Mar 01 2019
Australia’s agricultural sector has been seriously affected by a range of extreme weather patterns in 2018-19, with farmers battling severe drought, floods or fires across much of the country. According to industry research company, IBISWorld, several of Australia’s agricultural industries are expected to decline in 2018-19 off the back of these harsh weather conditions, with the cotton, rice, pulse, beef cattle farming and honey industries facing particular hardship.
Harsh drought conditions affecting the supply chains of Australian cotton, rice and pulse industries
Off the back of harsh drought conditions experienced across most of the country in 2018 and 2019, Australia’s crop growing industries are expected to record significant reductions in production volumes this financial year. For example, the cotton, rice and pulse industries in Australia are expected to experience a decline as a result of their production volumes being heavily affected by drought conditions.
Rice is water intensive, and often rely on irrigation water supplies to assist in the growing process. According to the Australian Bureau of Agricultural and Resource Economics and Sciences, production volumes the rice growing industries are expected to plummet in 2018-19, due to the lack of rainfall.
“Rice production is expected to fall to 103.8 kilotons in the current year, falling from 630.5 kilotons in 2017-18. This fall in production is likely to cause a significant negative effect on the Rice Growing industry, with the industry projected to decline in 2018-19,” said IBISWorld Senior Industry Analyst Nathan Cloutman.
“While domestic supplies of locally produced rice are expected to fall in 2018-19, price rises are not likely to occur in supermarkets, with imports likely to fill the gaps in domestic supply,” Mr Cloutman added.
Similarly, pulse production is expected to fall strongly in 2018-19, with chickpea volumes likely to be the most affected according to IBISWorld.
“The Pulse Growing industry is expected to decrease by 45.4% in 2018-19, to reach $899.0 million. As the vast majority of chickpeas are destined for export markets, the decline in production is to affect the export earnings for farmers more than domestic consumers. However, domestic supplies and prices of chickpeas and related products like hummus are expected to remain relatively steady,” said Mr Cloutman.
The Cotton Growing industry has also been negatively affected by the drought, with production levels expected to be significantly lower this year. The industry has also been in the spotlight, due to the instances of mass freshwater fish deaths in the Menindee Lakes region of New South Wales.
“In January 2019, two instances of mass fish deaths occurred in the Lower Darling river where millions of fish died. These instances followed an earlier incident when an estimated 10,000 fish died in December 2018. Local communities have placed some blame on the industry, stating that irrigation water over-extraction by cotton growers has partially caused the mass fish deaths,” said Mr Cloutman.
Cotton Australia, the peak industry body for cotton growers, issued a statement stating that the industry is not to blame. A Labor-commissioned report in February stated that drought and poor management were to blame for the mass fish deaths.
The NSW Department of Primary Industries (DPI) and WaterNSW are also investigating the incidents in the Menindee Lakes. The NSW DPI has also undertaken several fish rescue operations in areas where spillway pools have become disconnected to the Lower Darling River.
“As drought conditions continue to persist, government departments are continuing to try and limit the damage to the local environment while also trying to support local agricultural businesses,” said Mr Cloutman.
Queensland’s historic floods to raise the cost of beef
North-Western Queensland was hit with some of the worst floods seen in Australia in late-January and early-February, seriously affecting the state’s agricultural communities.
“As a result of the floods, up to 500,000 cattle deaths were reported in the region. The cattle herds had been dealing with a period of prolonged drought before the historic flooding occurred, so it has been a particularly hard time for the industry,” said Mr Cloutman.
According to IBISWorld, Queensland accounts for a significant proportion of the Beef Cattle Farming industry, with the industry expected to decline in 2018-19 as a result of the flooding. The Queensland Rural and Industry Development Authority is offering Special Disaster Assistance Recovery Grants up to $75,000 and Disaster Assistance Loans up to $250,000 to seriously affected primary producers in the region.
“Poor conditions are encouraging farmers to increase turn-off rates, with slaughter numbers forecast to rise in 2018-19. Beef production is expected to increase during the year as a result. However, strong demand from export markets is limiting domestic supply, which is increasing the price of beef at the retail level,” said Mr Cloutman.
Tasmanian fires to hurt honey production and sky rocket prices:
Dry and windy conditions in Tasmania have caused numerous bushfires in the state during 2019, with over 100,000 hectares of forest being destroyed.
According to IBISWorld, fire damage has negatively affected a range of agricultural industries in the state. The bushfires have destroyed a large proportion of the state’s leatherwood trees, which are a major aspect of Tasmanian honey production.
“The damage to the leatherwood tree population will significantly reduce Tasmanian honey production, causing a reduction of supplies on supermarket shelves. The price of Tasmanian honey is expected to sky rocket as a result,” said Mr Cloutman.
The Tasmanian Beekeepers Association has also expressed concerns that the damage to the leatherwood tree population will have a long term effect on the industry, due to the fact that it takes around 70 years for a leatherwood tree to rejuvenate and grow back to full production.
IBISWorld Industry Reports used in this release:
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