ABARES has provided forecasting services for agriculture since 1948. With production decisions often made before prices are known, forecasts help farmers manage risk. Consumers benefit through the availability of high quality and reasonably priced food. Providing information on expected prices also helps to ensure that markets operate fairly. In addition, forecasts are used to identify and form policy responses to emerging issues.
ABARES is continually improving its forecasting services in response to changing demand, and welcomes feedback on their future design.
A new approach is needed
A challenge for ABARES medium-term forecasts of agricultural markets is that no reliable seasonal climate forecasts exist beyond the current growing season in southern Australia.
To date, ABARES has addressed this problem by assuming a return to average seasonal conditions.
This assumption poorly reflects the seasonal conditions actually faced by Australia's agricultural industries and it ignores the fact that climate variability has an impact on expected medium-term production.
This paper reports on the results of an update to the way ABARES calculates the farmers' terms of trade (FToT) indicators. This includes updates to the price indexes for farm outputs and inputs to production, and measures of farm costs and net farm returns. These indicators are used together with other data and information to monitor the performance of the agricultural sector.
The last major update of the FToT was conducted in 2004–05. This update seeks to address data availability and quality concerns, which have arisen gradually over time. The aim of this update is to improve the accuracy of the indicators and to ensure the ongoing delivery of the FToT indicators. Data sources were reviewed and outputs consolidated where necessary.
Published: 3 March 2020.
This reports says that public reporting of national grain stocks in years of drought can help grain consuming businesses work out whether and when to invest in the cost of importing. The project extended the methodology used to produce the Australian Crop Report to validate ABARES forecasts of consumption and stocks.
ABARES concluded that public reporting of national grain stocks in years of drought can help grain consuming businesses work out whether and when to invest in the cost of importing. However, in years conducive to crop production and exports, it is not efficient for ABARES to commit additional resources to estimating grain consumption and stocks.
Published: 20 November 2019
The Summary of ABARES agricultural forecasting paper analyses the performance and accuracy of ABARES agricultural forecasts in the Australian crop report and Agricultural commodities publications between 2000–01 and 2017–18.
Historically, ABARES September forecasts have an average forecast error of: 11 per cent for total winter crop production, 2 per cent for total meat production, 10 per cent for global indicator prices averaged across major commodities, 6 per cent for the total value of agricultural exports and 15 per cent for export volumes across commodities.
Published: 13 June 2019
This report explores what the forecasting services provided by ABARES should look like into the future. The operating and policy context of Australian agriculture has changed dramatically since the Bureau of Agricultural Economics was established in 1945. This report explores whether ABARES forecasting services have adapted to these changes, and what changes still need to be made.
The report argues that ABARES should work more closely with users to tailor forecasts to policy and commercial applications. ABARES forecasting methods and services should become more participatory, and adapting them to new policy and business issues as they emerge. ABARES forecasting services should evolve towards a complementary focus on foresighting to help governments and industry manage longer-term global change.
Published: 21 November 2018