Broadly optimistic for 2024

Andrew Smith, the head of Agribusiness Development at Rural Bank. Picture: CONTRIBUTED.

Winter crop production in Queensland plummeted in 2023, according to the Rural Bank, with just 400,000 tonnes of grain delivered to GrainCorp’s receival sites compared with 2.1 million tonnes the season before.

Widespread rain through November however will, hopefully, allow growers to plant summer crops and give them the chance to offset poor returns from last year’s winter crop.

According to the Rural Bank Australian Agriculture Outlook report for 2024, Queensland’s cattle prices are expected to continue the recent trend through the past month and edge marginally higher.

It says cattle slaughter is also expected to increase on the back of strong supply available on local markets however, with most processing centres booked out months in advance, significant growth in rates may be limited.

To the wool industry now where stability could be the defining feature for 2024.

The report says economic conditions for consumers are set to keep demand for wool constrained, with any price improvement likely coming from a small decline in production resulting from dry conditions.

With prices set to remain below average, the high cost of shearing continues to challenge wool growers.

The Northern Regional Indicator sat at 1214c/kg at the end of November, 9.1 per cent lower year-on-year and 17.9 per cent below the five-year average.

Queensland milk production, meanwhile, is expected to stabilise at about 280 to 285 million litres in the 2024/25 season following six seasons of declining production.

Opening farmgate milk prices are expected to fall from record highs in 2023/24 where Norco is offering 88c/litre.

Macadamia output for the 2023 season is estimated at 48,500 tonnes in shell by the industry body.

This is well down from the almost 53,000 tonnes produced last season.

The lowest farmgate prices in more than a decade and significant farm costs are key factors heading into the 2024 season. The Rural Bank estimates production will return above 50,000 tonnes in 2024.

Table grape production will reach near record levels this season. This strong forecast is a result of favourable conditions and low water costs. Dry weather through until harvest will ensure grapes are higher quality than last season.

The Rural Bank expects a more favourable economic environment to begin supporting agricultural markets in the back half of 2024.

The report finds vagriculture encountered a challenging environment in 2023, with drier weather leading to lower crop production but contributing to significantly higher cattle production and record lamb production as producers turned off stock in response.

Rural Bank head of Agribusiness Development Andrew Smith said: “As was the case for 2023, the three key themes that will impact Australian agriculture in the first half of 2024 continue to be seasonal conditions, trade conditions and economic headwinds.

“But, looking to the upside, a more favourable economic environment is expected to begin supporting agricultural markets in the back half of 2024.

“Another positive is the forecast breakdown of both the El Niño and IOD climate drivers that will hopefully see a return to more average conditions for eastern Australia.

“(This will) benefit the cropping sector for winter sowing and lift horticultural production in the first half of the year off the back of more favourable conditions for fruit and vegetable crops and lower irrigation costs.

“We expect to see growing export demand for grains and horticultural produce along with rising beef production and further opportunities for export growth in the red meat sector, improving the outlook for Australian producers in the first half of 2024.

“Lower lamb prices should also keep export volumes closer to current levels, but we see further appetite for lamb returning as retail prices trend lower, boosting domestic consumption, with prices likely to improve for producers in the new year.“

The Australian Agriculture Outlook report for 2024 found that improving trade conditions throughout the back half of 2023 and normalising supply chains were a positive and would continue to support Australian agricultural exports through the first half of 2024.

Mr Smith said, however, economic headwinds would again challenge agribusiness in the first half of 2024, with slow economic growth in the EU and US expected to affect global consumption.

Farm input costs are also forecast to remain stubbornly above long-term averages.

“Seasonal labour costs continue to remain high with no relief in sight,“ Mr Smith said.

“Elevated fertiliser and diesel prices will similarly continue to keep the cost of production high, driven by expensive gas used in fertiliser production, volatile oil production and a low Australian dollar.“

Fast Facts:

* Lower commodity prices impacted Australian farmers in 2023, while improved labour supply and lower fertiliser costs provided some relief, but margins continue to remain tight.

* Export demand continued to rebound across the cropping and horticulture sectors, though demand for livestock and wool remained subdued, primarily due to economic pressures.

* Ongoing economic challenges, the prospects of a hotter summer, and below average commodity prices are weighing on the outlook for the first half of 2024.