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End of drought to help crop farmers, but slash beef exports

03 March 2020

AUSTRALIA - Almost a third of Australia's broadacre farmers will endure negative incomes this year as the lingering impact of the drought drags on production, but a return of normal weather should deliver a much-needed boost for winter crops.

The nation's chief commodities forecaster, in its outlook for the coming season, said cash incomes for NSW farms were expected to be close to zero this year, the worst for the state this century, with many regions facing negative cash flows.

Nationally, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) on Tuesday said 31 percent of broadacre farms would register negative cash incomes this year. Two years ago, just 15 percent were in such a dire situation.

The big increase is being driven by the drought, which ABARES expects to break for the winter cropping season.

It is forecasting total farm production to drop to $59 billion this year, from $62 billion in 2018-19, with good sales of livestock goods offsetting the drop-off in crops such as wheat.

ABARES expects beef and veal exports, which are tipped to reach a record $9.8 billion this financial year, to fall by 23 percent in 2020-21 as farmers seek to re-stock their paddocks.

The nation's sheep flock is already at its lowest level since 1904, while the cattle herd is at its lowest since 1990. ABARES says it will take several years for sheep and cattle numbers to return to pre-drought levels.

Offsetting the drop in beef production, ABARE believes wheat exports will climb 20 per cent next year to almost $4.2 billion on the back of a 30 percent jump in production. Crop production traditionally lifts in a year after drought.

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Source: The Sydney Morning Herald

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