Agricultural Commodity Outlook and Global Demand Ports Australia Centennial Conference Trish Gleeson Australian Bureau of Agricultural and Resource Economics and Sciences 19 October2016
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Agricultural Commodity Outlook and Global Demand
Ports Australia Centennial Conference
Trish GleesonAustralian Bureau of Agriculturaland Resource Economics and Sciences
19 October2016
1. Australian agriculture overview
2. Outlook for key commodities
3. Long term food demand and supply
4. Competition challenges
Outline
World Economic Growth
a ABARES assumption. b includes China.
Australian dollar has fallen and is assumed tostay relatively low
Current: US76c
Parity 10 year averageUS88c
a ABARES assumption.
2016–17 $b
10
20
30
40
50
60
70
2002–03 2006–07 2011–12 2016–17f
Value of exports
Gross value of production
f ABARES forecast. z ABARES projection.
Value of agricultural production and exports
Major Australian agricultural exports
f ABARES forecast
Change in export volumes between 2015‐16 and 2016‐17 f
‐ 20
‐ 10
%
10
20
30
40
50
Beef Wheat Wool Sugar Wine Barley Cotton Lamb Canola
f ABARES forecast
f ABARES forecast z ABARES projection
World crop prices
Australian winter crop production
f ABARES forecast
Major winter crops
Australian opening beef cattle numbers and price
f ABARES forecast
Australian beef cattle numbers and price
f ABARES forecast
Beef exports
kt
200
400
600OtherJapan United States Republic of Korea
China
China beef imports, by source
Live cattle exports, Australia, 2015‐16by destination and type
Australian lamb price and slaughter
f ABARES forecast
World dairy prices
f ABARES forecast
Australian farm gate milk prices and production
f ABARES forecast
Average per person income: 123% rise from 2007 to 2050
Population by 2050: 9.3 billion
Global food demand is expected to rise to 2050
Increase in China’s food consumptionUrban population 2009 to 2050
0 10 20
Sheep and goat meat
Sugar
Dairy
Beef
Oilseeds
Cereals
Vegetables
Urban high‐income
Urban middle‐income
2009 US$b
On the world market Australia is a significantcontributor to global agricultural exportsLargest agricultural exporters, 2014—Australia ranked 14th
source: WTO 2016
Source: ABARES model results
Australia
Export value (2000 US$)
2000 US$2.1 billion
2014 US$5.1 billion
Market access 87%
Income growth
Reduced supply cost
11%
2%
Contribution to growth in beef exports
Between 2000 and 2014
Australia Brazil
Export value (2000 US$) 2000 US$2.1 billion US$0.5 billion 2014 US$5.1 billion US$4.2 billion
Exchange rate vs US$ +55% ‐22%
Market access 87% 52%
Income growth
Reduced supply cost
11%
2%
9%
39%
Contribution to growth in beef exports
Between 2000 and 2014
Source: ABARES model results
Source: ABARES model results. Effect on total growth is under successful trade diversion.
Baseline
Increased access of South America to:
China and South East Asia
China 174% 124% ‐US$338m
South East Asia 36% 20% ‐US$14m
Total Growth 25% 22% ‐US$168m
Growth in Australian beef exports
Between 2014 and 2030, in 2014 US dollars
Baseline
Increased access of South America to:
US and North Asia
US 0% ‐20% ‐US$452m
North Asia 15% ‐46% ‐US$1 440m
Total Growth 25% 16% ‐US$576m
Growth in Australian beef exports
Between 2014 and 2030, in 2014 US dollars
Source: ABARES model results. Effect on total growth is under successful trade diversion.
Reduction of beef supply cost by 5%
Increase in beef exports by $US200 million
Source: ABARES model results
Australian beef exports by 2030
in 2014 US dollars
Summary
• World economic recovery will be gradual and a relatively low Australian dollar to stay, at least in the short term
• Gross value of farm production to increase and export earnings to fall slightly
• Improved market access has supported Australian agriculture and continued effort is needed
• Productivity growth and infrastructure improvement are key to future opportunities
agriculture.gov.au/abares
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