In its most recent climate change impact update, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) found farm profitability is affected by the changing climate. Winter season rainfall has fallen 20% in south-eastern Australia since 2000, and ABARES estimated annual average farm profit have been reduced by 23% or $29,200 annually per farm as a result over that period. The regional impacts of seasonal conditions on farm profit are shown in this map.
Conditions since 2000 have also contributed to increased risk in terms of more variable cash income and profits. In the 20 years since 2000, the risk of very low farm returns (due to climate variability) essentially doubled (relative to the period 1950 to 2000), increasing from a 1 in 10 frequency to more than 1 in 5.
Climate predictions indicate a wide range of possible outcomes for Australian farms with the most severe predictions indicating a 50% reduction in farm profitability. These results don’t account for any adaptation, which will be required to maintain viability and competitiveness.