988 3 371 3 932 3 986 3 588 4 324

Eggs 447 428 572 583 595 610

Honey and beeswax 86 80 66 79 88 92

Total livestock products 6 326 5 807 7 243 7 383 6 657 7 523


Livestock products 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Total farm 41 929 39 667 46 981 48 067 47 343 49 009

Forestry products l 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Total 1 759 1 777 1 851 1 647 1 488 1 575

Fisheries products m 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Tuna 187 125 139 172 175 170

Salmonids n 326 369 427 513 539 564

Other fish o 463 464 428 456 450 441

Prawns 290 325 306 266 312 321

Rocklobster q 415 381 390 384 421 433

Abalone 189 173 178 170 172 185

Scallops 26 23 22 8 9 13

Oysters 93 101 97 107 107 109

Pearls r 90 105 120 102 93 104

Other molluscs t 49 32 31 34 33 34

Other crustaceans 66 65 65 78 69 71

Total fish 2 214 2 191 2 241 2 316 2 409 2 474a Linseed, safflower seed and peanuts. b Value delivered to gin. c Mainly fodder crops. d Includes dairy cattle slaughtered. e Excludes skin values. f ABARES forecast. g Lamb saleyard indicator weight 18-22 kg. h Includes animals exported for breeding purposes. i Total livestock slaughterings includes livestock disposals. j Shorn, dead and fellmongered wool and wool exported on skins. k Milk intake by factories and valued at the farm gate. l Excludes logs harvested for firewood. m Value to fishers of product landed in Australia. n Includes salmon and trout production. o Includes an estimated value of aquaculture. q Includes Queensland bugs. r Includes Northern Territory aquaculture production from 2009—10. s ABARES estimate. t Also includes fish and aquaculture values not elsewhere included. nei not elsewhere included.Note: The gross value of production is the value placed on recorded production at the wholesale prices realised in the marketplace. The point of measurement can vary between commodities. Generally the marketplace is the metropolitan market in each state and territory. However, where commodities are consumed locally or where they become raw material for a secondary industry, these points are presumed to be the marketplace. Prices used in these calculations exclude GST.Sources: ABARES; Australian Bureau of Statistics

Areas, stockTABLE 14 Crop areas and livestock numbers Australia

Crop areas - Grains and oilseeds

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - barley '000 ha 5 015 4 422 3 681 3 718 3 680 3 747

Winter crops - canola '000 ha 1 693 1 695 2 078 2 461 2 988 2 405


Crop areas - Grains and oilseeds

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - chickpeas '000 ha 338 429 653 456 574 508

Winter crops - field peas '000 ha 300 285 318 249 281 256

Winter crops - lupins '000 ha 577 692 756 689 450 387

Winter crops - oats '000 ha 870 850 826 731 668 773

Winter crops - triticale '000 ha 323 350 187 145 258 245

Winter crops - wheat '000 ha 13 530 13 881 13 502 13 902 13 243 13 712

Summer crops - maize '000 ha 65 59 62 70 81 70

Summer crops - rice '000 ha 7 19 76 103 114 101


'000 ha 767 498 633 659 565 634

Summer crops - soybeans '000 ha 42 31 17 38 41 34


'000 ha 52 27 37 40 30 35


'000 ha 20 16 19 18 17 17

Total grains and oilseeds '000 ha 24 095 23 787 23 946 24 295 23 876 23 792

Crop areas - Industrial crops

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Cotton '000 ha 164 208 590 600 442 434

Sugar cane b '000 ha 391 389 334 370 380 388

Winegrapes e '000 ha 157 152 154 145 146 147

Livestock numbers c unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Cattle - beef million 25.29 24.01 25.94 25.69 25.30 25.10

Cattle - dairy million 2.61 2.54 2.57 2.73 2.72 2.72

milking herd d million 1.68 1.60 1.59 1.70 1.69 1.70

Cattle - total million 27.91 26.55 28.51 28.42 28.02 27.82

Sheep million 72.7 68.1 73.1 74.7 73.8 74.4

Pigs million 2.30 2.29 2.29 2.14 2.12 2.15a Linseed and safflower seed. b Cut for crushing. c At 30 June. d Cows in milk and dry. e This figure is for grapes for wine only. Prior to 2008-09 this figure includes grapes used for winemaking and other purposes such as drying and table. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics


YieldsTABLE 15 Average farm yields Australia

Crops - Grains and oilseeds

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - barley t/ha 1.59 1.78 2.17 2.21 1.84 2.05

Winter crops - canola t/ha 1.09 1.13 1.14 1.39 1.36 1.38

Winter crops - chickpeas t/ha 1.31 1.14 0.79 1.48 1.43 1.32

Winter crops - field peas t/ha 0.79 1.25 1.24 1.38 1.14 1.47

Winter crops - lupins t/ha 1.23 1.19 1.07 1.42 1.02 1.19

Winter crops - oats t/ha 1.33 1.37 1.37 1.73 1.57 1.55

Winter crops - triticale t/ha 1.12 1.56 1.90 1.97 1.66 1.73

Winter crops - wheat t/ha 1.58 1.57 2.03 2.15 1.67 1.78

Summer crops - maize t/ha 5.82 5.56 5.74 6.47 6.13 5.88

Summer crops - rice t/ha 8.46 10.39 9.54 8.91 10.24 8.98


t/ha 3.51 3.03 3.06 3.40 3.05 3.19

Summer crops - soybeans

t/ha 1.89 1.90 1.71 2.26 2.23 2.06


t/ha 1.07 1.54 1.14 1.17 1.46 1.20

Crops - Industrial crops

unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Cotton (lint) t/ha 2.01 1.86 1.57 2.00 2.27 2.28

Sugar cane (for crushing) t/ha 80 80 82 76 80 79

Winegrapes t/ha 10.7 10.1 10.4 10.9 11.6 11.7

Livestock unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Wool a kg/sheep 4.29 4.26 4.34 4.19 4.22 4.19

Whole milk L/cow 5 602 5 653 5 727 5 577 5 444 5 546a Shorn (including lambs). f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics

Export volumesTABLE 16 Volume of agricultural and fisheries exports Australia a

Farm


Grains and oilseeds unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Winter crops - barley b kt 3 898 4 234 4 625 6 568 5 163 5 151

Winter crops - canola kt 973 1 238 1 471 2 323 3 488 2 562

Winter crops - chickpeas kt 467 459 409 653 853 541

Winter crops - lupins kt 157 377 289 316 453 132

Winter crops - oats (unprepared)

kt 196 216 127 163 61 159

Winter crops - peas c kt 118 163 254 248 208 220

Winter crops - wheat d kt 13 410 13 725 18 431 23 026 21 270 19 179

Summer crops - cottonseed

kt 37 106 268 654 754 670

Summer crops - maize kt 69 15 12 68 134 104

Summer crops - rice kt 106 54 174 538 638 588


kt 1 368 487 553 1 112 1 291 766

Summer crops - other oilseeds e

kt 10 13 7 6 10 8

Total grains and oilseeds kt 20 809 21 088 26 620 35 674 34 323 30 080


Raw cotton g kt 260 395 505 994 1 306 992

Sugar kt 3 268 3 506 2 735 2 572 2 996 2 999

Wine ML 751 777 727 713 698 735

Meat and live animals unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Beef and veal hi kt 968 899 937 948 1 014 1 070

Live cattle j '000 845 871 728 579 513 590

Lamb h kt 156 157 157 174 201 179

Live sheep k '000 4 067 3 060 2 916 2 562 2 000 2 100

Mutton h kt 146 111 86 89 144 118

Pig meat h kt 32 30 31 29 26 27

Poultry meat h kt 37 28 31 38 32 38

Wool unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Greasy ls kt 314 308 335 301 321 307

Semi-processed kt (gr eq) 62 49 44 37 34 33

Skins kt (gr eq) 70 71 65 67 87 83


Wool unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Total ks kt (gr eq) 445 428 444 405 442 423

Dairy products unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Butter m kt 70 74 56 49 54 49

Cheese kt 146 168 163 161 174 176

Casein kt 8 10 5 4 4 4

Skim milk powder kt 162 126 155 141 147 152

Whole milk powder kt 116 91 108 102 87 89

Fisheries products unit 2008-09 2009-10 2010-11 2011-12 2012-13 s 2013-14 f

Tuna kt 11.5 9.5 7.8 8.9 8.9 9.4

Salmonids kt 6.6 4.0 6.4 5.8 2.6 4.7

Other fish kt 7.5 7.1 7.7 6.5 5.5 6.5

Prawns n - Frozen kt 4.7 4.5 6.4 5.3 3.9 4.1

Rocklobster - Fresh, chilled, frozen or cooked

kt 9.6 7.7 7.0 6.9 7.8 7.9

Abalone - Live, fresh or chilled

kt 1.9 1.8 1.7 1.6 1.4 1.5

Abalone - Frozen or cooked

kt 0.5 0.7 0.8 0.8 0.7 0.7

Abalone - Prepared or preserved

kt 0.9 1.1 1.0 0.8 0.7 0.8

Scallops o kt 1.1 1.1 0.6 0.4 0.4 0.6a ABARES has revised the calculation method for the volume of farm exports series back to 1988-89. b Includes the grain equivalent of malt. c Includes field peas and cowpeas. d Includes the grain equivalent of wheat flour. e Includes soybeans, linseed, sunflower seed, safflower seed and peanuts. Excludes meals and oils. f ABARES forecast. g Excludes cotton waste and linters. h In shipped weight. Fresh, chilled or frozen. i Includes meat loaf. j Excludes breeding stock. k Includes breeding stock. l ABS recorded trade data adjusted for changes in stock levels held overseas. m Includes ghee, dry butterfat, butter concentrate and butteroil, and dairy spreads, all expressed as butter. n Excludes volume of other prawn products. o Includes crumbed scallops. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra; Department of Agriculture, Fisheries and Forestry; Department of Foreign Affairs and Trade

Export valuesTABLE 17 Value of agricultural, fisheries and forestry exports (fob) Australia a

FarmGrains and oilseeds 2008-09

$m2009-10

$m2010-11

$m2011-12

$m2012-13 s

$m2013-14 f

$m

Winter crops - barley b 1 321 1 093 1 295 1 875 1 626 1 505

Winter crops - canola 595 583 866 1 344 2 094 1 412


Grains and oilseeds 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m



Winter crops - oats 64 53 37 47 20 46

Winter crops - peas c 62 60 85 93 89 78

Winter crops - wheat d 5 028 3 692 5 516 6 378 6 776 6 533

Summer crops - cottonseed 19 46 85 195 219 191

Summer crops - corn (maize) 13 8 6 24 50 33

Summer crops - rice 143 59 154 458 521 463


Summer crops - other oilseeds e 27 24 14 10 13 13

Total grains and oilseeds 8 015 6 102 8 505 11 192 12 460 10 868


2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Raw cotton g 500 755 1 367 2 736 2 693 2 263

Sugar 1 338 1 887 1 436 1 556 1 403 1 267

Wine 2 428 2 164 1 957 1 862 1 821 1 960

Total industrial crops 4 266 4 805 4 760 6 154 5 916 5 490


2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Fruit 683 585 456 505 634 639

Tree nuts 233 212 211 240 347 316

Vegetables 487 542 607 712 678 682

Nursery 29 23 20 15 12 20

Other horticulture h 280 274 293 258 224 298

Total horticulture 1 712 1 637 1 588 1 729 1 895 1 955

Other crops and crop products 2 368 2 346 2 461 2 517 2 740 2 843

Total crops 16 361 14 890 17 313 21 592 23 012 21 156

Meat and live animals 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Beef and veal 4 857 3 953 4 328 4 467 4 864 5 150

Live cattle i 538 550 499 412 339 389

Lamb 925 916 1 026 1 060 1 086 1 116



2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Live sheep j 340 298 348 345 194 225

Mutton 482 433 404 362 478 522

Pig meat 124 109 106 100 81 83

Poultry meat 43 36 38 45 43 50

Total meat and live animals 7 309 6 294 6 749 6 791 7 085 7 535

Wool 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Greasy k 1 729 1 773 2 371 2 448 2 255 2 238

Semi-processed 281 238 251 242 210 206

Skins 312 291 426 433 398 383

Total k 2 322 2 303 3 048 3 123 2 862 2 826

Dairy products 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Butter 232 211 252 201 180 195

Cheese 796 715 731 751 784 909

Casein 107 88 53 48 46 49

Skim milk powder 553 352 504 474 467 560

Whole milk powder 475 296 402 378 312 368

Other dairy products 520 427 404 439 440 482

Total 2 683 2 089 2 345 2 292 2 229 2 562

Other livestock and livestock products

2 400 2 217 2 354 2 529 2 764 3 149

Total livestock exports 14 714 12 903 14 496 14 735 14 940 16 072

Total farm exports 31 075 27 793 31 809 36 327 37 952 37 228

Forest products 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Total forest products 2 343 2 270 2 474 2 229 2 042 2 164

Fisheries products 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Tuna 177 118 131 163 163 160

Salmonids 47 30 54 42 25 37


Fisheries products 2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

2013-14 f$m

Other fish 109 110 101 85 70 85

Prawns l - Frozen 81 60 77 65 51 62

Rocklobster - Fresh, chilled, frozen or cooked

462 399 368 387 447 466

Abalone - Live, fresh or chilled 88 100 88 81 79 82

Abalone - Frozen or cooked 50 53 59 57 55 58

Abalone - Prepared or preserved 70 63 65 59 52 53

Scallops m 33 30 15 15 11 13

Pearls 366 244 241 207 152 170

Other fisheries products 44 39 48 65 69 61

Total fisheries products 1 529 1 246 1 248 1 227 1 175 1 245

Total rural exports n 34 946 31 309 35 531 39 782 41 168 40 638a ABARES has revised the calculation method for the value of farm exports series back to 1988-89. b Includes the grain equivalent of malt. c Field peas and cowpeas. d Includes the grain equivalent of wheat flour. e Includes soybeans, linseed, sunflower seed, safflower seed and peanuts. Excludes meals and oils. f ABARES forecast. g Excludes cotton waste and linters. h Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. i Excludes breeding stock. j Includes breeding stock. k On a balance of payments basis. ABS recorded trade data adjusted for changes in stock levels held overseas. l Other prawn products included in other fisheries products. m Includes crumbed scallops. n Derived from farm, forest and fisheries products. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra; Department of Agriculture, Fisheries and Forestry, Canberra

Forest exportsTABLE 18 Volume of forest products exports Australia

Quantity unit 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 s

Roundwood '000 m3 1 045 986 1 377 1 638 1 806 1 516

Sawnwood a - Softwood roughsawn '000 m3 258 283 322 265 198 207

Sawnwood a - Softwood dressed '000 m3 23 18 13 13 13 3

Sawnwood a - Hardwood roughsawn

'000 m3 40 40 37 39 26 20

Sawnwood a - Hardwood dressed '000 m3 17 14 16 30 15 7

Sawnwood a - Total '000 m3 338 355 387 348 252 237

Railway sleepers '000 m3 11 9 9 8 8 8

Wood-based panels - Veneers '000 m3 35 86 90 119 106 52

Wood-based panels - Plywood '000 m3 15 53 24 7 18 36

Wood-based panels - Particleboard '000 m3 6 17 9 5 4 3

Wood-based panels - Hardboard b '000 m3 0 2 1 2 2 2

Wood-based panels - Medium density fibreboard

'000 m3 204 181 130 115 79 52


Quantity unit 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 s

Wood-based panels - Softboard and other fibreboards

'000 m3 14 8 2 5 5 1

Wood-based panels - Total '000 m3 274 345 256 253 214 147

Paper and paperboard - Newsprint kt 5 2 6 19 30 72

Paper and paperboard - Printing and writing

kt 119 112 146 84 132 139

Paper and paperboard - Household and sanitary

kt 37 38 31 39 26 12

Paper and paperboard - Packaging and industrial

kt 630 617 708 887 933 906

Paper and paperboard - Total kt 790 769 890 1 029 1 121 1 127

Recovered paper kt 1 286 1 216 1 444 1 323 1 403 1 506

Pulp kt 21 22 18 31 1 0

Woodchips cd kt 6 166 5 255 4 818 5 064 4 150 3 806a Excludes railway sleepers. b Uncoated hardboard confidential from January 2007. c Includes particles. d Bone dry tonnes. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Engineered Wood Products Association of Australasia

TABLE 19 Value of forest products exports (fob) Australia

Value 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Roundwood 105 101 138 198 175 154

Sawnwood - Softwood roughsawn 63 70 76 67 55 61

Sawnwood - Softwoods dressed 11 9 7 5 3 2

Sawnwood - Hardwood roughsawn 38 37 33 34 23 20

Sawnwood - Hardwood dressed 8 9 10 10 7 6

Sawnwood - Total 120 125 125 115 88 90

Railway sleepers 3 4 2 3 3 3

Miscellaneous forest products a 56 51 59 65 59 57

Wood-based panels - Veneers 19 36 44 52 51 24

Wood-based panels - Plywood 9 4 3 2 2 4

Wood-based panels - Particleboard 4 7 3 2 1 1

Wood-based panels - Hardboard b 0 1 1 2 2 2

Wood-based panels - Medium density fibreboard c

76 52 45 39 26 19


2 1 1 1 1 0

Wood-based panels - Total 109 101 97 98 83 51

Paper and paperboard - Newsprint 3 2 6 13 15 36


Value 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m


133 128 143 88 120 117


106 111 97 94 64 33


395 364 404 552 518 526

Paper and paperboard - Total 635 606 649 747 717 712

Paper manufactures 103 106 102 112 134 134

Recovered paper 252 235 228 240 240 230

Pulp 15 18 13 11 1 0

Woodchips 1 072 997 856 884 729 611

Total 2 471 2 343 2 270 2 474 2 229 2 042a Includes such items as wooden doors, mouldings, packing cases, parquetry flooring, builders carpentry, cork, gums, resins, eucalyptus oils and other miscellaneous wood articles. Excludes wooden furniture. b Uncoated hardboard confidential from January 2007. c Some categories of medium density fibreboard are confidential. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Engineered Wood Products Association of Australasia

Forest importsTABLE 20 Volume of forest products imports Australia

Quantity unit 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 s

Roundwood '000 m3 0.7 1.4 0.9 0.6 1.1 1.3

Sawnwood a - Softwood roughsawn

'000 m3 340.2 255.6 292.6 290.1 239.4 246.6

Sawnwood a - Softwood dressed '000 m3 321.2 278.8 367.3 468.2 469.7 442.7

Sawnwood a - Hardwood roughsawn

'000 m3 59.0 50.5 42.8 42.6 45.9 41.3

Sawnwood a - Hardwood dressed '000 m3 63.5 43.5 45.4 45.4 36.1 28.4

Sawnwood a - Total '000 m3 783.9 628.4 748.1 846.3 791.1 759.0

Wood-based panels - Veneers '000 m3 31.5 21.4 15.4 17.4 14.7 12.6

Wood-based panels - Plywood '000 m3 236.6 199.1 227.7 277.6 292.8 278.7

Wood-based panels - Particleboard '000 m3 99.6 68.7 64.2 71.6 67.8 64.6

Wood-based panels - Hardboard '000 m3 32.1 23.5 33.0 48.5 69.1 59.9


'000 m3 68.8 88.3 69.9 58.0 95.2 79.6


'000 m3 14.3 10.6 6.2 6.5 7.1 5.6

Wood-based panels - Total '000 m3 482.8 411.7 416.4 479.6 546.6 501.0

Paper and paperboard - Newsprint kt 227.6 197.6 190.6 221.5 121.1 84.7


Quantity unit 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 s


kt 1 235.3 1 122.1 1 167.4 1 237.0 1 173.9 1 154.6


kt 81.1 82.0 101.1 113.8 117.7 158.5


kt 303.1 254.0 285.3 313.8 333.1 386.3

Paper and paperboard - Total kt 1 847.1 1 655.7 1 744.4 1 886.1 1 745.8 1 784.1

Recovered paper kt 10.2 3.0 3.4 2.0 2.6 3.7

Pulp kt 388.7 344.7 265.0 233.2 256.1 262.5

Woodchips kt 0.7 0.7 0.7 1.2 1.2 1.2a Excludes railway sleepers. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Engineered Wood Products Association of Australasia

TABLE 21 Value of forest products imports Australia

Value 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Roundwood 1 1 0 1 1 1

Sawnwood - Softwood roughsawn 186 134 140 135 105 100

Sawnwood - Softwood dressed 191 168 200 248 248 246

Sawnwood - Hardwood roughsawn 56 49 39 40 44 41

Sawnwood - Hardwood dressed 58 55 50 50 51 35

Sawnwood - Total 492 405 429 473 448 423

Miscellaneous forest products a 583 651 603 688 741 734

Wood-based panels - Veneers 33 28 22 21 21 19

Wood-based panels - Plywood 153 145 138 170 183 184

Wood-based panels - Particleboard 34 27 20 21 26 22

Wood-based panels - Hardboard 28 26 30 40 54 48


33 41 37 34 36 32


3 4 3 3 3 2

Wood-based panels - Total 284 271 250 289 323 307

Paper and paperboard - Newsprint 185 173 158 176 91 58


1 456 1 468 1 355 1 347 1 217 1 151


137 154 164 185 187 244


470 481 499 515 543 590

Paper and paperboard - Total 2 248 2 276 2 175 2 223 2 037 2 043


Value 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Paper manufactures b 513 590 563 557 486 446

Recovered paper 2 1 1 0 1 1

Pulp 285 263 178 180 164 154

Woodchips 2 2 1 2 2 3

Total 4 412 4 459 4 200 4 412 4 202 4 112a Includes such items as wooden doors, mouldings, packing cases, parquetry flooring, builders carpentry, cork, gums, resins, eucalyptus oils and other miscellaneous wood articles. Excludes wooden furniture. b Includes other paper articles that have had some further processing. s ABARES estimate. Zero used to denote nil or less than $0.5 million.Sources: ABARES; Australian Bureau of Statistics; Engineered Wood Products Association of Australasia

Fisheries exportsTABLE 22 Volume of fisheries products exports Australia

Edible a - Fish 2007-08kt

2008-09kt

2009-10kt

2010-11kt

2011-12kt

2012-13 skt

Live 1.1 1.1 1.0 0.9 0.9 0.8

Tuna 12.6 11.5 9.5 7.8 8.9 8.9

Salmonids 3.0 6.6 4.0 6.4 5.8 2.6

Swordfish 0.2 0.4 0.4 0.4 0.5 0.5

Whiting 1.3 1.4 1.3 1.8 0.9 0.4

Other fish 5.2 5.8 5.4 5.5 5.1 4.7

Total fish 23.4 26.8 21.7 22.7 22.0 17.8

Edible a - Crustaceans and molluscs

2007-08kt

2008-09kt

2009-10kt

2010-11kt

2011-12kt

2012-13 skt

Rocklobster 9.5 9.6 7.7 7.0 6.9 7.8

Prawns 4.9 4.8 4.7 6.4 5.4 3.9

Abalone 3.6 3.3 3.6 3.4 3.1 2.8

Scallops 1.1 1.1 1.1 0.6 0.4 0.4

Crabs 1.4 1.3 1.1 1.0 0.8 0.4

Other crustaceans and molluscs 1.1 1.1 1.0 1.2 1.7 2.1

Total crustaceans and molluscs 21.6 21.2 19.2 19.6 18.4 17.5

Total edible 45.0 48.0 40.9 42.4 40.5 35.3a Includes prepared and preserved. s ABARES estimate.Source: Australian Bureau of Statistics


TABLE 23 Value of fisheries products exports (fob) Australia

Edible - Fish 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Live 42.8 46.5 40.4 33.4 32.0 30.7

Tuna 206.2 176.8 118.5 131.4 162.7 162.6

Salmonids 21.9 47.2 29.6 54.4 41.8 25.4

Swordfish 2.3 3.6 4.2 4.5 4.2 3.9

Whiting 3.0 3.4 3.4 5.0 2.5 1.4

Other fish 47.7 55.7 61.6 58.1 46.2 34.2

Total fish 323.9 333.1 257.8 286.8 289.4 258.1

Edible - Crustaceans and molluscs

2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Rocklobster 400.7 461.6 399.7 369.3 386.7 447.3

Prawns 68.6 82.2 61.5 77.1 66.7 51.8

Abalone 217.2 208.2 216.4 212.0 197.3 185.8

Scallops 27.8 33.3 29.5 15.4 15.3 10.8

Crabs 15.7 16.4 13.8 13.4 11.0 8.2



Total edible 1 064.5 1 144.5 987.1 990.3 1 000.7 1 002.3

Non-edible 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Marine fats and oils 5.5 5.0 4.8 5.4 7.3 10.0

Fish meal 1.0 1.3 2.1 1.6 0.4 1.0

Pearls a 264.0 366.4 243.9 241.3 206.6 151.5

Ornamental fish 1.9 3.4 2.7 2.3 2.3 3.8

Other non-edible 3.9 7.8 5.5 7.3 9.4 6.5

Total non-edible 276.3 384.0 259.0 257.9 226.1 172.8

Total fisheries products 1 340.8 1 528.5 1 246.1 1 248.2 1 226.8 1 175.1a Includes items temporarily exported and re-imported.Source: ABS, International Trade, Australia, cat. no. 5465.0, Canberra


Fisheries importsTABLE 24 Volume of fisheries products imports Australia

Edible a - Fish 2007-08kt

2008-09kt

2009-10kt

2010-11kt

2011-12kt

2012-13 skt

Live fish na na na na na na

Tuna 38.8 38.0 39.9 45.6 40.8 46.9

Salmonids 10.2 10.9 9.8 9.9 10.2 11.9

Hake 6.8 5.7 5.4 6.7 5.3 6.1

Swordfish 0.2 0.2 0.2 0.2 0.2 0.2

Toothfish 0.1 0.1 0.1 0.1 0.1 0.2

Herrings 0.9 0.8 0.9 1.0 0.9 1.8

Shark 0.4 0.5 0.6 0.5 0.5 0.5

Other fish 79.4 77.2 83.3 83.1 86.6 92.8

Total fish b 136.8 133.4 140.3 147.1 144.4 160.5


2007-08kt

2008-09kt

2009-10kt

2010-11kt

2011-12kt

2012-13 skt

Prawns 29.8 26.7 34.5 32.6 37.5 34.8

Lobster 0.8 0.5 0.7 0.9 0.9 0.8

Crabs 1.1 1.0 1.2 1.4 1.5 1.5

Mussels 2.2 2.8 2.4 2.6 2.8 3.7

Scallops 2.5 2.2 2.8 2.6 3.0 3.1

Squid and octopus 15.6 16.8 16.0 15.2 17.0 19.9



Total edible abc 198.3 193.3 207.4 211.8 214.2 228.5a Includes prepared and preserved. b Excludes live tonnage. c Includes other fisheries products not classified to fish or crustaceans and molluscs. na not available. s ABARES estimate.Source: Australian Bureau of Statistics

TABLE 25 Value of fisheries products imports Australia

Edible a - Fish 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Live fish 0.0 0.0 0.0 0.0 0.0 0.0

Tuna 174.1 223.3 169.3 200.8 205.5 258.2

Salmonids 79.1 100.0 85.8 84.4 91.8 118.8

Hake 32.0 31.0 26.1 27.2 20.9 23.4


Edible a - Fish 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Swordfish 1.4 1.5 1.8 1.5 1.2 1.7

Toothfish 0.9 1.0 1.3 1.4 1.3 2.2

Herrings 4.6 4.4 4.5 4.3 4.2 5.1

Shark 4.1 4.5 5.6 4.4 4.0 4.6

Other fish 415.2 455.5 455.0 443.7 459.6 480.0

Total fish b 715.0 824.6 751.5 769.1 788.6 866.5


2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Prawns 250.2 270.7 298.7 291.0 350.9 304.8

Lobster 14.2 9.8 11.8 15.0 16.0 15.3

Crabs 10.3 11.3 12.4 13.3 15.5 16.8

Mussels 9.0 12.0 9.3 10.2 11.7 17.1

Scallops 28.1 29.9 33.5 34.5 43.6 41.1

Squid and octopus 45.6 54.3 62.0 74.3 90.4 97.7



Total edible abc 198.3 193.3 207.4 211.8 214.2 228.5

Non-edible 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Pearls d 166.4 320.6 170.8 166.9 138.2 105.4

Fish meal 41.2 41.9 51.9 46.7 34.2 43.3

Ornamental fish 5.4 5.8 4.6 3.9 3.7 4.0

Marine fats and oils 27.1 33.9 26.8 31.0 39.5 39.1

Other marine products 25.6 24.9 14.9 9.9 17.1 29.0

Total non-edible 265.7 427.1 269.0 258.4 232.8 220.7

Total fisheries products 1 394.3 1 706.5 1 512.9 1 529.7 1 606.6 1 648.3a Includes prepared and preserved. b Includes live value. c Mostly re-imports. d Includes other fisheries products not classified to fish or crustaceans and molluscs. s ABARES estimate. 0.0 is used to denote nil or less than $0.5 million.Source: Australian Bureau of Statistics

Agricultural exportsTABLE 26 Agricultural exports to Japan (fob) Australia a

Farm



2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Winter crops - barley b 234 335 284 260 316 260

Winter crops - canola 70 65 109 41 47 72


Winter crops - wheat c 289 434 498 408 395 392



Summer crops - other grains d 3 2 3 3 3 10


Total grains and oilseeds 638 1 184 1 005 852 1 021 975


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Raw cotton g 47 39 31 48 63 28

Sugar 129 192 190 194 211 213

Wine 49 54 43 44 45 42

Total industrial crops 225 285 264 286 319 283


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Fruit 81 70 61 70 59 63

Tree nuts 13 15 17 16 20 23

Vegetables 42 49 34 47 43 43

Nursery 5 6 4 4 3 3


Total horticulture 146 144 121 143 131 134

Other crops and crop products 44 61 47 54 47 50

Total crops 1 053 1 674 1 437 1 334 1 517 1 442


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Beef and veal 1 794 2 066 1 682 1 667 1 549 1 435

Live cattle i 18 14 15 16 20 15

Lamb 53 67 52 60 63 54

Mutton 28 39 24 26 24 17

Other meat and live animals j 10 5 6 2 2 1



2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m


Wool 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Greasy 0 2 4 9 12 8

Semi-processed 17 12 12 23 26 21

Skins 5 3 1 1 2 1

Total 22 17 17 33 39 30


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Butter 17 11 2 6 9 4

Cheese 427 399 358 356 423 415

Casein 38 44 26 22 21 17

Skim milk powder 10 22 3 2 2 5

Whole milk powder — 0 0 0 1 0


Total dairy product exports 545 521 433 423 500 506

Other livestock exports 394 438 323 339 303 297


Total agricultural exports 3 917 4 841 3 989 3 901 4 017 3 796a ABARES has revised the calculation method for the value of farm exports series back to 1988-89. b Includes the grain equivalent of malt. c Includes the grain equivalent of wheat flour. d Includes grains not separately listed. e Includes oilseeds not separately listed. g Excludes cotton waste and linters. h Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. i Excludes breeding stock. J Includes other meat and live animals not listed separately. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra; Department of Agriculture, Fisheries and Forestry, Export Statistics, Canberra

TABLE 27 Agricultural exports to the United States (fob) Australia a


$m2008-09

$m2009-10

$m2010-11

$m2011-12

$m2012-13 s

$m




Summer crops - other grains c 1 1 1 1 0 0

Summer crops - other oilseeds d 0 0 0 0 0 0



2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Total grains and oilseeds 3 2 12 3 22 53


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Raw cotton e 0 0 0 0 0 0

Sugar 43 66 57 85 119 76

Wine 745 741 619 494 464 448

Total industrial crops 788 808 676 579 583 524


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Fruit 65 60 67 33 33 25

Tree nuts 15 20 22 12 15 28

Vegetables 7 10 8 7 8 6

Nursery 4 4 3 2 2 2

Other horticulture g 19 18 14 16 15 19



Total crops 994 1 095 969 821 819 847


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Beef and veal 925 1 225 817 704 896 960

Lamb 313 354 303 335 305 295

Mutton 45 35 32 38 21 34

Other meat and live animals h 0 0 0 0 0 0


Wool 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Greasy 9 7 9 11 8 7


Skins 0 0 0 0 0 0

Total 11 8 12 14 11 9



2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Butter 10 19 10 3 7 13

Cheese 37 60 20 12 3 11

Casein 42 29 23 13 7 9







Total agricultural exports 2 509 2 969 2 323 2 087 2 203 2 334a ABARES has revised the calculation method for the value of farm exports series back to 1988-89. b Includes the grain equivalent of malt. c Includes grains not separately listed. d Includes oilseeds not separately listed. e Excludes cotton waste and linters. g Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. h Includes meat and live animals not listed separately. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra; Department of Agriculture, Fisheries and Forestry, Export Statistics, Canberra

TABLE 28 Agricultural exports to China (fob) Australia a


$m2008-09

$m2009-10

$m2010-11

$m2011-12

$m2012-13 s

$m


Winter crops - canola 0 21 0 0 0 249

Winter crops - wheat c 22 42 219 144 457 357


Summer crops - other grains d 0 0 1 0 1 6


Total grains and oilseeds 318 300 514 514 1 032 1 283


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Raw cotton g 164 165 274 551 1 812 1 849

Sugar 15 3 4 31 21 2

Wine 62 94 143 185 215 248

Total industrial crops 241 262 421 766 2 048 2 099



2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Fruit 8 6 6 8 10 28

Tree nuts 12 14 8 6 11 36

Vegetables 2 1 6 4 6 4

Nursery 0 0 0 1 1 0




Total crops 607 592 967 1 311 3 133 3 484


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Beef and veal 10 20 17 28 40 406

Live cattle i — 0 5 4 0

Lamb 37 34 34 63 73 108

Mutton 5 9 13 12 14 102

Other meat and live animals j 0 0 0 0 0 1

Total meat and live animals 52 64 69 107 127 616

Wool 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Greasy 1 455 1 328 1 460 1 864 1 925 1 844


Skins 265 271 257 351 369 336

Total 1 748 1 654 1 779 2 235 2 319 2 199


2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Butter 4 3 5 4 7 6

Cheese 18 14 23 30 37 44

Casein 4 5 7 1 1 1








2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m


Total agricultural exports 3 027 2 994 3 558 4 472 6 490 7 269a ABARES has revised the calculation method for the value of farm exports series back to 1988-89. b Includes the grain equivalent of malt. c Includes the grain equivalent of wheat flour. d Includes grains not separately listed. e Includes oilseeds not separately listed. g Excludes cotton waste and linters. h Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. i Excludes breeding stock. j Includes meat and other live animals not listed separately. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra; Department of Agriculture, Fisheries and Forestry, Export Statistics, Canberra

Forestry tradeTABLE 29 Value of Australian forest products trade, by selected countries

Exports 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

China 360 390 394 544 534 474

Hong Kong 54 51 68 42 39 16

Japan 965 860 774 745 579 394

Korea, Rep. of 91 103 48 40 40 34

Malaysia 57 78 82 106 112 75

New Zealand 375 324 319 314 306 268

Taiwan 88 77 88 79 68 68

Imports 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

China 547 611 624 680 797 910

Finland 272 274 171 143 120 205

Germany 178 167 178 183 147 135

Indonesia 336 374 351 332 342 313

Malaysia 209 215 217 228 233 223

New Zealand 790 744 703 715 634 556

United States 289 320 313 285 297 303s ABARES estimate.Source: Australian Bureau of Statistics


Fisheries tradeTABLE 30 Value of Australian fisheries products trade, by selected countries Australia

Exports - Edible (including live)

2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Hong Kong 467 570 530 426 479 317

Vietnam 8 3 4 8 60 293

Japan 328 302 215 226 255 236

China 26 30 43 143 59 45

Singapore 40 44 37 41 42 31

United States 73 65 49 36 23 18

Taiwan 45 54 33 30 18 10

Thailand 8 7 9 16 18 9

New Zealand 12 9 17 10 10 9

Malaysia 8 13 9 13 8 8

Indonesia 4 5 7 9 6 7

Exports - Non-edible 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Hong Kong 128 201 138 145 97 54

Japan 53 64 50 43 44 33

United States 24 22 15 8 22 21

Imports a - Edible (excluding live)

2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Thailand 295 368 322 340 362 400

New Zealand 198 207 212 210 197 206

China 132 152 173 186 231 196

Vietnam 142 167 153 162 174 163

Malaysia 55 65 63 71 73 81

United States 29 49 37 40 45 52

Indonesia 23 31 39 28 36 51

Taiwan 32 33 37 39 39 48

South Africa 24 23 30 28 31 35

Denmark 19 24 24 19 25 32

Norway 21 20 27 25 27 30


Imports a - Edible (excluding live)

2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Other 41 36 36 33 32 36a Country details for non-edible imports are not available. s ABARES estimate.Source: Australian Bureau of Statistics

Food exportsTABLE 31 Food exports by level of transformation Australia

Minimally transformed 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Live animals except fish 761 924 924 924 787 564

Fish or shellfish 646 747 650 667 721 763

Horticulture - Vegetables 137 152 150 166 152 152

Horticulture - Fruit and nuts 433 563 472 368 450 633

Horticulture - Total 571 716 622 534 602 785

Grains a 4 221 6 383 4 632 6 765 8 793 8 585

Oilseeds 346 644 657 973 1 555 2 340

Food nec 41 49 43 50 52 78

Substantially and elaborately transformed

2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Meat - Meat processing 6 506 7 411 6 313 6 887 7 068 7 594

Meat - Poultry processing 32 43 36 38 45 43

Meat - Bacon, ham and smallgoods

33 47 54 57 87 104

Meat - Total 6 571 7 501 6 403 6 983 7 201 7 741

Seafood 420 399 338 324 281 240

Dairy - Milk and cream processing

1 258 1 354 880 1 107 1 065 997

Dairy - Ice cream 37 31 31 33 27 16

Dairy - Cheese 968 796 715 731 751 784

Dairy - Other dairy products 499 497 440 451 422 401

Dairy - Total 2 763 2 679 2 066 2 322 2 264 2 197

Fruit and vegetables 568 575 523 571 625 668

Oil and fat 239 303 289 293 317 326

Flour mill and cereal food - Flour mill products

315 419 365 344 313 347

Flour mill and cereal food - Cereal food and baking mix

287 390 445 614 880 955



2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Flour mill and cereal food - Total 602 809 811 958 1 193 1 301

Bakery products - Bread, cake and pastry

26 25 26 22 22 26

Bakery products - Biscuit 118 127 135 134 129 118

Bakery products - Total 144 152 161 155 150 144

Other food - Sugar a 1 035 1 374 1 924 1 479 1 600 1 439

Other food - Confectionery 237 269 260 252 240 207

Other food - Total 2 366 3 065 3 607 3 091 3 469 3 520

Beverage and malt - Soft drink, cordial and syrup

38 45 55 61 63 61

Beverage and malt - Beer and malt

335 447 406 318 372 378

Beverage and malt - Wine 2 700 2 493 2 188 2 009 1 910 1 867

Beverage and malt - Spirit 86 105 101 97 103 144

Beverage and malt - Total 3 159 3 091 2 750 2 485 2 447 2 450

Total food and beverage - Minimally transformed

6 585 9 462 7 528 9 913 12 510 13 115

Total food and beverage - Substantially transformed

16 508 18 224 16 587 16 836 17 612 18 272

Total food and beverage - Elaborately transformed

324 350 362 346 335 316

Total food and beverage - Total 23 418 28 037 24 476 27 095 30 458 31 703a Includes ABARES estimates where ABS confidentiality restrictions apply. nec not elsewhere classified. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics

Food importsTABLE 32 Food imports by level of transformation Australia

Minimally transformed 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Live animals except fish 1 2 1 2 1 1

Fish or shellfish 65 67 72 73 67 72

Horticulture - Vegetables 53 49 58 76 64 72

Horticulture - Fruit and nuts 216 225 262 245 290 285

Horticulture - Total 269 274 320 322 354 356

Grains 2 2 3 4 6 8

Oilseeds 49 49 36 36 41 46

Food nec 188 224 228 304 348 300



2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Meat - Meat processing 381 525 497 478 493 540

Meat - Poultry processing 0 0 0 0 0 0

Meat - Bacon, ham and smallgoods

50 68 82 90 112 119

Meat - Total 431 593 579 567 606 659

Seafood 1 095 1 249 1 201 1 231 1 348 1 400

Dairy - Milk and cream processing 67 69 66 72 75 61

Dairy - Ice cream 37 39 40 44 45 45

Dairy - Cheese 377 365 360 398 408 388

Dairy - Other dairy products 176 157 150 180 227 195

Dairy - Total 656 631 615 694 755 689

Fruit and vegetables 1 386 1 556 1 361 1 478 1 742 1 631

Oil and fat 489 578 485 517 516 522

Flour mill and cereal food - Flour mill products

66 83 66 48 53 60

Flour mill and cereal food - Cereal food and baking mix

462 576 577 523 504 534

Flour mill and cereal food - Total 527 659 643 572 557 594

Bakery products - Bread, cake and pastry

175 197 191 222 242 282

Bakery products - Biscuit 162 179 178 191 206 229

Bakery products - Total 337 376 369 413 448 511

Other food - Sugar 22 44 71 125 95 73

Other food - Confectionery 438 518 525 547 576 588

Other food - Food nec 1 221 1 430 1 396 1 460 1 583 1 745

Other food - Total 1 681 1 992 1 992 2 131 2 255 2 406

Beverage and malt - Soft drink, cordial and syrup

697 791 798 818 898 928

Beverage and malt - Beer and malt

161 226 212 196 219 274

Beverage and malt - Wine 454 502 477 490 554 602

Beverage and malt - Spirit 491 530 538 544 571 568

Beverage and malt - Total 1 802 2 050 2 026 2 048 2 243 2 373

Total food and beverage - Minimally transformed

573 618 660 741 818 784

Total food and beverage - Substantially transformed

8 008 9 254 8 836 9 205 9 989 10 271



2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13$m

Total food and beverage - Elaborately transformed

396 429 434 445 481 515

Total food and beverage - Total 8 978 10 301 9 930 10 391 11 288 11 569a Includes ABARES estimates where ABS confidentiality restrictions apply. nec not elsewhere classified. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics

Food tradeTABLE 33 Total food exports, by selected destination Australia

Country 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Canada 402 380 335 332 328 339

China 917 1 178 1 426 1 550 2 076 2 918

Egypt 174 315 266 402 387 344

Germany 162 153 109 263 262 197

Hong Kong 857 1 082 997 890 1 024 912

Indonesia 1 702 2 652 2 129 2 288 2 271 2 330

Japan 4 553 5 517 4 278 4 213 4 415 4 212

Korea, Rep. of 1 655 1 873 1 925 1 995 2 314 2 152

Malaysia 799 1 231 853 851 879 923

New Zealand 1 303 1 406 1 323 1 300 1 393 1 396

Philippines 308 563 318 503 679 642

Saudi Arabia 1 144 1 020 566 500 842 691

Singapore 712 792 722 742 799 788

Taiwan 574 671 613 627 628 632

Thailand 393 626 424 539 725 563

United Arab Emirates 445 567 528 581 600 839

United Kingdom 1 136 1 005 784 685 614 598

United States 2 552 3 054 2 379 2 165 2 285 2 424

Other 3 631 3 951 4 503 6 670 7 936 8 805

Total 23 418 28 037 24 476 27 095 30 458 31 703s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics


TABLE 34 Total food imports, by selected source country Australia

Country 2007-08$m

2008-09$m

2009-10$m

2010-11$m

2011-12$m

2012-13 s$m

Brazil 129 150 110 148 176 126

Canada 220 268 234 219 210 185

China a 617 754 708 750 841 835

France 278 281 281 297 332 382

India 156 175 164 167 222 212

Indonesia 158 202 189 191 190 212

Ireland 536 559 585 252 89 77

Italy 436 494 463 430 469 487

Malaysia 354 459 392 455 456 424

Netherlands 182 220 197 200 275 311

New Zealand 1 671 1 684 1 801 1 895 2 047 2 060

Papua New Guinea 36 45 44 57 59 37

Singapore 155 205 194 539 792 797

Spain 173 153 186 171 158 172

Thailand 547 702 689 759 741 784

United Kingdom 295 314 331 324 347 382

United States 803 994 893 959 1 139 1 231

Vietnam 250 297 280 303 344 328

Other 1 981 2 346 2 191 2 275 2 401 2 527

Total 8 978 10 301 9 930 10 391 11 288 11 569a Excludes imports from Hong Kong. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics


Report extractsABARES reports released since Agricultural commodities (vol. 3 no. 2 June quarter 2013)Following is a selection of ABARES reports released since publication o f Agricultural commodities in June 2013. A brief description of the nature of each report is provided. While not comprehensive, the selection provides an overview of the range of interests ABARES covers.

All reports can be downloaded from daff.gov.au/abares/publications.

For more information contact [email protected].

Research reportsAustralian lamb: financial performance of slaughter lamb producing farms, 2010-11 to 2012-13

Research report 13.7

Publication date: 26 June 2013Authors: Tim Caboche and Therese Thompson

Around 18 800 Australian broadacre farms sell more than 200 lambs for slaughter. These farms are classified as slaughter lamb producers in this report. Most of these farms are mixed enterprise, deriving a substantial proportion of their receipts from cropping, beef cattle, sheep and wool, as well as from the sale of slaughter lambs.



http://daff.gov.au/abares/publications

Australian beef: financial performance of beef cattle producing farms, 2010-11 to 2012-13


Publication date: 24 July 2013Authors: Peter Martin, Paul Phillips, Robert Leith and Tim Caboche

This report was commissioned by Meat & Livestock Australia and expands on results published in Agricultural commodities, March quarter 2012 released at the ABARES Outlook 2012 conference and the Australian farm survey results 2010-11 to 2012-13 report released in April. It presents detailed financial performance and production information for Australian beef cattle producing farms from 2010-11 to 2012-13.

Australian dairy: financial performance of dairy producing farms, 2010-11 to 2012-13


Publication date: 24 July 2013Authors: Surya Dharma and Astrid Dahl

This report provides results at a regional level of financial performance, management practices and productivity of dairy producing farms. It presents results from ABARES annual Australian Dairy Industry Survey (ADIS). The report expands on farm survey results published in Agricultural commodities, March quarter 2013, and Australian farm survey results 2010-11 to 2012-13, both released at the ABARES Outlook 2013 conference. ABARES conducted the ADIS between July and November 2012, covering 2011-12 and projections for 2012-13.


Australian grains: financial performance of grain producing farms 2010-11 to 2012-13


Publication date: 25 July 2013Authors: Haydn Valle, Milly Lubulwa, Walter Shafron and Astrid Dahl

This research report presents results from ABARES annual Australian Agricultural and Grazing Industries Survey (AAGIS) conducted between July and December 2012. The report focuses on information obtained from grain cropping farm businesses included in the AAGIS. This survey provides data on the financial performance of broadacre farm businesses and their associated production characteristics. The survey also provides the main means of monitoring and analysing productivity growth in the grains industry sector.

Technical reportsAustralian Agricultural Environments—Regions for common practice assessments

Technical report 13.04

Publication date: 2 August 2013Authors: Jasmine Richards, James Walcott and Rob Lesslie

ABARES has developed 18 Australian Agricultural Environments (AAEs) to stratify survey collection and analysis for the ABS Land Management Practices Survey (LaMPS). The AAEs


differentiate broad environmental, land use and land management patterns across Australia's agricultural landscapes. The regionalisation combines ABS statistical units with agro-ecological regions. The AAEs have been specifically developed to stratify data collection and analysis for the LaMPS.

Ground cover monitoring for Australia: progress report July 2011 to June 2012

Technical report 13.05

Publication date: 30 August 2013Authors: Jane Stewart, Jasmine Rickards and Lucy Randall

DAFF funded a four-year project (2009-2013) to monitor ground cover for Australia using remote sensing. The project provided regular ground cover information to assess environmental targets for soil erosion and land management in Australia. This progress report gives the achievements of the project from July 2011 to June 2012 and tasks continuing in 2013.

Other reportsAustralian crop report

Publication date: 10 September 2013

The quarterly report forms a consistent and regular assessment of crop prospects for major field crops, forecasts of area, yield and production and a summary of seasonal conditions on a state-by-state basis.


Australian ground cover reference sites database package

Publication date: 7 August 2013

The database package includes observations collected at ground cover reference sites between July 2010 and February 2013 and instructions for using the data. The data and supporting documentation are updates to the Australian ground cover reference sites database ABARES published in June 2012. The database is being used to calibrate, validate and improve vegetation fractional cover products derived from remote sensing.

Technical review for the Commonwealth Policy on Fisheries Bycatch: risk-based approaches, reference points and decision rules for by-catch and by-products species

Publication date: 25 June 2013Authors: Andrew Penney, David Kirby, Katherine Cheshire, Michelle Wilson and Shalan Bray

This report was developed for the Fisheries Research and Development Corporation. It reviews recent developments in methodology and implementation of risk-based and low-information analytical approaches to assessment of by-catch and by-product species.

A methodology for obtaining regular, statistically robust estimates of recreational and charter fishing catch of Southern Bluefin Tuna in Australian waters

Publication date: 25 June 2013Authors: Peter Ward and Phil Sahlqvist

This report was developed for the Recreational Fishing Industry Development Strategy. The project was primarily a response to a Wildlife Trade Operation condition for the Southern Bluefin Tina Fishery. It involved a workshop at which participants reviewed data collection programs for recreational fisheries, evaluated future monitoring methods and identified a preferred methodology for routinely estimating the national recreational catch. The project resulted in a collaborative funding application to further develop and test the proposed methodology, which was funded by Fisheries Research and Development Corporation, DAFF and the New South Wales Recreational Fishing Trust.

Who's involved with weeds? A social network analysis of funding and information networks for weed management

Publication date: 26 June 2013Authors: Lyndal-Joy Thompson, Heleen Kruger and Charlene Trestrail

This report was developed for the Rural Industries Research and Development Corporation. It examines networks for managing weeds in Australia, in particular networks providing funding and information through the weed governance system. The research employed a social network analysis approach to investigate where community groups and institutions obtain weed management information and funding.


Farmers' response to weather variability: a state-contingent approach using farm-level data

Conference paper

Publication date: 28 June 2013Authors: Thilak Mallawaarachchi (ABARES and University of Queensland), Céline Nauges (University of Queensland), Orion Sanders (ABARES) and John Quiggin (University of Queensland)

This paper was presented at the twentieth annual conference of the European Association of Environmental and Resource Economists in France. It is an investigation of competing frameworks for modelling decision-making under uncertainty in the context of dairy irrigation in the Murray, Goulburn, and Loddon-Avoca regions in the Murray-Darling Basin. Using data from the ABARES irrigation survey for 2006-07 to 2009-10, two milk production technologies are estimated under competing frameworks: stochastic production and state-contingent production.


ABARES contactsPosition/Dept Name Email address Phone number

Executive Director Paul Morris [email protected] (02) 6272 4636

Chief Economist Michael Harris [email protected] (02) 6272 2222

Chief Scientist Kim Ritman [email protected] (02) 6272 4671

Adaptation and BiosecurityPosition/Dept Name Email address Phone number

Assistant Secretary Helal Ahammad [email protected] (02) 6272 2366

Biosecurity and Climate Edwina Heyhoe [email protected] (02) 6272 2109

Change Economics - Climate Impact Sciences

Matthew Miller [email protected] (02) 6272 3527

Change Economics - Invasive Species

Bertie Hennecke [email protected] (02) 6272 4263

Change Economics - Mitigation and Adaptation Sciences

Kate Harle [email protected] (02) 6272 3347

Agricultural Commodities and TradePosition/Dept Name Email address Phone number

Assistant Secretary and Chief Commodity Analyst

Jammie Penm [email protected] (02) 6272 2030

Agricultural Trade Caroline Gunning-Trant

[email protected]

(02) 6272 2123

Agricultural Commodities Peter Collins [email protected] (02) 6272 2017

Commodities Data Dianne Stefanac [email protected] (02) 6272 2311

Research Engagement and Outlook

Anna Carr [email protected] (02) 6272 2287

Spatial Information Standards and Implementation

Evert Bleys [email protected] (02) 6272 5627

Farm Analysis, Productivity and Social SciencesPosition/Dept Name Email address Phone number

Assistant Secretary Peter Gooday [email protected] (02) 6272 2138

Productivity Alistair Davidson [email protected] (02) 6272 2487

Social Sciences Saan Ecker [email protected] (02) 6272 5930

Infrastructure Tim Goesch [email protected] (02) 6272 2009

Farm Analysis Milly Lubulwa [email protected] (02) 6272 2069

Survey Collection John Gray [email protected] (02) 6272 5381

Fisheries and Quantitative Sciences























Position/Dept Name Email address Phone number

Assistant Secretary Ilona Stobutzki [email protected] (02) 6272 4277

Domestic Fisheries and Marine Environment

Andrew Penney [email protected] (02) 6272 3726

International Fisheries James Larcombe [email protected] (02) 6272 3388

Fisheries Economics Robert Curtotti [email protected] (02) 6272 2014

Quantitative Sciences Belinda Barnes [email protected] (02) 6272 5374

Natural ResourcesPosition/Dept Name Email address Phone number

Assistant Secretary David Cunningham

[email protected] (02) 6272 5954

Forest Sciences Steve Read [email protected] (02) 6272 5582

Forest Economics Beau Hug [email protected] (02) 6272 3929

Land Use and Management

Phil Pritchard [email protected] (02) 6272 4193

Library Resources Steve Benson [email protected] (02) 6272 4548

Production, Online and Design

Lawrence Gardner

[email protected] (02) 6272 2290

Media — [email protected] (02) 6272 3232

Publication inquiries — [email protected] (02) 6272 2010

Agricultural commodities September quarter 2013was designed and produced by the Department of Agriculture, Fisheries and Forestry and the Agricultural Commodities team of ABARES.

Editors: Jenny Cook and Julia Church















The 'Biosphere' Graphic Element

The biosphere is a key part of the department's visual identity. Individual biospheres are used to visually describe the diverse nature of the work we do as a department, in Australia and internationally.

Also in this series

Agricultural commodities, June 2012

Agricultural commodities, September 2012

Agricultural commodities, December 2012

Agricultural commodities, March 2013

Agricultural commodities, June 2013

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Postal address: GPO Box 1563 Canberra ACT 2601

Switchboard: +61 2 6272 2010

Facsimile: +61 2 6272 2001

Email: [email protected]

Web: daff.gov.au/abares

daff.gov.au/abares





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