Agricultural overview

The gross value of agricultural production is forecast to rise by $3.7 billion to $86.2 billion in 2024–25 ($92.1 billion including fisheries and forestry production), the third highest result on record. The overall increase is driven by higher livestock and livestock product values ($2.9 billion higher) due to both higher prices and production. The gross value of crop production is also forecast to rise in 2024–25 ($760 million higher) as higher domestic production more than offsets falling prices (Figure 1.1).

Figure 1.1 Annual value, volume, and price of agricultural production

The forecast for total farm production values in 2024–25 has been revised up by around $2.6 billion from the June 2024 Agricultural Commodities Report. Improved seasonal conditions have led to upward adjustments to crop production and livestock prices. Crop production values have been revised up by around $390 million reflecting an improvement in production volumes. Livestock and livestock products have been revised up by $2.2 billion due to an upwards adjustment to saleyard prices and production for beef and lamb. No revisions have been made to the value of fisheries and forestry production since the June 2024 Agricultural Commodities Report.

Higher prices driving up the value of livestock and livestock products

Livestock prices are expected to rise in 2024–25, reflecting strong global demand and constrained global supply. Elevated export prices for beef, lamb and mutton – combined with higher domestic processing capacity – is expected to increase competition between processors in saleyards, driving a strong recovery in livestock prices in 2024–25. Beef and lamb saleyard prices are forecast to rise by 29% and 24% respectively.

Livestock production volumes are expected to rise with increased turn-off, driven by strong global demand and price recovery from the lows in 2023–24. These factors are forecast to outweigh improved seasonal conditions and greater pasture availability, which incentivise some producers to rebuild herds and flocks. Beef and veal production volume is forecast to rise by 2% in 2024–25, and sheep meat production volumes are expected to rise by 3%.

The gross value of production for livestock and livestock products is forecast to increase by $2.9 billion (8%) to $37.6 billion in 2024–25, driven by increases across most major commodity categories (Figure 1.3):

• Beef, veal, and live cattle production values rising by $2.6 billion to $16.3 billion.
• Sheep meat and live sheep production values rising by $810 million to $5.2 billion.
• Pigs, poultry, and eggs production values rising by $150 million to $7.2 billion reflecting higher production more than offsetting slightly lower prices.
• Milk production values are forecast to fall by $570 million to $5.5 billion, mainly reflecting lower farmgate milk prices.
• Wool production value is forecast to fall by $90 million to $2.7 billion driven by lower expected prices.

Figure 1.2 Gross value of annual livestock and livestock products production

Figure 1.3 Annual change in production values, 2023–24 to 2024–25

Increased crop volumes to drive higher values despite lower prices

In 2024–25, Australian winter crop production volumes are forecast to rise by 17% (see Australian Crop Report) with increased rainfall driving higher area planted and yields on average (see Seasonal Conditions). Timely rainfall in New South Wales, Queensland and Western Australia is forecast to support wheat, barley, canola and pulse production volumes. However, with limited recent rainfall, soil moisture in large parts of South Australia and Victoria remains below average and is expected to lead to lower winter crop production, partially offsetting increases in other states.

Domestic prices for most crops are expected to fall in 2024–25. Domestic crop prices are largely driven by global prices, which are expected to fall because of higher global grain and oilseed production.

The gross value of crop production is forecast to rise by $760 million (2%) in 2024–25 (Figure 1.4) but with significant variation by commodity (Figure 1.5):

• Wheat value is expected to increase by $950 million to reach $10.7 billion. Favourable seasonal conditions in New South Wales and Queensland, and an improvement in Western Australia are forecast to increase production volumes, more than offsetting a drop in prices.
• The value of pulses is forecast to rise by a $900 million to a record $3.6 billion. High international pulse prices are expected to have driven an increase in area planted, particularly for chickpeas and lentils, leading to increased production volume.
• Horticulture values are expected to increase by $620 million to a record $17.8 billion, reflecting higher production volumes due to improved growing conditions, high water availability and easing input pressures.
• Canola value is expected to fall by $860 million to $3.3 billion in 2024–25 due to lower production volumes and prices.
• Sugar value is expected to fall by $450 million to $1.8 billion due to lower prices.
• Cotton value is expected to fall by $390 million to $2.7 billion due to lower production volumes and prices.

Figure 1.4 Gross value of annual crop production

Figure 1.5 Expected change in crop values, 2023–24 to 2024–25 

Agricultural export values are forecast to fall by $3.1 billion to $68.5 billion in 2024–25 ($72.6 billion including fisheries and forestry exports). The forecast fall is mostly driven by reduced exportable supplies of grain and oilseeds following significant stock drawdowns in 2023–24. Despite the fall, agricultural export values are still expected to be the third highest on record.

The forecast value of agricultural exports for 2024–25 is broadly consistent with the June 2024 Agricultural Commodities Report with upward revisions to beef and sheep meat export values offsetting downward revisions to cotton and sugar exports.

Livestock and livestock product export values are expected to rise by $1.2 billion to $30.6 billion in 2024–25. Higher export values reflect both higher export volumes – due to increased domestic production – as well as higher global prices because of strong global demand (Figure 1.6). Australian red meat exports increased significantly in 2023–24 and are expected to reach a new record in 2024–25, driven by:

• Record high value of beef and veal exports to the United States (see Beef and Veal).
• Record high value of sheep meat exports to the Middle East (see Sheep Meat).
• Record high volume of lamb exports to the United States (see Sheep Meat).

Crop export values are expected to fall by $4.3 billion to $37.9 billion in 2024–25 driven by both lower export volumes and declining global prices across major crop commodities (Figure 1.6). Crop export volumes are expected to fall in 2024–25 despite higher domestic production; high carryover grain and oilseed stocks following three consecutive record seasons from 2020–21 to 2022–23 have been drawn down reducing exportable supply in 2024–25. Since the June Agricultural Commodities Report, the impact of lower world demand for some of Australia’s major grain exports is expected to offset the impact of improved production on the outlook for crop export volumes in 2024–25.

The majority of global crop prices are expected to fall in 2024–25, following annual declines in 2023–24, as global crop supply continues to increase. In particular, global grain and oilseed supply is expected to increase with improved production conditions in the United States and South America driving higher world corn and soybean production.

In contrast, a forecast increase in export prices for pulses, fruit, nuts and wine in 2024–25, combined with increased market access in important trade destinations, are supporting crop export values.

Figure 1.6 Annual value, volume, and price of agricultural exports

Farmers’ terms of trade (FTOT) is forecast to increase by 2% in 2024–25, the first increase since 2020–21 (Figure 1.7). FTOT compares the average prices paid by Australian agricultural businesses for inputs to the farmgate prices they receive for production. The forecast rise in the FTOT reflects easing prices paid in 2024–25 for many major inputs. By contrast, prices received by farmers are expected to remain relatively stable in 2024–25 with lower crop prices offset by higher livestock prices.

Most farm input prices are expected to continue falling in 2024–25 from the highs of 2022–23 but remain relatively elevated. Easing prices paid are driven by a decline in the cost of both materials and services. Global energy prices are expected to fall in 2024–25 (see Economic Overview) supporting lower fuel, fertiliser and chemical prices for Australian farm businesses.

Increased labour availability is also expected to ease input pressures for farm businesses, but other contracting and marketing costs are expected to increase in line with higher production.

Figure 1.7 Annual Australian farmers terms of trade

Average cash income (net of costs) for broadacre farms is forecast to increase by 64% to $192,000 per farm in 2024–25. Profitability for both broadacre cropping and livestock farms is forecast to improve in 2024–25 but remain below long-term averages in real terms (see Farm Performance Forecast). Increased profitability reflects higher livestock prices, lower input costs and increased crop production due to an improvement in seasonal conditions.

Although profitability is forecast to increase on average, farm performance by region is expected to be mixed due to differences in seasonal conditions. Favourable climate conditions across Northern Australia, southern Queensland and much of New South Wales are expected to drive strong crop production, and average to above-average farm business profits. However, farm business profits in southern Victoria, South Australia and southern Western Australia are expected to remain below average, reflecting less favourable seasonal conditions.