Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is forecasting the gross value of agriculture to fall by 14% to $79bn in 2023/24 as drier conditions impact crop yields and domestic commodity values fall.

ABARES expects milk production to increase 0.5% to 8.1bn litres in 2023/24, driven by higher milk yields as drier seasonal conditions expected across eastern Australia result in improved pasture quality and fewer animal health issues. Falling fodder prices expected in the second half of 2023 will improve feed availability for dairy cattle and benefit yields. Dairy cow numbers are forecast to continue declining in 2023/24 as farmers exit the industry, motivated by high land values and investment opportunities in broadacre operations. The national average farmgate milk price is expected to fall 5.2% to 68.8c/l. ABARES forecasts higher milk production to drive a 2% increase in dairy export volumes in 2023/24, led by a 10% increase in cheese shipments due to recent investment in production facilities and greater SMP exports driven by higher margins on milk fat products. 

Crop production is expected to fall 18% in the coming season from record production volumes in 2022/23, and prices are also expected to fall. With reduced planting areas, production of barley is forecast to fall 30% to 9.9mt, 11% below the 10-year average, while canola production is forecast to fall 41% to 4.9mt, which is still 15% above the 10-year average. Wheat production is expected to fall 34% to 26.2mt. El Niño presents a significant downside risk to the 2023/24 winter cropping season, likely resulting in below average rainfall across eastern Australia.