Click here to read the full report covering the eight key aspects of Australian agriculture.
The place of agriculture in Australia
Australian agriculture represents:
- 55% of Australian land use (427 million hectares, excluding timber production in December 2020) and 25% of water withdrawals (3,113 gigalitres used by agriculture in 2018-19)
- 11% of exports of goods and services in 2019-20
- 1.9% of value added (GDP) and 2.6% of employment in 2019-2020
Australia’s mix of agricultural activities is determined by climate, water availability, soil type and proximity to markets. Cattle grazing is widespread and occurs in most parts of Australia, while crops and horticulture are generally concentrated in areas relatively close to the coast (Figure 2).
Agricultural production increases
Australia has a diverse agriculture, fisheries and forestry sector, producing a range of plant and animal products (Figure 3). The gross value of agricultural, fisheries and forestry production has increased by 7% over the past 20 years in real terms (adjusted for consumer price inflation), from around $ 62 billion in 2000-2001 to $ 67 billion in 2019-2020.
The drivers of production growth over the past 20 years vary by sector:
- In crops, long-term declines in real prices were offset by volume growth as producers improved their productivity by adopting new technologies and management practices.
- In livestock, rising prices have been the main driver of growth, reflecting growing demand for protein in emerging countries as well as some temporary factors, such as drought in the United States and epidemics such as African swine fever. in meat-importing countries.
About 70% of agricultural production is exported
Australia exports around 70% of the total value of agricultural, fisheries and forestry production. The export orientation of each industry may vary depending on the type of product. Wheat and beef, which are important sectors, are more export oriented than dairy products, horticulture and pork (Figure 9).
In real terms, the value of agricultural exports has fluctuated between $ 40 billion and $ 60 billion since 2000-01. Meat and live animals was the fastest growing export segment, growing 86% during the period, followed by horticulture up 64% and forest products up 16%. %.
Global agricultural demand is increasing very sharply, reflecting rising per capita incomes as well as population growth, but export competition is also increasing. Asia is the fastest growing export region for Australia’s agriculture, fishing and forestry sectors.
- Exports to Australia’s eight largest markets in Asia grew 62% to $ 33 billion over the past 20 years through 2019-2020 and accounted for 62% of the total value of agricultural, fisheries and forestry exports in 2019-2020.
- China is Australia’s largest export market for agriculture, fisheries and forestry products, with $ 16 billion in 2019-2020. Exports to China are about 5 times greater than they were in 2000-2001.
- Asian demand is expected to double between 2007 and 2050, providing opportunities for exporters of high-value, high-quality agricultural and food products.
Agriculture resisted despite COVID-19 uncertainty
COVID-19 was a major event for Australia’s agriculture, forestry and fishing sector in 2019-2020, but the sector has demonstrated its ability to adapt and transition to new opportunities ( Greenville, McGilvray & Black 2020).
Because food is an essential good, demand does not decrease significantly in times of crisis, although the types of goods demanded during the pandemic have shifted from high-value products typically consumed in the hospitality sector ( for example, wine and seafood) to foods consumed at home. Disruptions to domestic and international food supply chains in early 2020 have been largely resolved, allowing agricultural trade to remain resilient during the pandemic. International food processors continued to operate and demand Australian products as inputs; and the resurgence of international manufacturing of textile and wood products has strengthened the export demand for these products throughout 2020-2021.
One of the enduring challenges of COVID-19-related travel restrictions has been the reduced availability of overseas farm workers and higher air freight costs for high-value exporters. Horticulture, some intensive production and meat processing industries were most affected by the reduced number of foreign workers. The result has been an increase in production costs for these industries and potentially a decrease in horticultural production, as growers have difficulty harvesting. Exports of high-value and highly perishable products, such as live seafood and fresh produce, have also experienced cost increases due to the reduced supply of cargo space on flights to major markets of the United States. ‘export.