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ABARES tips 6pc fall in beef prices for 2012-13

Beef Central, 11/12/2012

The Australian weighted average saleyard price for cattle is forecast to fall by 6pc in 2012-2013 to 310c/kg dressed weight, according to the Australian Bureau of Agriculture and Resource Economics and Sciences.

The forecast, contained in ABARES’ December 2012 Ag Commodities report released this morning, reflects falling demand for young restocker cattle, and an increase in supply of finished cattle for processing.

On the positive side of the ledger export demand is expected to increase in the United States and many smaller markets including Taiwan, the Middle East and China.

However, this is offset by expectations that shipments to Japan and Korea will continue to decline as US beef increases its share of the key markets.

To view the full report in click here

The report predicts that the overall value of Australia’s agricultural and natural resources-based products will remain strong in 2012-13, but marginally lower than the high achieved last financial year.

The gross value of Australia’s agricultural, fisheries and forestry production is forecast to be around $46.9 billion in 2012-13, a decline of 4 per cent from $48.9 billion in 2011-12.

ABARES Executive Director Paul Morris said that continued strong performance of rural exports is supporting this outlook, with the value of agricultural, fisheries and forestry exports forecast to be around $39.5 billion in 2012-13, compared with a recent high of $39.9 billion in 2011-12.

“For farm exports, the value is forecast to be around $36 billion in 2012-13, slightly lower than a high of $36.4 billion in 2011-12,” Mr Morris said.

“If achieved, farm export earnings in 2012-13 will be around 24 per cent higher than the average of $29 billion (in nominal terms) recorded over the five years to 2010-11.”

Based on ABARES preliminary projections, farm cash income for broadacre farms is projected to remain relatively high at an average of $110,000 per farm in 2012-13, down slightly from $111,400 per farm estimated for 2011-12.

If achieved, broadacre farm cash income in 2012-13 would be around 32 per cent above the 10 year average to 2011-12 of around $83,000 (in real terms).

Key points

  • The total value of Australian agricultural, fisheries and forestry exports is forecast to be around $39.5 billion in 2012-13, marginally lower than the recent high of $39.9 billion in 2011-12.
  • Farm export earnings are forecast to decline by 1.3 per cent in 2012-13 to $36 billion, following an increase of 15 per cent in 2011-12 to $36.4 billion. This forecast of farm export earnings in 2012-13 is higher than the forecast of $35.2 billion released by ABARES in the September edition of Agricultural commodities.
  • Although marginally lower than in 2011-12, farm export earnings in 2012-13 are forecast to be around 24 per cent higher than the average of $29 billion recorded over the five years to 2010-11.
  • Export earnings from crops are forecast to remain largely unchanged in 2012-13 at around $22 billion, following a rise of 25.3 per cent in 2011-12.
  • Export earnings from forest products are forecast to increase by 2.3 per cent to $2.3 billion in 2012-13, following a decline of 9.9 per cent to $2.2 billion in 2011-12.
  • Export earnings from fisheries products are forecast to remain largely unchanged at around $1.2 billion in 2012-13, following a decline of 1.7 per cent in 2011-12.
  • The gross value of farm production is forecast to decline by 4 per cent in 2012-13 to $46.9 billion, after rising by 2.4 per cent to $48.9 billion in 2011-12.
  • The gross value of crop production is forecast to decline by 2.4 per cent to $27 billion in 2012-13, after increasing by 3.6 per cent to $27.7 billion in 2011-12. The gross value of livestock production is forecast to decline by 6 per cent to $19.9 billion in 2012-13, following an increase of 0.8 per cent to $21.2 billion in 2011-12.
  • Based on ABARES' preliminary projections, farm cash income for broadacre farms is to remain relatively high at an average of $110 000 per farm in 2012-13, down slightly from $111 400 per farm estimated for 2011-12. If achieved, this would be around 32 per cent above the 10 year average to 2011-12 of around $83 000 (in real terms).
  • Average farm cash income for Australian dairy farms is projected to decline to around $92 000 per farm in 2012-13, about 8 per cent below the average for the 10 years to 2011-12 (in real terms).
  • It is noteworthy that the above farm cash income projections are preliminary. ABARES will release updated projections of farm cash incomes in the March 2013 issue of Agricultural commodities.
  • According to ABARES preliminary farm survey data, average debt for broadacre and dairy farms increased by around 4 per cent in 2011-12, similar to the increase recorded in 2010-11. This compares with a doubling of average debt per farm for these two sectors between 2000-01 and 2006-07 (in real terms).

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