Wine, veal, dairy exports tipped to rise

The latest ABARES agricultural outlook tips Australia's farm production to achieve a record $49 billion in the 2013/14 financial year.

Sales of Australian wines to overseas buyers are expected to grow, with China's insatiable thirst for local drops helping drive the rosier outlook.

Export earnings for wine are forecast to increase by nearly 10 per cent in the 2013/14 financial year, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has found.

The latest quarterly ABARES Agricultural Commodities report, released on Tuesday, also predicts a six per cent rise in beef and veal exports and a whopping 15 per cent boost to dairy earnings.

ABARES executive director Paul Morris said wine exports were susceptible to the state of the global economy, and the slowdown in developed countries had affected sales in recent years.

Ten years ago China imported virtually no wine from Australia, but has since grown to become the third-largest destination for local reds and whites.

"The growth in that market is going to be reflected in terms of those higher returns (for Australian producers)," Mr Morris told AAP on Tuesday.

Exports to the US and UK - the number one and two markets for local wines respectively - are also expected to pick up over the financial year.

ABARES predicts Australia's gross value of farm production will hit a record $49 billion in 2013/14, with better rainfall boosting crop yields and improved global prices driving higher demand for some commodities.

It's the fourth straight year of stronger returns for the farm sector, after a difficult decade marked by drought and adverse seasonal conditions.

By comparison, total farm production in 2009/10 was $39.7 billion, about $10 billion less than what ABARES expects for this financial year.

The value of exports overall has dipped slightly to $37.2 billion, but historically that's not bad considering the record high $38 billion achieved last year.

Mr Morris said it's not all good news, with cattle graziers in Queensland's western regions still dealing with very dry conditions, and a patchy outlook for some West Australia producers.

There's also a decline forecast in grain and oilseeds returns, driven by lower world prices as key competing markets in the US and Russia start to recover from a bad dry spell.

Mr Morris said the exchange rate also had a big impact, with the outlook for the Australian dollar revised down since ABARES' last report in June.

Then, the assumption was the Aussie would stay around 98 cents to the US dollar, but now ABARES predicts it will hover around the 92-93 cent mark for the remainder of the year - adding over $1 billion to Australia's export forecast.

For farmers relying on exports, the lower dollar means higher returns and a leg up over importers competing locally, but also increases some input costs like machinery, fuel and fertiliser.

"But overall the lower dollar is good news for farmers in terms of their ability to compete against other suppliers," Mr Morris said.

Source AAP

Stay up to date with SBS NEWS

  • App
  • Subscribe
  • Follow
  • Listen
  • Watch