Agricultural commodities – December quarter...

Agricultural commodities

Department of Agricultureand Water Resources

Research by the Australian Bureau of Agricultural and Resource Economics and Sciences

DECEMBER QUARTER 2016

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1ABARESAgricultural commodities – vol. 6 no. 4 • December quarter 2016

Contents

Economic overview 4

Crops

Wheat 29

Coarse grains 37

Oilseeds 43

Sugar 50

Cotton 56

Livestock

Beef and veal 65

Sheep meat and wool 70

Dairy 79

Boxes

Proportion of agricultural production exported 23

No certainty about impact of Brexit on UK and EU beef industries 88

Articles

The EU beef industry 84

Oils ain’t oils 104

South American wine industry 118

Statistical tables 127

Report extracts 169

ABARES contacts 172

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Economic overview

4 ABARESAgricultural commodities – vol. 6 no. 4 • December quarter 2016

Economic overviewNatasha Frawley, Matthew Howden and Kirk Zammit

• World economic growth is assumed to fall from 3.2 per cent in 2015 to 2.9 per cent in 2016, before recovering to 3.3 per cent in 2017.

• China’s transitioning economy and a new US administration present uncertainties for global economic growth.

• An assumed relatively weak Australian dollar supports the forecast for Australian farm exports of around $47.5 billion in 2016–17.

Global economic outlook summaryWorld economic growth fell from 3.4 per cent in 2014 to 3.2 per cent in 2015, the lowest since 2009. Growth is expected to continue to weaken in 2016. In preparing this set of agricultural commodity forecasts, world economic growth is assumed to average 2.9 per cent in 2016 as a result of slower growth in advanced economies and emerging Asia. In 2017 world economic growth is expected to strengthen to 3.3 per cent, supported by stronger growth in emerging countries.

World economic growth, 2001 to 2017

%

a ABARES assumption.Sources: ABARES; International Monetary Fund

0

1

2

3

4

5

6

2017a20152013201120092007200520032001

Economic overview


Average economic growth in OECD countries is assumed to weaken to 1.5 per cent in 2016 before rising to 1.7 per cent in 2017. For non-OECD countries as a whole, economic growth is assumed to average 4 per cent in 2016 and strengthen to 4.4 per cent in 2017.

Regional economic growth, 2015 to 2017

%World

Eastern Europe, Russian Federation

and Ukraine

Latin America

Non-OECD Asia b

OECD

20152016a

2017a

a ABARES assumption. b Includes China.Sources: ABARES; International Monetary Fund

0

2

4

6

8

As reported in the September 2016 edition of Agricultural commodities, falls in the prices of oil and other energy sources have had mixed effects on global economic growth. Over the outlook period, oil prices are expected to increase modestly as production growth slows, demand strengthens and global oil stocks begin to fall.

Ongoing government stimulus projects have quieted fears of a sharp economic slowdown in China during the outlook period. However, slower than expected growth in China could adversely affect global trade, and business and consumer confidence inside and outside China. This could lead to weaker global economic activity than currently assumed.

The US presidential and congressional election was held on 8 November 2016. The policies that will become priorities under the new government will be clarified after the President-elect takes office in January 2017. Potential policy shifts pose uncertainties for the outlook.

Economic overview


Key macroeconomic assumptions, 2014 to 2017

World unit 2014 2015 2016 a 2017 a

OECD % 1.9 2.1 1.5 1.7United States % 2.4 2.6 1.5 2.0Japan % 0.0 0.5 0.5 0.5Eurozone % 1.1 2.0 1.6 1.4– Germany % 1.6 1.5 1.5 1.2– France % 0.6 1.3 1.3 1.5– Italy % –0.3 0.8 1.1 1.0United Kingdom % 3.1 2.2 1.6 0.8Korea, Rep. of % 3.3 2.6 2.7 3.0New Zealand % 3.0 3.0 2.8 2.6non-OECD % 4.6 4.0 4.0 4.4– non-OECD Asia % 6.8 6.6 6.4 6.3 South-East Asia b % 4.6 4.8 4.8 5.0 China c % 7.3 6.9 6.7 6.4 Taiwan % 3.9 0.6 1.0 1.7 Singapore % 3.3 2.0 1.7 1.8 India % 7.0 7.2 7.6 7.7– Latin America % 1.0 0.0 –0.6 1.6Russian Federation % 0.7 –3.7 –0.8 1.0Ukraine % –6.6 –9.9 1.5 2.5Eastern Europe % 2.8 3.6 3.3 3.1World d % 3.4 3.2 2.9 3.3

United States % 1.6 0.1 1.2 1.5

US prime rate e % 3.3 3.3 3.5 3.9Australia unit 2013–14 2014–15 2015–16 a 2016–17 aEconomic growth % 2.6 2.4 2.7 2.5Inflation % 2.7 1.7 1.4 1.7Interest rates g % 4.6 4.3 4.1 4.0

0.92 0.84 0.73 0.7571 67 62 64

Economic growth

Inflation

Interest rates

Key macroeconomic assumptions, 2014 to 2017

a ABARES assumption. b Indonesia, Malaysia, the Philippines, Thailand and Vietnam. c Excludes Hong Kong. d Weighted using 2015 purchasing-power-parity valuation of country gross domestic product by the International Monetary Fund. e Commercial bank prime lending rates in the United States. g Large business weighted-average variable rate on credit outstanding. h Base: May 1970 = 100.Sources: ABARES; Australian Bureau of Statistics; International Monetary Fund; Reserve Bank of Australia; US Bureau of Labor Statistics; US Federal Reserve

Australian exchange ratesUS$/A$ TWI for A$ h

Economic overview


Economic prospects in Australia’s major trading partners

Gradual slowdown in China as economy continues to transitionIn preparing this set of agricultural commodity forecasts, economic growth in China is assumed to slow to 6.7 per cent in 2016 and 6.4 per cent in 2017. This is down from 6.9 per cent in 2015.

Growth in China is moderating as the economy transitions from being driven by industrial production and investment to being more reliant on the services sector and consumption. Over the five years to 2015, the mining and industrial production sector’s share of GDP fell by 6 percentage points to 40.5 per cent. The services sector, which recorded relatively stable growth over the period (averaging 8.4 per cent a year), accounted for over 50 per cent of total output by 2015.

Composition of GDP by sector, China, 2000 to 2016

%

Mining and industrialproductionServicesAgriculture, forestryand �sheries

10

20

30

40

50

60

Note: 2016 data are based on three quarters of data available at time of publication.Source: National Bureau of Statistics, China

201620142012201020082006200420022000

The Chinese economy grew by 6.7 per cent year-on-year in the September quarter 2016. By sector in the same period services increased by 7.6 per cent; mining and industrial production by 6.1 per cent; and agriculture, forestry and fisheries by 4 per cent. The Chinese economy has been supported by renewed strength in the residential property sector and infrastructure investment.

A range of stimulus measures implemented since 2014 to reduce the amount of unsold housing stock contributed to the strengthening of the housing market over 2015 and 2016. The improvement has been driven by large and mid-sized city house prices, which have increased strongly. However, it is unclear how long the improvement in the sector will last, given continued high levels of housing stock nationally. This uncertainty is a risk to Chinese economic growth over the outlook period.

Economic overview


Residential investment and housing prices, year-on-year change, China, March quarter 2011 to September quarter 2016

Residential investment

%

Newly built houseprice (right axis)

%

Note: Housing price growth is an average of all 70 regions.Source: National Bureau of Statistics, China

5

10

15

20

25

30

35

40

–5

0

5

10

15

20

25

30

Sep2016

Sep2015

Sep2014

Sep2013

Sep2012

Sep2011

Chinese Government investment expenditure growth increased sharply from February 2016, partly offsetting the slowing growth in private sector investment. Government investment includes spending on infrastructure projects such as roads. Total fixed asset investment in October 2016 was 8.3 per cent higher than in October 2015. This was led by strong investment growth by state-owned enterprises (20.5 per cent) over the same period.

Investment by sector, year-on-year change, China, October 2012 to October 2016

%

PrivateTotalPublic

Source: National Bureau of Statistics, China

5

10

15

20

25

30

Oct2016

Apr2016

Oct2015

Apr2015

Oct2014

Apr2014

Oct2013

Apr2013

Oct2012

Economic overview


China’s fiscal stimulus measures are expected to support growth over the short term and help support the industrial sector. The manufacturing Purchasing Managers’ Index was above 50 for the four months to November, indicating an expansion of the manufacturing industry and that fiscal stimulus measures are assisting domestic production.

The path of transition for the Chinese economy remains a risk to global economic growth. Over the two years to 2016 the Chinese Government’s measures to support its short-term economic stability goals added to the country’s rising debt levels. As China’s economic growth slows, its ability to pay down this debt is diminished. Much of the debt is in government-owned enterprises in the corporate sector.

Debt-to-GDP ratios, by borrowing sector, China, March quarter 2006 to March quarter 2016

Households

%

GovernmentCorporate

Note: Data unavailable for households and corporations before 2006. March quarter 2016 data were latest available as at early December 2016.Source: Bank for International Settlements

50

100

150

200

250

300

Mar2016

Mar2015

Mar2014

Mar2013

Mar2012

Mar2011

Mar2010

Mar2009

Mar2008

Mar2007

Mar2006

US growth supported by private consumptionIn preparing this set of agricultural commodity forecasts, economic growth in the United States is assumed to average 1.5 per cent in 2016 and 2 per cent in 2017.

Growth in private consumption remained the biggest driver of US economic growth in the first three quarters of 2016, supported by the strengthening labour market and rising wages. Private consumption expenditure increased by 2.7 per cent year-on-year in the September quarter 2016, with spending on motor vehicles and housing services the largest contributors.

Economic overview


Personal consumer expenditure, year-on-year change, United States, September quarter 2006 to September quarter 2016

%

Source: Bureau of Economic Analysis, United States

–2

–1

0

1

2

3

4

5

Sep2016

Sep2014

Sep2012

Sep2010

Sep2008

Sep2006

The unemployment rate averaged 4.9 per cent in the first nine months of 2016, the lowest since 2007. Wage growth was 2.3 per cent year-on-year in the September quarter 2016, up from an average of 2.1 per cent in the first half of 2016.

Low mineral and energy prices have put downward pressure on US business investment. Non-residential investment in the first three quarters of 2016 was 0.8 per cent lower than in the same period in 2015. This decrease was mainly driven by a fall in investment in mining exploration and equipment. It was partly offset by an increase in investment in commercial structures and healthcare industries.

Manufacturing and exports have been weak throughout 2016 as a result of a stronger US dollar. The real trade-weighted value of the US dollar in the first three quarters of 2016 increased by an average of 4 per cent year-on-year. Merchandise exports in the same period were 5 per cent lower year-on-year. These industries are expected to remain weak over the outlook period as the US dollar remains relatively strong.

The US Federal Reserve’s official interest rate has remained at between 0.25 per cent and 0.5 per cent since December 2015. Low inflation and relatively soft business investment contributed to the Federal Reserve maintaining these low borrowing rates. However, the Federal Reserve is expected to increase rates at least once before the end of 2017 as domestic and global economic conditions improve.

The new US President will take office in January 2017. Until the new administration announces its policy direction, the effects on the US economy will remain unknown. This gives some uncertainty to the outlook for 2017.

Economic overview


Japanese growth supported by fiscal measuresIn preparing this set of agricultural forecasts, the Japanese economy is expected to grow by 0.5 per cent in 2016 and 2017.

Household spending, which makes up close to 60 per cent of GDP, was weak over the first three quarters of 2016. Additional fiscal measures announced in August 2016 are expected to support household spending. Initiatives include increased childcare subsidies and welfare payments to pensioners, and a one-off cash payment to citizens on low incomes. The Japanese Government’s decision to postpone a further increase in the consumption tax (until 2019) is also likely to support household spending growth over the outlook period.

Labour market conditions continued to improve in 2016. Employment expanded by 1.0 per cent year-on-year in October 2016 and the labour force participation rate increased to 60.1 per cent, the highest in almost eight years. The increase was driven mainly by rising female participation, which has been assisted by government labour market reforms.

Labour force participation rate by gender, Japan, October 2000 to October 2016

%

MaleTotalFemale

Source: Statistics Bureau, Japan

50

60

70

80

Oct2016

Oct2014

Oct2012

Oct2010

Oct2008

Oct2006

Oct2004

Oct2002

Oct2000

Private investment increased by 1.4 per cent year-on-year in the September quarter 2016. The September Tankan survey showed an increase in firms’ capital expenditure intentions over the 2016–17 financial year (1 April to 31 March). Solid corporate profits are expected to continue to support business investment over the short term.

Despite a slowly improving economy, domestic price growth remains subdued. Wage growth was fairly weak, increasing by 0.2 per cent year-on-year in September 2016. Core inflation, which excludes fresh food and energy prices, continued to decelerate over 2016—to 0.2 per cent year-on-year in October.

An appreciation in the yen reduced demand for Japanese exports, which remained weak in the September quarter 2016. The yen appreciated by 19 per cent between the June quarter 2015 and the September quarter 2016 as a result of increased demand for Japanese assets during a period of increased uncertainty in global financial markets. The appreciation in the yen is expected to continue to put downward pressure on Japanese exports over the outlook period.

Economic overview


Real trade-weighted exchange rate and real value of exports, year-on-year change, Japan, September quarter 2006 to September quarter 2016

Exports

%

Trade-weighted index(right axis) (inverted axis)

%

Sources: Bank of Japan; Cabinet Oce, Japan

–40–30–20–10

01020304050

20151050–5–10–15–20–25

Sep2016

Sep2015

Sep2014

Sep2013

Sep2012

Sep2011

Sep2010

Sep2009

Sep2008

Sep2007

Sep2006

Eurozone economy to benefit from weak growthThe recovering labour market and low borrowing rates in the eurozone are expected to support weak growth of 1.6 per cent in 2016 and 1.4 per cent in 2017.

The eurozone labour market has recovered somewhat since 2013. Unemployment fell to 10 per cent in the September quarter 2016, after peaking at 12.1 per cent in the June quarter 2013. The slowly recovering economy contributed to increased job creation. Unemployment fell on average across the region but varies significantly between countries. For example, the unemployment rate in Germany and the Netherlands is around 5 per cent, and in Greece and Spain is around 20 per cent.

Unemployment rate, eurozone, September quarter 2006 to September quarter 2016

%

Note: September quarter 2016 unemployment rate for Greece based on monthly data for July and August, which were latest available at time of publication.Source: Eurostat

Sep2016

Sep2015

Sep2014

Sep2013

Sep2012

Sep2011

Sep2010

Sep2009

Sep2008

Sep2007

Sep2006

GermanyFranceGreeceSpainEurozoneItaly

5

10

15

20

25

30

Netherlands

Economic overview


Private consumption growth has been the main driver of eurozone economic growth since 2014. Low oil prices, low interest rates and ongoing job creation supported consumption growth over this period. However, an expected recovery in the oil price over the outlook period will raise fuel prices and reduce disposable incomes in the region.

Contributions to GDP growth, eurozone, September quarter 2010 to September quarter 2016

Government consumption

%

GDP growth

Gross �xed capital formationPrivate consumptionChanges in inventoriesand acquisitionsNet exports

Source: Eurostat

–2

–1

0

1

2

3

Sep2016

Sep2015

Sep2014

Sep2013

Sep2012

Sep2011

Sep2010

Inflation in the eurozone has remained relatively weak, averaging 0.1 per cent year-on-year in the first three quarters of 2016. The European Central Bank has made monthly asset purchases since early 2015. This purchase programme is due to run until the end of March 2017 or beyond if necessary to support inflation of around 2 per cent in the medium term.

The United Kingdom voted to leave the European Union (Brexit) on 23 June 2016. The UK Government has announced that, before the end of March 2017, it intends to begin negotiations to leave the European Union. However, this may be delayed depending on UK parliamentary involvement. The United Kingdom will have two years to leave the European Union after the official start of negotiations. Economic growth in the United Kingdom was relatively strong in the first three quarters of 2016, but uncertainty about the future relationship between it and the European Union following Brexit is expected to dampen confidence and result in slower private consumption and investment growth in the United Kingdom and other European countries.

Economic overview


Non-OECD Asian economies to strengthen in 2017Economic growth strengthened in the first half of 2016 in many non-OECD Asian countries, particularly those in South-East Asia. Slower than expected economic growth in China and sluggish global economic growth remain downside risks for the region.

South-East AsiaEconomic growth across South-East Asia is assumed to be around 4.8 per cent in 2016 and to increase to 5 per cent in 2017. Indonesia’s economy—the largest in South-East Asia—grew by 5.2 per cent year-on-year in the June quarter 2016, supported by growth in business investment and private consumption. In Malaysia, economic growth slowed in response to weak export demand from China.

IndiaIndia’s economy is assumed to grow by 7.6 per cent in 2016 and 7.7 per cent in 2017. This is expected to be supported by growth in manufacturing and private consumption.

The Reserve Bank of India lowered interest rates to 6.25 per cent in October. This was the second interest rate cut in 2016. Subdued food price growth and weak global economic growth were cited as the main reasons for the decision.

Economic growth, other non-OECD Asian countries, 2015 to 2017

2017a

2016a

2015

%

a ABARES assumption.Sources: ABARES; International Monetary Fund

1

2

3

4

5

6

7

8

Vietnam

Thailand

Taiwan

Singapore

Philippines

Malaysia

Indonesia

India

Economic overview


Australian economic growthIn preparing this set of agricultural commodity forecasts, economic growth in Australia is assumed to be 2.5 per cent in 2016–17.

The Australian economy continues to transition away from economic growth supported by the mining investment boom and towards a more balanced set of growth drivers. In 2015–16 mining investment declined by 27.5 per cent, detracting 1.8 percentage points from GDP. This was more than offset by growth in household consumption, dwelling investment and exports.

Contributions to GDP growth, Australia, 2005–06 to 2015–16

Public demand

%

Gross domestic product

Household consumptionPrivate investmentNet exports

Note: Changes in inventories are excluded.Source: Australian Bureau of Statistics

–1

0

1

2

3

4

5

6

2015–16

2013–14

2011–12

2009–10

2007–08

2005–06

Household consumption, which comprises about 57 per cent of GDP, contributed 1.6 percentage points to economic growth in 2015–16. Household spending has been strong despite low income growth as a result of a reduction in household savings. The household saving ratio declined from 8.8 per cent in 2011–12 to 6 per cent in 2015–16—influenced by low interest rates, improved consumer sentiment and increased household wealth resulting from a strong property market.

Economic overview


Household saving ratio, Australia, September quarter 2000 to September quarter 2016

%

Household saving ratioAverage householdsaving ratio, 2000 to 2007and 2008 to 2016

Note: Household saving is represented as a share of household disposable income. Averages represent theaverage household saving ratio before and after the global �nancial crisis.Source: Australian Bureau of Statistics

0

2

4

6

8

10

12

Sep2016

Sep2014

Sep2012

Sep2010

Sep2008

Sep2006

Sep2004

Sep2002

Sep2000

Employment increased by 2 per cent over the 12 months to October 2016. Employment growth was supported by low wage growth and was strongest in services sectors. This reflects the rebalancing of economic activity away from mining activities. Employment growth is expected to slow over 2016–17 to around its long-run average rate of 1.8 per cent.

Annual average growth in employment, by sector, Australia, August 2006 to August 2016

%

Business servicesHousehold services

Source: Australian Bureau of Statistics

Distribution andgoods production(includes mining)

–2

–1

1

2

3

4

5

6

0

Aug2016

Aug2014

Aug2012

Aug2010

Aug2008

Aug2006

Economic overview


Mining activity is expected to continue to detract from GDP growth during 2016–17. However, the sharp decline in investment since the peak in 2012–13 is expected to ease over the next two years. Residential construction and public investment should provide some support to investment growth in 2016–17. Public investment increased by 5.1 per cent in 2015–16 because of a substantial increase in spending by state governments. However, commercial construction activity is expected to remain fairly subdued over the outlook period.

International trade was a significant contributor to Australian economic growth in 2015–16, adding 1.4 percentage points to GDP. The volume of resource exports increased by 6 per cent year-on-year in the September quarter 2016. Significant investment in liquefied natural gas and iron ore production in previous years will continue to support increased export volumes of these commodities in 2016–17. The lower Australian dollar has supported activity in non-resource sectors including tourism, education, agriculture and manufacturing. However, the strengthening of the Australian dollar over 2016 may be a risk to the growth in these exports over the remainder of the outlook period.

Real export volumes, by category, Australia, September quarter 2000 to September quarter 2016

2013–14$b

MiningServices

Note: Chain volume measures used to remove price e�ect on exports.Source: Australian Bureau of Statistics

Rural goodsManufactured goods

10

20

30

40

50

60

Sep2016

Sep2014

Sep2012

Sep2010

Sep2008

Sep2006

Sep2004

Sep2002

Sep2000

Consumer price indexIn 2016–17 inflation (measured by the consumer price index, CPI) is assumed to average 1.7 per cent. This compares with 1.4 per cent in 2015–16 and remains below the Reserve Bank of Australia’s target of between 2 per cent and 3 per cent.

Inflation increased by 1.3 per cent year-on-year in the September quarter 2016. Domestic inflationary pressures remain weak as a result of low wage growth and strong competition in the retail sector. Housing costs, the largest component of the CPI, also contributed significantly to a slowing in the inflation rate. This reflects lower price growth in rents and new dwellings.

Economic overview


Global factors also weighed on Australian inflation, including the sharp decline in oil prices between the end of 2014 and early 2016. Lower oil prices reduced the cost of automotive fuel for consumers and the cost of production for some businesses. However, the significant depreciation of the Australian dollar from its peak in 2011–12 exerted upward pressure on inflation by increasing the cost of imported goods and services.

Consumer price inflation, Australia, September quarter 2006 to September quarter 2016

%

TradablesNon-tradables

Note: Prices for non-tradable goods and services are largely determined by the domestic market. Prices fortradable goods and services are largely determined by world markets.Source: Australian Bureau of Statistics

–2

0

2

4

6

8

Sep2016

Sep2014

Sep2012

Sep2010

Sep2008

Sep2006

The Australian dollarIn preparing this set of agricultural commodity forecasts, the Australian dollar is assumed to average US75 cents and have a trade-weighted index value of 64 in 2016–17.

Australia’s terms of trade—the ratio of export prices to import prices—is an indicator of the fundamental value of the Australian dollar. The terms of trade declined by 30 per cent between 2011–12 and 2015–16 because of weakening prices for Australia’s resource exports as a result of softer demand in key markets, including China. The lower terms of trade have reduced business profits, wages and government revenue.

As a result of weakening demand for Australian resources, the Australian dollar depreciated against the US dollar, declining by 30 per cent between 2011–12 and 2015–16. The lower value of the dollar has helped the Australian economy to transition away from reliance on resource exports by supporting increased activity in the non-resource sectors.

Economic overview


Terms of trade and exchange rates, Australia, September quarter 2006 to September quarter 2016

index USc/A$

Terms of trade index2013–14=100

Exchange rate, USc/A$ (right axis)

Trade-weighted index (A$) May 1970=100

100

60

80

120

140

100

60

80

120

140

Sources: Australian Bureau of Statistics; Reserve Bank of Australia

Sep2016

Sep2014

Sep2012

Sep2010

Sep2008

Sep2006

Renewed strength in commodity prices, particularly for coking coal and iron ore, over 2016 has improved Australia’s terms of trade. The terms of trade index increased by 4.4 per cent in the September quarter 2016. This was the second quarterly rise after two years of quarterly decline. However, improving global economic growth and slowing growth in China are likely to limit the extent of a rise in the Australian dollar.

Outlook for Australian agricultural and fisheries exportsTotal volume of farm production is forecast to rise by 5.8 per cent in 2016–17, following an estimated decrease of 2.1 per cent in 2015–16. The forecast rise mainly reflects a large increase in crop production.

The index of unit returns for Australian farm exports is forecast to decrease by 0.1 per cent in 2016–17, following an estimated increase of 5.4 per cent in 2015–16. Export prices in Australian dollar terms are forecast to decline in 2016–17 for beef and veal, wheat, barley and canola. Export prices for wool, sugar, wine, cotton, chickpeas, lamb, live feeder/slaughter cattle, cheese, rock lobster and mutton are expected to increase.

Earnings from farm exports in 2016–17 are forecast to rise by 6.7 per cent to $47.5 billion, following an estimated 1.4 per cent increase in 2015–16 to $44.6 billion.

Economic overview


CropsExport earnings for crops are forecast to rise to around $27.2 billion in 2016–17 from an estimated $22.7 billion in 2015–16. This forecast increase is driven by forecast higher production of winter crops resulting from the favourable seasonal conditions that occurred throughout winter and spring.

Strong rises in export earnings in 2016–17 are forecast for wheat (up 25 per cent), sugar (up 23 per cent), barley (up 15 per cent), cotton (up 56 per cent), chickpeas (up 74 per cent) and canola (up 33 per cent).

LivestockExport earnings for livestock and livestock products are forecast to fall to $20.4 billion in 2016–17 from an estimated $21.9 billion in 2015–16. This decline is driven mostly by expected lower Australian beef supplies (as producers rebuild herds) and weaker import demand for beef from most major markets.

Export earnings in 2016–17 are forecast to fall for beef and veal (down 17 per cent), live feeder/slaughter cattle (down 17 per cent) and mutton (down 12 per cent). These decreases are partially offset by forecast increases in export earnings for wool (up 3 per cent) and lamb (up 4 per cent). Export earnings for dairy products are expected to remain largely unchanged.

FisheriesExport earnings for fisheries products are forecast to rise to $1.6 billion in 2016–17 from an estimated $1.5 billion in 2015–16. Export earnings in 2016–17 are forecast to rise for rock lobster (up 6 per cent) as a result of strengthening demand from China. Export earnings for salmonids are forecast to rise by 10 per cent as prices respond to reduced world supplies. Export earnings for tuna are forecast to rise in 2016–17 (up 2 per cent) as a result of strengthening demand from Japan.

Economic overview


Major indicators of Australia’s agriculture and natural resources based sector

Category 2011–12 2012–13 2013–14 2014–15 2015–16 s 2016–17 f % changeExchange rate US$/A$ 1.03 1.03 0.92 0.84 0.73 0.75 2.7

Farm index 100.0 97.7 105.1 112.1 118.2 118.1 –0.1

Farm A$m 36 389 38 041 41 157 43 928 44 552 47 549 6.7– crops A$m 21 219 22 585 22 351 21 617 22 664 27 154 19.8– livestock A$m 15 170 15 456 18 806 22 312 21 888 20 395 –6.8Fisheries products A$m 1 227 1 175 1 304 1 440 1 542 1 595 3.4

Farm A$m 47 760 48 705 51 519 54 451 56 741 60 176 6.1– crops A$m 26 579 28 592 28 697 27 438 27 638 31 704 14.7– livestock A$m 21 180 20 112 22 822 27 013 29 103 28 472 –2.2Forestry and fisheries A$m 3 928 3 901 4 310 4 795 5 178 5 304 2.4– forestry A$m 1 624 1 516 1 840 2 034 2 271 2 272 0.0– fisheries A$m 2 305 2 385 2 470 2 761 2 907 3 032 4.3Volume of farm production c index 118.6 119.6 122.3 122.3 119.7 126.6 5.8– crops index 135.0 133.2 131.9 125.0 127.9 152.5 19.2– livestock index 100.9 104.7 111.4 118.1 111.0 104.6 –5.8

Crop area (grains and oilseeds) ’000 ha 24 275 23 856 22 583 22 934 23 317 23 727 1.8Sheep million 74.7 75.5 72.6 70.9 68.4 71.5 4.5Cattle million 28.4 29.3 29.1 27.4 26.1 26.7 2.3Farm costs A$m 37 277 37 186 37 950 38 453 38 910 40 367 3.7Net cash income d A$m 15 552 16 715 18 915 21 453 23 383 25 473 8.9Net value of farm production e A$m 10 482 11 518 13 570 15 998 17 831 19 809 11.1Farmers’ terms of trade g index 93.3 95.3 98.2 103.9 109.5 108.9 –0.5

Agriculture, forestry and fishing ’000 321 301 311 318 322 na naAustralia ’000 11 247 11 381 11 448 11 653 11 881 na na

Major indicators of Australia's agriculture and natural resources based sectors

a Base: 2011–12 = 100. b For a definition of the gross value of farm production see Table 13. c Chain-weighted basis using Fisher’s ideal index with a reference year of 1997–98 = 100. d Gross value of farm production less total cash costs. e Gross value of farm production less total farm costs. f ABARES forecast. g Ratio of index of prices received by farmers and index of prices paid by farmers; base: 1997–98 = 100. s ABARES estimate. na Not available. Sources: ABARES; Australian Bureau of Statistics; Reserve Bank of Australia

Australian export unit returns a

Value of exports

Gross value of production b

Production area and livestock numbers

Employment

Economic overview


Major Australian agricultural commodity exports

Price aValue ValueVolume

2016–17f2015–16s

2016–17f

$b

a Wheat, sugar, barley, cotton, canola and cheese are world indicator prices in US$. Beef and veal, lamb and mutton are saleyardprices in A$. Wool is Eastern Market Indicator price in A$. All other commodities are export unit returns in A$. f ABARES forecast. s ABARES estimate.

Mutton

Rock lobster

Cheese

Live feeder/slaughter cattle

Canola

Lamb

Chickpeas

Cotton

Barley

Wine

Sugar

Wool

Wheat

Beef and veal–17%

25%

3%

23%

3%

15%

56%

74%

4%

33%

–17%

–2%

6%

–12%

–15%

42%

–1%

3%

1%

38%

44%

8%

–1%

43%

–22%

–4%

3%

–19%

7%

–14%

4%

20%

2%

–9%

11%

62%

12%

2%

7%

6%

3%

19%

$8.29b

$5.12b

$3.28b

$1.92b

$2.18b

$1.79b

$1.26b

$1.01b

$1.64b

$1.10b

$1.28b

$0.86b

$0.69b

$0.66b

$6.89b

$6.42b

$3.38b

$2.36b

$2.25b

$2.06b

$1.97b

$1.76b

$1.70b

$1.46b

$1.06b

$0.84b

$0.73b

$0.58b

2 4 6 8 10

Economic overview


Proportion of agricultural production exported Lisa McKelvie and John Hogan

Australia exports a significant proportion of its agricultural production to overseas markets. ABARES used the latest Australian Bureau of Statistics (ABS) published data to estimate that the share of agricultural production exported from 2012–13 to 2014–15 averaged around 66 per cent. This is similar to its estimates of 64 per cent for 1999–2000 (ABARE 2000) and 65 per cent for the three years to 2012–13 (Thompson 2014). However, the most recent, slightly higher estimate mainly reflects the effects of larger than average winter crop harvests combined with increased beef production and exports. Dry seasonal conditions and strong US import demand for beef over the three years to 2014–15 drove increased beef production and exports.

Percentage of agricultural production exported, average for 2012–13 to 2014–15

Total agriculturalproduction

Wool Cotton lint

Sugar

Wheat

Sources: ABARES; Australian Bureau of Statistics

Domestic

Export$7.4b

78% 74% 98% 72% 98% 41% 66%

$1.2b $1.5b

$9.3b

$2.6b

69%

$2.7b

$4.4b

$48b

Dairyproducts

Beef andveal

Sheep meat

~

Basis of estimationABARES derives its estimates of the proportion of agricultural production exported from ABS published data on the volume of farm production, the volume of farm exports and the gross value of farm production for each farm product or product group.

The gross value of farm production is the value placed on recorded farm production at wholesale prices realised in the marketplace. Generally, the marketplace is the metropolitan market in each state and territory. Commodities that are consumed locally or become raw material for a secondary industry are presumed to have been consumed in the marketplace.

continued ...

Economic overview


Proportion of agricultural production exported continued

Exports and production must be valued on a comparable basis, so ABARES estimates the value of exports for each farm product using the same wholesale prices used for farm production. This means that the estimate of the value of total farm exports is comparable with the gross value of farm production.

Export values at wholesale pricesFor each farm product, the value of exports at wholesale prices is equivalent to the gross value of production multiplied by the proportion of production volume that is exported. Estimates for each farm product are then added to calculate an estimate of total farm exports, valued at wholesale prices. This estimate is different from farm exports valued on-board ship because those values include substantial value adding from downstream processing.

ABARES applies a discount factor to the value of exports when production volume data are only partially available for a product group—such as fruits and nuts, or vegetables. This accounts for domestic transport costs and any value added from processing to convert the value of exports from free-on-board to a wholesale price equivalent.

Proportion exported for each farm productIn calculating the proportion of production exported, ABARES converts the volume exported back to the equivalent unprocessed volume if downstream processing is involved. For example, all meat export volumes are converted from shipped weight to carcase weight. Other examples include dairy products (converted back to their milk equivalents), raw sugar (to its sugarcane equivalent), wine (to its wine grape equivalent) and wheat flour (to its wheat equivalent).

ABARES calculates the share of production exported for each farm product by dividing the equivalent unprocessed export volume by farm production.

The share of farm production exported varies for each farm product. From 2012–13 to 2014–15 exports accounted for a relatively large proportion of domestic production for wool (98 per cent), cotton lint (98 per cent), pulses (82 per cent), canola (79 per cent), wheat (78 per cent), barley (73 per cent), sugar (74 per cent), beef and veal (72 per cent) and sheep meat (69 per cent). Farm products with relatively small export shares included fruit and nuts (25 per cent), vegetables (11 per cent) and poultry (4 per cent).

continued ...

Economic overview



Percentage of agricultural production exported, average for 2012–13 to 2014–15

Commodity Production Exports Exports share

Volume unit

Volume Gross value ($m)

Volume Gross value a ($m)

%

Grains and oilseeds

Wheat kt 23 967 7 425 18 724 5 801 78

Barley kt 8 431 2 311 6 166 1 690 73

Rice kt 890 284 530 169 59

Grain sorghum kt 1 907 537 1 066 300 56

Canola kt 3 838 2 060 3 042 1 633 79

Pulses kt 2 118 956 1 728 780 82

Other grains kt 1 801 448 338 84 19

Other oilseeds kt 1 250 455 471 172 38

Industrial crops

Cotton lint kt 810 1 512 794 1 482 98

Sugar cane b kt 30 961 1 216 22 852 898 74

Wine grapes c kt 1 562 765 1 037 508 66

Other crop products d – – 1 688 – – –

Other crop exports e – – – – 1 756 –

Horticulture – – – – – –

Fruit and nuts excl. wine grapes – – 3 780 – 943 25

Vegetables – – 3 543 – 392 11

Nursery – – 1 261 – 13 1

Livestock and livestock products

Beef and veal f kt 2 625 9 266 1 879 6 633 72

Sheep meat f kt 739 2 719 512 1 884 69

Pig meat f kt 362 1 055 45 131 12

Poultry f kt 1 082 2 389 42 92 4

Wool (greasy equiv.) kt 424 2 559 416 2 508 98

Dairy g ML 9 474 4 380 3 920 1 812 41

Other livestock products h – – 948 – – –

Other livestock exports i – – – – 1 929 –

Gross value of farm production – – 51 558 – – –

less sales within the sector – – 3 574 – – –

Gross value of farm sales to other sectors – – 47 984 – 31 608 65.87a Obtained by multiplying the gross value of production by the percentage of production exported for each commodity. b Export volume is converted from sugar to sugar cane. c Export volume is converted from wine to wine grapes. d Other crop products include hay, pasture and other crops not elsewhere classified. e Other crop exports include biscuits, beverages (excluding wine), confectionary, hay and vegetable oil. f Includes live animal exports. Export volume is converted from shipped weight to carcase weight. g Export volume of dairy products (including butter, cheese and milk powder) is converted to liquid milk equivalent. h Other livestock products include animal offal and fats, eggs, honey, and skins and hides. i Other livestock exports include animal offal and fats, canned and preserved meat, eggs, honey, sausages, and skins and hides. Sources: ABARES; Australian Bureau of Statistics

continued ...

Economic overview



Share of production exportedThe gross value of total farm production can be calculated by adding the value of production for each farm product and then subtracting the value of sales in the agriculture sector. ABARES subtracts sales in the agriculture sector to avoid double counting.

Finally, ABARES calculates the percentage of total agricultural production exported by dividing the estimated wholesale value of total farm exports by the gross value of total farm production.

ReferencesABARE 2000, ‘Estimating the proportion of agricultural production exported’, Australian commodities: December quarter, vol. 7, no. 4, p. 596, Australian Bureau of Agricultural and Resource Economics, Canberra.

Thompson, N 2014, ‘Proportion of agricultural and food production exported’, Agricultural commodities: June quarter, vol. 4, no. 2, pp. 38–40, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

Agriculture

Crops


a US no. 2 hard red winter, fob Gulf. b US no. 2 yellow corn, fob Gulf. c US no. 2 soybean, fob Gulf. d Intercontinental Exchange, nearby futures, no. 11 contract (October to September). e Cotlook ‘A’ index (August to July).

CROPS

WheatThe world wheat indicator price is forecast to be the lowest in 10 years in real terms, re�ecting ample world wheat supplies.

14%to US$182/tin 2016–17

a

Coarse grainsThe world coarse grain indicator price is forecast to fall, re�ecting high world production and large carry-over stocks.

8%to US$154/tin 2016–17

b

OilseedsThe world oilseed indicator price is forecast to average higher due to tight supplies in the �rst quarter of the year.

5%to US$390/t

in 2016–17

c

SugarThe world indicator price for raw sugar is forecast to rise, mainly re�ecting a signi�cant decline in world sugar stocks.

CottonThe world indicator price for cotton is forecast to increase, re�ecting the e�ect of world cotton consumption exceeding production for the second consecutive year.

11%to USc 78/lb

in 2016–17e

d

20%to USc 20/lb

in 2016–17


WheatSarah Smith

• The world wheat indicator price is forecast to average US$182 a tonne in 2016−17, compared with US$211 a tonne in 2015−16.

• World wheat production is forecast to increase to 750 million tonnes in 2016−17, with record average yields expected to more than offset the forecast reduction in planted area.

• Australian wheat production is forecast to reach a record 32.6 million tonnes in 2016–17. Export volume and value are also expected to increase.

World indicator price to fall in 2016−17The world wheat indicator price (US no. 2 hard red winter, fob Gulf) is forecast to fall by 14 per cent in 2016−17 to average US$182 a tonne. The world indicator price continues to face downward pressure from record high global supplies. The margin between the prices of milling wheat grades and feed wheat grades is expected to grow in 2016–17 because of a forecast global abundance of low-protein wheat. Global feed wheat consumption is forecast to be the second-highest on record, but demand will likely be constrained by competition from other feed grains such as corn and barley.

World wheat supply and indicator price, 1996–97 to 2016–17

Opening stocks

Mt2016–17US$/t

Production

f ABARES forecast.

US no. 2 hard red winter, fob Gulf(right axis)

200

400

600

800

1 000

100

200

300

400

500

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

2002–03

2000–01

1998–99

1996–97

Wheat


World wheat production forecast to reach record high in 2016−17World wheat production is forecast to rise by 2 per cent to a record high of 750 million tonnes in 2016−17. Record average yields are expected to more than offset a forecast reduction in planted area. Production is forecast to increase in the major producing regions other than China and the European Union.

Higher yields and unfavourably wet conditions during grain fill and harvest adversely affected the protein and moisture levels in some northern hemisphere production regions, including in Canada, China, France, Poland, the Russian Federation and the United Kingdom. This resulted in a greater proportion of wheat production in these regions failing to meet milling grade specifications.

Forecast change in wheat production, 2016−17

Volume change

Percentage change(right axis)

Mt %AustraliaBlack Sea

region

CanadaChina

EuropeanUnion

United States

Argentina

–10

0

10

20

30

40

–16

0

8

16

24

32

Wheat production in the Black Sea region—Kazakhstan, the Russian Federation and Ukraine—is estimated to have increased by 13 per cent to a record 116 million tonnes in 2016−17. This increase reflects exceptional winter and spring wheat yields. High yields and wet conditions have reduced spring wheat protein content in Kazakhstan and the Russian Federation.

In Canada, wheat production is estimated to have increased by 13 per cent in 2016–17 to 31 million tonnes. The average yield is estimated to have increased by 17 per cent because of favourable growing conditions. However, rain and snow during harvest in the major producing regions of Canada have resulted in quality concerns. In western growing regions, for example, average protein levels for all wheat grades were lower in 2016–17 than in the previous season.

US wheat production is estimated to have risen by 12 per cent to 63 million tonnes in 2016−17, driven by favourable seasonal conditions supporting record yields. As at early November 2016, hard red winter wheat production was on track to be the highest since 1998–99.

Wheat


US wheat production by grade, 2012–13 to 2016–17

Durum

Mt

White wheatSoft red winterHard red spring

p USDA projectionSource: US Department of Agriculture Economic Research Service

2015–16

2014–15

2013–14

2012–13

2016–17p

Hard red winter

10

20

30

40

50

60

70

Feed wheat consumption to rise in 2016−17World wheat consumption is forecast to increase by 2 per cent to 736 million tonnes in 2016−17. Human consumption is forecast to increase by 1 per cent to 494 million tonnes, in line with population growth. Feed wheat use is a more variable component of total wheat consumption because wheat and other feed grains are strong substitutes. In 2016−17 feed wheat consumption is expected to rise by 3 per cent to 150 million tonnes.

The abundance of low protein wheat has put downward pressure on feed wheat prices. The lower prices are expected to drive global feed wheat use to the second-highest on record, particularly in Canada, China, the Republic of Korea and the United States. However, feed wheat use is likely to be constrained by competition from other feed grains such as corn and barley, which are also expected to be in abundant supply and priced lower in 2016–17. Therefore, the US wheat-to-corn price ratio is forecast to fall in 2016–17 but is not expected to be as low as in 2011–12.

Wheat-to-corn price ratio, 2002–03 to 2016–17

ratio

US soft red winter, fob Gulf,to US no. 2 corn, fob Gulf

0.3

0.6

0.9

1.2

1.5

1.8

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

2002–03

Wheat


Feed wheat use in China is forecast to increase by 9 per cent in 2016–17 despite Chinese provincial governments in the major corn-producing regions offering subsidies to encourage corn use. Feed wheat prices are expected to remain competitive, with plentiful supplies available following a large and weather damaged domestic harvest.

Record closing stocks in 2016−17Global wheat production is forecast to outpace global consumption in 2016−17, and closing world wheat stocks are forecast to increase by 6 per cent to a record 235 million tonnes.

In 2016–17 stocks held in the major exporting countries are forecast to increase by 14 per cent, making it the fourth consecutive year of growth. The stocks-to-disappearance ratio for these major exporting countries is forecast to rise by 1.6 percentage points, an indication of large supplies being available for export.

Stocks in China are forecast to increase by 16 per cent in 2016–17 and comprise 39 per cent of world closing stocks. Stocks in the rest of the world are forecast to fall by 9 per cent.

World wheat closing stocks, 2006−07 to 2016−17

Rest of world

Mt %

ChinaMajor exporters a

a Argentina, Australia, Canada, the European Union, Kazakhstan, the Russian Federation, Ukraine andthe United States. b Disappearance de�ned as domestic consumption plus exports. f ABARES forecast.

50

100

150

200

250

Stocks-to-disappearanceratio for major exporters b(right axis)

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

10

20

30

40

50

World wheat trade to remain largely unchanged in 2016−17World wheat trade is forecast to be 166 million tonnes in 2016−17, largely unchanged from the 2015−16 record. Most of the major exporting countries are forecast to have ample supplies available for export, but total world imports are expected to remain largely unchanged.

Wheat


Wheat imports in 2016–17 are expected to increase in several countries including Egypt, India, Morocco and Turkey because domestic harvests were affected by unfavourable seasonal conditions. Wheat imports into India, for example, are forecast to increase more than sevenfold to 3 million tonnes to supplement the below-average Indian harvest. Available data indicate that the volume of wheat imported into India during the first quarter of 2016–17 was double the total imported in all of 2015–16. In late September 2016, the Indian Government lowered its import duty on wheat from 25 per cent to 10 per cent. This change is expected to support import demand for the remainder of the year.

Indian wheat imports, 2014–15 to 2016–17

Rest of world

kt

European Union 28UkraineAustralia

2016–17f

Remainder of 2016–17

2015–162014–15

f ABARES forecast.

2016–17 Q1import data500

1 000

1 500

2 000

2 500

3 000

The Egyptian Government announced on 22 August 2016 that it would no longer accept consignments of wheat containing traces of ergot. This included consignments already secured but not yet delivered. Ergot is a fungal disease that can infect cereals and grasses and produce mycotoxins that in large doses can be harmful to humans. Several consignments from the Black Sea region were rejected after being found to contain ergot traces. Egyptian wheat purchase tenders attracted few or no bids during September because suppliers were unwilling to risk rejection as a result of failing to meet the stringent ergot-free requirement. In late September, the government reinstated the ergot tolerance limit of 0.05 per cent—the general standard recommended by the UN international food standards body Codex Alimentarius. The volume of wheat imported into Egypt is forecast to be the second-largest on record and Egypt is expected to remain the world’s largest wheat import market in 2016–17.

Wheat imports into Indonesia are forecast to fall by 16 per cent in 2016–17 to 8.5 million tonnes as domestic corn production recovers. Imports of feed wheat into Indonesia increased by more than a third in 2015–16 to supplement reduced corn supplies. Corn was in short supply in Indonesia because of adverse seasonal conditions, which affected domestic production, and a government policy that capped corn imports.

Wheat


Imports by Sub-Saharan Africa are forecast to fall in 2016–17 and by as much as 30 per cent in South Africa and Ethiopia. Record volumes were imported in 2015–16 to supplement poor domestic harvests.

Adverse weather affected yields in France, Germany, Poland and the United Kingdom and is expected to drive a 26 per cent decline in wheat exports from the European Union in 2016−17. However, ample supplies are forecast to be available for export from the other major wheat-exporting regions.

Wheat exports from the Russian Federation had a slower than expected start in 2016–17 because of uncertainty about Egyptian import specifications and reduced competitiveness from an appreciating Russian rouble. Russian exports are expected to gain momentum and exceed 28 million tonnes in 2016–17, which would be 11 per cent higher than in 2015–16.

Record Australian wheat production forecast for 2016–17Australian wheat production is forecast to increase by more than a third to a record 32.6 million tonnes in 2016–17. Favourable seasonal conditions have supported above average to exceptional yields in much of the Australian cropping region.

Record yields and production are forecast in New South Wales, Victoria and South Australia. Spring rainfall was above average in the cropping regions of the eastern states, including South Australia. Record September rainfall caused localised waterlogging and storm damage in some regions, but crops generally benefited from the wet and cool conditions. In Western Australia, timely rainfall and below average temperatures boosted yield prospects. This is expected to more than offset significant losses from frost damage in some areas of the state.

Australian wheat production, by state, 2015–16 and 2016–17

2016–17f

Mt

2015–16s

Five-year average

f ABARES forecast. s ABARES estimate.

WesternAustralia

Victoria SouthAustralia

QueenslandNew SouthWales

2

4

6

8

10

12

Wheat


Harvest is complete in Queensland and underway in the other states, with crop quality generally good. The longer than usual maturing period and high yield potential may constrain protein content. However, as at November 2016 protein levels in wheat harvested had not been significantly affected.

Australian exports forecast to riseAustralian wheat exports are forecast to increase by 42 per cent in 2016–17 to 22 million tonnes, supported by record wheat production. If realised, this will be the second-largest export volume on record after 2011–12. However, volume exported in 2016–17 is less likely to reach that record because of increased competition due to global availability of large exportable supplies.

Mixed import demand from Australia’s major trading partners is expected in 2016–17. Indonesia is expected to increase wheat imports for human consumption but to reduce overall wheat imports because of decreased feed wheat demand. China and India are expected to increase milling wheat imports to supplement poor quality domestic harvests. In the first quarter of 2016–17, India imported more wheat from Australia than in any full year since 2006–07.

The total value of Australian wheat exports is forecast to increase by 25 per cent in 2016–17 to $6.4 billion.

Australian wheat exports by destination, 2011–12 to 2016–17

Rest of world

Mt2016–17$b

VietnamRepublic of Korea

f ABARES forecast.

Value (right axis)

5

10

15

20

25

2

4

6

8

10

ChinaIndonesia

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

Wheat


Outlook for wheat

Category unit 2014–15 2015–16 s 2016–17 f % change

Production Mt 730 737 750 1.8– Black Sea region a Mt 96.8 102.1 115.6 13.2– China Mt 126 130 128 –1.5– European Union Mt 156 160 143 –10.6– India Mt 95.9 86.5 92.6 7.1– United States Mt 55.1 56.1 62.9 12.1Consumption Mt 715 720 736 2.2– human Mt 481 487 494 1.4– feed Mt 145 146 150 2.7Closing stocks Mt 205 222 235 5.9Stocks-to-use ratio % 28.6 30.8 31.9 –Trade Mt 153 164 166 1.2

– Argentina Mt 5.4 8.5 8.6 1.2– Australia c Mt 16.6 15.8 22.4 41.8– Black Sea region a Mt 39.3 50.1 51.9 3.6 – Kazakhstan Mt 5.9 7.3 8.7 19.2 – Russian Federation Mt 22.2 25.4 28.2 11.0 – Ukraine Mt 11.2 17.4 15.0 –13.8– Canada Mt 23.9 21.7 21.6 –0.5– European Union Mt 36.2 35.7 26.4 –26.1– United States Mt 23.5 21.1 26.5 25.6Price d US$/t 266 211 182 –13.7

Area ’000 ha 12 384 12 793 12 957 1.3Production kt 23 743 24 193 32 643 34.9Exports c kt 16 571 15 777 22 414 42.1– value A$m 5 547 5 120 6 419 25.4APW pool return A$/t 326 303 260 –14.2

World

Australia

Outlook for wheat

a Russian Federation, Ukraine and Kazakhstan. b Local marketing years. c July–June years. d US no. 2 hard red winter wheat, fob Gulf, July–June. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; International Grains Council; US Department of Agriculture

Exports b


• World coarse grain indicator prices are forecast to be lower in 2016–17, reflecting record world production.

• World trade in coarse grains is forecast to rise in 2016–17, reflecting an expected increase in corn exports from the United States.

• Australian coarse grain production and export volumes are forecast to increase in 2016–17.

World coarse grain prices lower in 2016‒17The world coarse grain indicator price (US no. 2 yellow corn, fob Gulf) is forecast to average 8 per cent lower in 2016–17 at US$154 a tonne. The world indicator price for barley (France feed barley, fob Rouen) is forecast to average 9 per cent lower at US$158 a tonne. Global coarse grain production is forecast to reach record highs in 2016‒17 and exceed world consumption, despite world consumption (particularly for feed) increasing to record levels. Closing stocks are forecast to grow and place downward pressure on prices.

World coarse grain indicator prices, January 2013 to October 2016

US$/t

France feed barley, fob RouenUS no. 2 yellow corn,fob Gulf

50

100

150

200

250

300

350

Oct2016

Apr2016

Oct2015

Apr2015

Oct2014

Apr2014

Oct2013

Apr2013

Coarse grainsAmelia Brown

Coarse grains


Coarse grain production to reach record level in 2016–17World production of coarse grains is forecast to increase by 6 per cent in 2016–17 to a record 1 323 million tonnes. Forecast strong growth in corn production, particularly in the United States and Brazil, will more than offset a small expected fall in global production of barley.

CornWorld corn production is forecast to increase by 7 per cent in 2016–17 to a record 1 031 million tonnes. Corn production is forecast to increase in all major producing countries except China.

US corn production is estimated to have risen to a record high of 386 million tonnes in 2016–17. Average yield is estimated to have increased by 4 per cent, with yields in most regions average to above average. Harvested area is estimated to have increased by 8 per cent. The United States is by far the biggest corn producer in the world and typically accounts for around 40 per cent of total production.

In South America, Brazilian corn production is forecast to rise to 84 million tonnes in 2016–17—up from 67 million tonnes in 2015–16. This forecast increase reflects an expected rise in average yield and an increase in planted area. Production in Argentina is also expected to be significantly higher, at around 37 million tonnes, reflecting an increase in planted area.

Major world corn producers, 2006–07 to 2016–17

United States

Mt

China

f ABARES forecast.

0

Brazil

100

200

300

400

500

600

700

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

In 2016–17 corn production in China is estimated to have fallen by almost 10 million tonnes to 216 million tonnes. Area planted to corn fell in response to the Chinese Government’s March 2016 removal of the corn price support scheme in an effort to reduce corn stocks.

Coarse grains


BarleyWorld barley production is forecast to fall by 3 per cent in 2016–17 to 144 million tonnes, driven by falls in harvested area in the major northern hemisphere growing regions and in Argentina. In the northern hemisphere growing regions, average yields were generally very good and partially offset the fall in harvested area. However, very wet conditions resulted in lower yields in France and Germany (the largest EU producers) and drought adversely affected yields in Turkey and North Africa.

Barley production in the European Union is forecast to decline by 3 per cent in 2016–17 to around 60 million tonnes.

In Argentina, barley production is expected to fall by almost 26 per cent to 3.65 million tonnes as a result of producers allocating more land to growing corn and wheat in response to an increase in profitability of these crops compared with barley.

Record coarse grain consumption expected in 2016–17World coarse grain consumption is forecast to increase by 3 per cent in 2016–17 to 1 303 million tonnes, largely reflecting an expected increase in corn consumption. However, this increase will be constrained by competition from abundant supplies of low-priced feed wheat.

World coarse grain consumption, 2006–07 to 2016–17

Feed

Mt Mt

Closing stocks(right axis)

Food, seed and industrial

f ABARES forecast.

100

200

300

400

500

600

700

800

50

100

150

200

250

300

350

400

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

CornWorld consumption of corn is forecast to increase by 3 per cent in 2016–17 to 1 billion tonnes, largely because of expected growth in animal feed use. Feed use is expected to increase to record levels as a result of continued strong growth in meat production. In the United States, corn consumption is forecast to increase by around 5 per cent in 2016–17 to around 312 million tonnes. Industrial use of corn is forecast to increase by only 1 per cent as ethanol production is expected to be constrained by relatively low oil prices.

Coarse grains


Corn consumption in China is expected to increase by 4 per cent in 2016–17 to around 226 million tonnes, which would be the highest on record. Corn has become more price competitive against imported feed grains such as barley and grain sorghum since the Chinese Government removed the domestic corn price support scheme. It is also paying subsidies to encourage use of domestic corn.

BarleyWorld barley consumption is forecast to remain fairly flat in 2016–17 at 146 million tonnes. Barley consumption in China is expected to fall by around 13 per cent to 7 million tonnes as a result of domestic corn prices becoming more price competitive against imported feed grains. Consumption in the European Union, the biggest consumer of barley, is forecast to increase by 5 per cent to 54 million tonnes, reflecting an expected increase in feed use.

World trade in coarse grains to increase in 2016–17World trade in coarse grains is forecast to increase by 12 per cent in 2016–17 to 182 million tonnes. Increased corn exports are expected to more than offset forecast falls in barley and grain sorghum exports.

US corn exports are forecast to increase by 15 per cent in 2016–17 to 55 million tonnes, reflecting record production and increased price competitiveness against other feed grains. Corn exports from Argentina are forecast to increase by 30 per cent to 24 million tonnes. This reflects an expected increase in the price competiveness of Argentine corn as a result of the Argentine Government’s removal of export taxes and foreign exchange restrictions.

World trade in barley is forecast to fall by 13 per cent in 2016–17 to 26 million tonnes. This reflects an expected large fall in import demand in China as livestock producers switch to domestic corn for animal feed. Import demand from Saudi Arabia is also forecast to decline because its stocks should meet feed demand in 2016–17.

Coarse grain imports, China, 2010–11 to 2016–17

Grain sorghum

Mt

Corn

f ABARES forecast.

Barley

5

10

15

20

25

30

2016–17f

2014–15

2015–16

2012–13

2013–14

2010–11

2012–12

Coarse grains


World closing stocks to continue to growWorld coarse grain closing stocks are forecast to increase by 4 per cent in 2016–17 to 254 million tonnes, with record high coarse grain production expected to exceed world coarse grain consumption. A forecast increase in closing stocks of corn is expected to exceed forecast falls in closing stocks of barley and grain sorghum.

US closing stocks of corn are forecast to increase to 59 million tonnes in 2016–17, reflecting record production. Closing stocks of corn in China are forecast to fall by 6 per cent because of an estimated fall in production and a forecast increase in consumption following the removal of price support mechanisms.

World barley stocks are forecast to fall to 22.8 million tonnes, largely as a result of expected reductions in stocks in the European Union, Saudi Arabia and the United States. Barley stocks in Australia are forecast to increase in 2016–17, reflecting an expected increase in production.

Australian coarse grain production to increase in 2016–17Australian coarse grain production is forecast to increase by 16 per cent in 2016–17 to 14.6 million tonnes. This reflects forecast higher barley and oat production more than offsetting lower grain sorghum production.

Barley production is forecast to increase by 24 per cent in 2016–17 to a record 10.6 million tonnes. Widespread frost events in Western Australia—Australia’s largest barley-producing state—reduced yield and quality prospects in some regions. However, average yield is forecast to be above average and to reach a record in New South Wales. Overall yields in New South Wales have been excellent despite some crop losses in low-lying areas due to flooding. The long and wet growing season is forecast to result in production of a higher proportion of feed-grade barley.

Production of oats is forecast to rise by 38 per cent in 2016–17 to 1.8 million tonnes. Average yield is forecast to increase by 26 per cent, reflecting favourable seasonal conditions. Area planted to oats in 2016–17 increased by 9 per cent in response to an increase in milling oat prices at the time of planting.

Grain sorghum production is forecast to fall by 29 per cent in 2016–17 to 1.4 million tonnes. Area planted to grain sorghum is forecast to fall by 31 per cent in 2016–17 to around 470 000 hectares, reflecting higher expected returns from growing cotton.

Australian coarse grain exports are forecast to rise by 30 per cent in 2016–17 to 8.9 million tonnes as a result of forecast higher barley and oat production. The value of coarse grain exports is forecast to increase by 7 per cent, reflecting increased shipments of barley and oats. Barley exports are forecast to rise by 38 per cent in 2016–17 to 7.6 million tonnes, reflecting increased supplies.

Malting barley exports are forecast to increase by 33 per cent to just over 2 million tonnes in 2016–17, reflecting increased production and strong demand. Wet seasonal conditions in France, one of the world’s largest barley exporters, have resulted in a significant fall in global malting barley supplies.

Grain sorghum exports are forecast to decline sharply in 2016–17, reflecting a 29 per cent fall in production combined with a significant reduction in import demand from China. The value of grain sorghum exports is forecast to fall by 39 per cent in 2016–17 to $222 million.

Coarse grains


Outlook for coarse grains


Production Mt 1 306 1 248 1 323 6.0– barley Mt 142 149 144 –3.4– corn Mt 1 014 960 1 031 7.4Consumption Mt 1 255 1 263 1 303 3.2Trade Mt 186 163 182 11.7Closing stocks Mt 245 245 254 3.7Stocks-to-use ratio % 20 19 19 –Corn price a (fob Gulf) US$/t 174 168 154 –8.3Barley price b (fob Rouen) US$/t 204 173 158 –8.7

Area ’000 ha 5 806 5 802 5 551 –4.3– barley ’000 ha 4 078 4 105 4 000 –2.6– grain sorghum ’000 ha 732 681 471 –30.8Production kt 12 691 12 571 14 644 16.5– barley kt 8 646 8 593 10 644 23.9– grain sorghum kt 2 209 2 037 1 439 –29.4Exports kt 7 756 6 844 8 880 29.8– value A$m 2 697 2 280 2 445 7.2Feed barley price c A$/t 252 237 179 –24.5Malting barley price d A$/t 282 274 222 –19.0

Outlook for coarse grains

World

Australia

a US no. 2 yellow corn, fob Gulf, July–June. b France feed barley, fob Rouen, July–June. c Feed 1, delivered Geelong. d Gairdner Malt 1, delivered Geelong. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; United Nations Commodity Trade Statistics Database (UN Comtrade); US Department of Agriculture


OilseedsJames Fell

• The world oilseed indicator price is forecast to average higher in 2016–17 because of lower supplies and a higher world price in the first quarter of the year compared with the same quarter the previous year.

• World oilseed production is forecast to rise, reflecting large soybean crops in Brazil and the United States.

• Total world closing stocks for oilseeds are forecast to rise to 96 million tonnes in 2016–17 but rapeseed (including canola) stocks are forecast to fall to their lowest in four years.

Prices to ease as production recoversThe world oilseed indicator price (US no. 2 soybeans, fob Gulf) for 2016–17 (July to June) is forecast to rise by 5 per cent to average US$390 a tonne. This is mainly the result of lower soybean supplies in South America and a higher world price in the first quarter of the year compared with the previous year. The world price averaged US$413 a tonne in the September 2016 quarter compared with US$380 a tonne in the September 2015 quarter. Over the final quarter of 2016–17, the world price is forecast to average lower than the same quarter last year but not by enough for the full year average price to fall.

For the 2016–17 marketing year (October to September) the world oilseed indicator price is forecast to average US$371 a tonne, 3 per cent lower than the previous year. This is expected as a result of a forecast rise in world production of soybeans, and most other oilseeds, and a forecast increase in world oilseed stocks.

Oilseeds


World oilseed indicator prices, September 2014 to November 2016

US$/t

US no.2 soybeans, fob Gulf

Europe Rapeseed,fob Hamburg

350

400

450

500

Nov2016

May2016

Nov2015

May2015

Nov2014

The world canola indicator price (Europe Rapeseed, fob Hamburg) is forecast to rise by 2 per cent in 2016–17 (July to June) to US$425 a tonne, reflecting a significant production shortfall in the European Union and a forecast fall in supplies (production plus opening stocks) in major exporting countries. These factors are expected to outweigh a forecast fall in imports into China resulting from an expected run-down in vegetable oil stocks in that country.

World production to riseWorld oilseed production is forecast to rise by 6 per cent in 2016–17 to 551 million tonnes, primarily reflecting an expected increase in soybean production. Production of most other oilseeds and palm oil is also expected to rise. In contrast, world production of rapeseed (including canola) is forecast to fall.

World oilseed production, 2001–02 to 2016–17

Other

Mt

Sun�ower seed Rapeseed (including canola) Soybeans

f ABARES forecast.

100

200

300

400

500

600

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

2002–03

Oilseeds


World soybean production is forecast to rise by 7 per cent in 2016–17 to 337 million tonnes, largely because of an estimated 11 per cent increase in US production to a record 119 million tonnes. Soybean production is also forecast to rise in Brazil, where planting is underway. The area planted is expected to rise but by less than in recent years in response to favourable domestic corn prices. Assuming average yields, production is forecast to rise by 7 per cent to 103 million tonnes.

Global production of palm oil is forecast to rise by 10 per cent to 64 million tonnes because of an assumed improvement in weather conditions in South-East Asia.

World rapeseed (including canola) production is forecast to fall by 3 per cent to 67 million tonnes in 2016–17, largely because of a fall in production in the European Union and Ukraine resulting from unfavourable seasonal conditions. In Canada, production is estimated to have been similar to the previous year, at around 18 million tonnes. A fall in harvested area largely offset a higher average yield.

World rapeseed (including canola) production, 2001–02 to 2016–17

Other

Mt

Australia Canada China

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

2002–03

European Union

10

20

30

40

50

60

70

80

World oilseed consumption to rise on higher meal and oil demandWorld oilseed consumption (mainly crush) is forecast to rise by 3 per cent in 2016–17 to 544 million tonnes, largely because of an expected increase in the consumption of soybeans.

World consumption of soybeans is forecast to rise by 5 per cent in 2016–17 to 331 million tonnes. The United States is one of the largest consumers of soybeans. In 2016–17 its soybean consumption is forecast to rise by 3 per cent to 57 million tonnes because of strong demand for meal and oil. The increase in demand for meal is expected to be driven by livestock production and for oil by increases in human consumption and biodiesel production.

Oilseeds


In contrast to soybeans, world consumption of rapeseed (including canola) is forecast to fall by 3 per cent to 68 million tonnes—reflecting lower supplies available for crushing. The consequent fall in canola oil production is forecast to be partially offset by an expected increase in production of oil from other oilseeds and oil palm fruit.

Higher demand and greater production to lift trade in 2016–17World oilseed exports are forecast to increase by 3 per cent in 2016–17 to 158 million tonnes—reflecting higher world demand, the forecast growth in global crush and an expected increase in soybean production in major exporting countries.

World soybean exports are forecast to increase by 4 per cent in 2016–17 to 137 million tonnes, with a forecast rise in soybean meal demand in China expected to be met by higher production in Brazil and the United States. In contrast, exports from Argentina are forecast to fall by 6 per cent in 2016–17 to 9.7 million tonnes as a result of the Argentine Government’s proposed changes to export taxes. It announced in October that it would not cut its soybean export tax rate (currently set at 30 per cent) by 5 percentage points in 2017 as expected. Instead, it will cut the export tax by 0.5 percentage points a month between January 2018 and December 2019.

Rapeseed (including canola) exports are forecast to fall by 6 per cent in 2016–17 to 14 million tonnes because of a forecast fall in supplies (opening stocks and production) in Canada and Ukraine.

World soybean imports, 2001–02 to 2016–17

Other

Mt

China

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

2002–03

20

40

60

80

100

Oilseeds


World oilseed stocks to riseWorld closing stocks of oilseeds are forecast to rise by 8 per cent in 2016–17 to 96 million tonnes, driven by a forecast 7 per cent increase in soybean stocks to 83 million tonnes. In contrast to soybeans, world rapeseed (including canola) closing stocks are forecast to fall by 12 per cent to 6 million tonnes. This reflects the decline in EU production, which is expected to result in a drawdown in stocks.

World oilseed closing stocks, 2001–02 to 2016–17

Other

Mt

Rapeseed (including canola) Soybeans

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

2002–03

20

40

60

80

100

Australian oilseed production to riseAustralian oilseed production is forecast to rise by 32 per cent in 2016–17 to 5.2 million tonnes. This rise reflects an increase in area planted to cottonseed and expectations of increases in the average yield of canola following plentiful and timely spring rainfall.

Canola production is forecast to rise by 22 per cent in 2016–17 to around 3.6 million tonnes. If realised, this would be the third-highest on record. Isolated waterlogging in the eastern states (including South Australia) affected crops in some regions but this was more than offset by ample moisture, which supported yield potential elsewhere.

Production of cottonseed is forecast to rise by 65 per cent to 1.5 million tonnes in 2016–17. Area planted to cotton is estimated to have risen by 93 per cent in 2016–17 largely because of favourable soil moisture, plentiful irrigation water and an attractive return to growers relative to grain sorghum. However, the forecast average yield is lower because of an increase in dryland plantings, which have a lower yield than irrigated cottonseed.

Oilseeds


Oilseed production, Australia, 2001–02 to 2016–17

Other

Mt

Cottonseed Canola

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

2002–03

1

2

3

4

5

6

Higher production and strong international demand to underpin exportsAustralian canola exports are forecast to rise by 43 per cent in 2016–17 to 2.8 million tonnes. This forecast increase reflects a rise in Australian production and expected strong demand for Australian canola. The latter is the result of a fall in production in the European Union, a major importer, and reduced availability of supplies on the world market.

The value of canola exports is forecast to rise by 33 per cent in 2016–17 to $1.5 billion, mostly driven by larger export volumes. A small rise in the world indicator price is expected to be more than offset by an assumed appreciation of the Australian dollar.

Oilseeds


Outlook for oilseeds


Production Mt 537 521 551 5.8Consumption Mt 517 526 544 3.4– oilseed meal Mt 294 305 319 4.6– vegetable oil Mt 173 178 187 5.1Exports Mt 147 153 158 3.3Closing stocks Mt 93 89 96 7.9Stocks-to-use ratio % 18 17 18 –Soybean indicator price a US$/t 418 373 390 4.6Canola indicator price b US$/t 424 415 425 2.4

Total production kt 4 376 3 919 5 154 31.5– winter kt 3 546 2 949 3 591 21.8– summer kt 830 970 1 563 61.1

Production kt 3 540 2 944 3 581 21.6Exports c kt 2 445 1 946 2 780 42.9– value A$m 1 349 1 097 1 463 33.4

Price c (delivered Melbourne) A$/t 484 542 533 –1.7

Outlook for oilseeds

World

Australia

a US no. 2 soybeans, fob Gulf. b Europe Rapeseed, fob Hamburg, July–June. c July–June years. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; US Department of Agriculture

Canola


• The world indicator price for raw sugar is forecast to average US20 cents a pound in 2016–17, up from around US17 cents a pound in 2015–16.

• World sugar stocks are forecast to decline as a result of forecast world consumption exceeding production for the second successive year.

• The return to Australian cane growers is forecast to rise by 16 per cent in 2016–17 to $51 a tonne of cane cut for crushing as a result of higher world prices.

World sugar prices to increase in 2016–17The world indicator price for raw sugar (Intercontinental Exchange, nearby futures, no. 11 contract) is forecast to average US20 cents a pound in 2016–17 (October to September), up from around US17 cents a pound in 2015–16. Higher prices are expected because world sugar consumption is forecast to exceed world sugar production for the second successive year, resulting in a 10 per cent fall in world sugar stocks.

World sugar indicators, 2009–10 to 2016–17 a

Production

Mt2016–17USc/lb

Price (right axis)

Consumption

a Production and stocks are raw value equivalent. Years are from October to September.f ABARES forecast.

5

10

15

20

25

30

Stocks

35

70

105

140

175

210

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

SugarBenjamin K Agbenyegah

Sugar


World sugar production to rise in 2016–17World sugar production is forecast to increase by 2 per cent in 2016–17 to around 177 million tonnes, reflecting forecast increases in production in all major sugar-producing countries except India and Thailand. Producers are expected to increase area planted to cane and beet in response to relatively high returns compared with production alternatives. Favourable weather in 2016 also helped improve cane and beet yields and the commercial content of sugar.

Forecast changes in world sugar production, by country, 2015–16 and 2016–17 a

Mt

2015–16f

2016–17f

Australia

a Production in raw value equivalent. f ABARES forecast.

–8

–6

–4

–2

0

2

4

World

Other

EasternEurope

EuropeanUnion

China

Brazil

Thailand

India

Mexico

United States

Increased cane allocation to drive sugar production in BrazilSugar production in Brazil is forecast to increase by 5 per cent in 2016–17 to around 40 million tonnes. This forecast increase largely reflects an expected increase in returns from producing sugar rather than ethanol and an expected increase in the volume of sugar cane allocated to sugar production.

Millers in Brazil’s South–Central region typically account for around 90 per cent of Brazilian sugarcane production. In the first eight months of the 2016–17 season, they allocated around 47 per cent of crushed cane to sugar production. This was up from 42 per cent over the same period in the previous season, despite the Brazilian Government implementing several measures to encourage ethanol production.

Sugar


Cane allocation and sugar and ethanol price relativity, Brazil, 2007–08 to 2016–17

Ethanol

Mt

Sugar ethanol relativeprice (right axis)

Sugar

100

200

300

400

500

600

700

f ABARES forecast.

ratio2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

2007–08

6

12

18

24

30

36

42

Sugar production in China, the United States and the European Union also to riseSugar production in China is forecast at 10.5 million tonnes in 2016–17 (June to May), up from 2015–16 by around 1 million tonnes. This forecast rise mainly reflects an expected increase in cane production, driven by a forecast 2 per cent increase in area harvested. US sugar production is estimated to have increased by 6 per cent in 2016–17 to a record 8.6 million tonnes. Higher yields have contributed to increases in beet and cane production, while area planted is estimated to have remained largely unchanged. Sugar production in the European Union is estimated to have risen by 12 per cent in 2016–17 to around 17 million tonnes through higher plantings and improved beet yields.

Sugar production in India is forecast to be down 10 per cent to 24.5 million tonnes in 2016–17. Poor seasonal conditions in the key growing state of Maharashtra are expected to result in reduced area harvested. Sugar production in Thailand is forecast to decline slightly in 2016–17 to 10 million tonnes as a result of lower cane yield following severe drought conditions in key cane-growing regions in 2016.

World sugar consumption in 2016–17 to continue growingWorld sugar consumption is forecast at around 184 million tonnes in 2016–17, up from 2015–16 by around 3 million tonnes. This forecast increase is expected as a result of income and population growth, particularly in developing countries. Consumption is forecast to increase in all major sugar-consuming countries. However, forecast higher sugar prices are expected to constrain consumption growth.

Sugar


World sugar consumption, by country, 2008–09 to 2016–17 a

Other

Mt

Eastern EuropeBrazilChina

a Consumption in raw value equivalent. f ABARES forecast.

European UnionIndia

50

100

150

200

2016–17f

2014–15

2012–13

2010–11

2008–09

World sugar exports to rise in 2016–17World sugar exports are forecast to rise by 3 per cent in 2016–17 to 60 million tonnes. Forecast increases in exports from Brazil, Australia and Mexico are expected to more than offset forecast declines in exports from Thailand and India.

Sugar exports from Brazil are forecast to increase by 4 per cent in 2016–17 to reach 30.5 million tonnes, driven by forecast higher Brazilian domestic sugar production and strong import demand from Indonesia.

Mexican sugar exports are forecast to increase by 35 per cent in 2016–17 to 1.6 million tonnes—reflecting high carry-over stocks being available for export, a forecast increase in domestic production and strong import demand from the United States.

Sugar imports into the United States are forecast to be 3.2 million tonnes in 2016–17, 8 per cent higher than in 2015–16. Despite record production, the United States is expected to fill the minimum tariff-free sugar import quota specified under its World Trade Organization obligations of 1.1 million tonnes and import another 2.1 million tonnes under other free trade agreements (particularly the North American Free Trade Agreement).

Exports of sugar from India are forecast to fall by 68 per cent and from Thailand by 7 per cent as a result of forecast falls in sugar production in both countries.

Sugar


World sugar stocks to decline in 2016–17World closing stocks of sugar are forecast at around 66 million tonnes in 2016–17, down from around 73 million tonnes in 2015–16. This forecast fall reflects lower opening stocks combined with consumption being forecast to exceed production. The stocks-to-use-ratio is forecast to fall by around 4 percentage points to 36 per cent. If realised, the stocks-to-use-ratio would be at its lowest in six years.

World sugar stocks, 2009–10 to 2016–17 a

Stocks

Mt ratio

Stocks-to-use ratio(right axis)

a Stocks are raw value equivalent. Years are from October to September. f ABARES forecast.

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

20

40

60

80

100

10

20

30

40

50

Returns to Australian sugar growers forecast to riseReturns to Australian cane growers in 2016–17 are forecast at $51 a tonne of cane cut for crushing, 16 per cent higher than in 2015–16. This forecast reflects the expected Queensland Sugar Limited gross harvest pool return, which is forecast to increase by 42 per cent to $545 a tonne (International Polarity Scale).

Australian sugar production is forecast to increase by 4 per cent in 2016–17 to 5.1 million tonnes, driven by an estimated 2 per cent increase in cane production to 36 million tonnes. The increase in cane production is largely the result of an estimated 3 per cent increase in planted area to 393 000 hectares. However, average cane yield is estimated to have declined by 1 per cent following unfavourable seasonal conditions in 2015–16.

Australian sugar exports are forecast to rise by 3 per cent in 2016–17 to around 4.1 million tonnes, which is expected to result from a forecast increase in Australian production and strong import demand from the Republic of Korea, Indonesia and China. The value of Australian sugar exports in 2016–17 is forecast at around $2.4 billion, up 23 per cent from 2015–16. This reflects expected increases in world sugar prices and the volume of Australian exports.

Sugar


Sugar production, exports and returns to cane growers, Australia, 2008–09 to 2016–17 a

Production

kt2016–17$/t

Return to cane growers(right axis)

Exports

a Production and exports are in raw value equivalent. f ABARES forecast.

1 000

2 000

3 000

4 000

5 000

6 000

10

20

30

40

50

60

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

Outlook for sugar a


Production Mt 181.8 173.3 176.9 2.1– Brazil Mt 37.0 38.1 39.9 4.7Consumption Mt 178.9 180.9 183.9 1.7Exports Mt 55.6 58.5 60.1 2.7Closing stocks Mt 80.5 72.9 65.9 –9.6Stocks-to-use ratio % 45.0 40.3 35.8 –Price USc/lb 13.4 16.7 20.0 19.8

Area ’000 ha 378 381 393 3.2Production kt 4 572 4 920 5 100 3.7Exports kt 3 675 3 946 4 051 2.7– value A$m 1 643 1 922 2 361 22.8Return to cane growers A$/t 40 44 51 15.9

Outlook for sugar a

World b

Australia c

a Volumes are raw value equivalent. b October–September years. c July–June years. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; F.O. Licht, International Sugar and Sweetener Report, World Sugar Balances, Ratzeburg, Germany; F.O. Licht, International Sugar and Sweetener Report, Ratzeburg, Germany; US Department of Agriculture


• The world cotton indicator price is forecast to rise by 11 per cent to average US78 cents a pound in 2016–17, reflecting an expected significant decline in the world cotton stocks-to-use ratio.

• Lower world stocks are forecast as a result of a significant decline in global production in 2015–16.

• The average gin-gate return to Australian cotton growers is forecast to rise by 15 per cent in 2016–17 to average $590 a bale. Australian prices are expected to be supported by forecast increases in world cotton prices.

World cotton prices to average higher in 2016–17The world indicator price for cotton (Cotlook ‘A’ index) is forecast to average US78 cents a pound in 2016–17 (August to July), 11 per cent higher than in 2015–16. This forecast reflects a significant decline in the world stocks-to-use ratio for cotton in 2016–17. Opening stocks fell by around 14 per cent as a result of a significant decline in global production in 2015–16, particularly in China, India, Pakistan and the United States. Consumption is forecast to exceed production in 2016–17, despite a forecast increase in world production.

World cotton indicators, 2007–08 to 2016–17

Production

Mt2016–17USc/lb

Price (right axis)

Consumption

f ABARES forecast.

5

10

15

20

25

30

30

60

90

120

150

180

Closing stocks

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

2007–08

CottonBenjamin K Agbenyegah

Cotton


World cotton production to rise in 2016–17World cotton production is forecast to increase by 7 per cent in 2016–17 to 22.5 million tonnes, driven by a forecast 11 per cent increase in the global average yield resulting from improved seasonal conditions in most key cotton-growing regions. Higher yields are expected to be partially offset by a forecast 4 per cent decline (to 29.6 million hectares) in area planted to cotton globally, largely because of forecast declines in China, India and Pakistan. Production is forecast to rise in all major cotton-producing countries except China.

World cotton production, by country, 2007–08 to 2016–17

Rest of world

Mt

Brazil

f ABARES forecast.

0

5

10

15

20

25

30

PakistanUnited StatesIndiaChina

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

2007–08

Cotton production in India is forecast to increase by 4 per cent in 2016–17 to around 6 million tonnes. Average yield is forecast to rise by 15 per cent as a result of the timely arrival of the 2016 monsoon rains in cotton-growing areas. Area planted to cotton in India is estimated to have fallen by 10 per cent in 2016–17 to 10.8 million hectares as a result of many Indian producers switching to alternative crops after the 2015–16 cotton crop was severely damaged by whitefly.

US cotton production is forecast to be around 3.5 million tonnes in 2016–17, up 23 per cent from 2015–16. Area planted to cotton is estimated to have risen by 7 per cent to 4.1 million hectares in response to favourable domestic cotton prices. Average yield is forecast to rise by 17 per cent as a result of improved seasonal conditions.

Cotton production in Pakistan is forecast to rise by around 300 000 tonnes in 2016–17 to 1.8 million tonnes, driven by a forecast 33 per cent increase in average yield. Favourable seasonal conditions and decreased whitefly infestations are expected to improve yields from the previous season. This is expected to be partially offset by the estimated 14 per cent fall in area planted to cotton in response to relatively low domestic cotton prices at the time of planting.

Chinese cotton production is forecast to decline by 4 per cent in 2016–17 to 4.6 million tonnes, largely because of an estimated 8 per cent fall in planted area to 2.8 million hectares. The estimated fall in planted area was driven by relatively low cotton prices at the time of planting. Average yield is forecast to increase by 4 per cent to 1.64 tonnes a hectare.

Cotton


Modest growth in world cotton consumption in 2016–17World consumption of raw cotton is forecast to increase by 1 per cent in 2016–17 to around 24.5 million tonnes. Growth in world cotton consumption is expected to be constrained by forecast increases in cotton prices and strong competition from polyester and other synthetic fibres. Lower world oil prices in recent years have lowered polyester prices and increased its price-competitiveness. Higher cotton consumption is forecast in China, Bangladesh and Vietnam but declines are expected in India and Pakistan.

World monthly apparel fibre and crude oil prices, August 2013 to November 2016

USc/lb US$/barrel

Cotlook ‘A’ index

World crude oil(right axis)

20

40

60

80

100

120

20

40

60

80

100

120

Chinese polyester staple

Nov2016

May2016

Nov2015

May2015

Nov2014

May2014

Nov2013

Cotton consumption in China is forecast to increase by 1 per cent in 2016–17 to 7.7 million tonnes, mainly because the price competitiveness of domestic cotton has improved against imported yarn. The Chinese Government released raw cotton from its state reserves to domestic mills at relatively low prices in 2015–16, and these releases are expected to continue into 2016–17.

World cotton consumption by country, 2007–08 to 2016–17

Rest of world

Mt

Vietnam

f ABARES forecast.

5

10

15

20

25

30

BangladeshPakistanIndiaChina

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

2007–08

Cotton


World cotton trade to decline in 2016–17World cotton trade is forecast to fall by 1 per cent in 2016–17 to 7.6 million tonnes. Imports are expected to fall in Indonesia, Thailand and Turkey but to increase in Bangladesh, Vietnam and China. Exports from the United States and Australia are expected to increase but to decrease from India and Brazil.

US cotton exports are forecast to grow to 2.5 million tonnes in 2016–17, 31 per cent higher than in 2015–16. This forecast largely reflects high US opening stocks, the forecast increase in US production and firm import demand from China for high-quality cotton.

Raw cotton exports from India are forecast to decline by 32 per cent in 2016–17 to 849 000 tonnes and exports from Brazil are forecast to fall by 33 per cent to 631 000 tonnes. These forecast declines are expected to result from lower import demand in Indonesia, Thailand and Turkey in response to forecast increases in world cotton prices.

Cotton imports into China are forecast to be 980 000 tonnes in 2016–17, 2 per cent higher than in 2015–16. Growth in imports into China is being constrained by the Chinese Government limiting the low tariff import quota for 2017 to 894 000 tonnes and releasing raw cotton from state reserves into the domestic market.

World cotton stocks to fall in 2016–17World closing stocks of raw cotton are forecast to fall by 9 per cent in 2016–17 to 19.1 million tonnes as world consumption continues to exceed world production. Chinese cotton stocks are forecast to fall by 17 per cent but to continue to account for around 55 per cent of world closing stocks. Stocks in the rest of the world are forecast to increase by 2 per cent. The world stocks-to-use ratio is forecast to fall by 9 percentage points to 78 per cent in 2016–17.

World cotton stocks and stocks-to-use ratio, 2007–08 to 2016–17

Rest of world

Mt %

Stocks-to-use ratio(right axis)

China

f ABARES forecast.

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

2007–08

5

10

15

20

25

30

20

40

60

80

100

120

Cotton


Higher prices to support returns to Australian cotton growers in 2016–17The average gin-gate return to Australian cotton growers is forecast to average $590 a bale (227 kilograms) of lint (including the value of cottonseed and net of ginning costs) in 2016–17, up from around $512 a bale in 2015–16. The forecast increase is supported by expected increases in world cotton prices.

Higher Australian cotton production in 2016–17Australian cotton production is forecast to increase by 64 per cent in 2016–17 to around 1 million tonnes, driven by an estimated increase in planted area. However, average yield is expected to fall and partially offset the increase in planted area. Average yield is expected to fall because of a forecast rise in the share of area planted to dryland cotton.

Planted area is estimated to have increased by 93 per cent to 520 000 hectares. Area planted to irrigated cotton is estimated to have risen by 76 per cent to 370 000 hectares in response to an expected increase in cotton returns and improved supplies of irrigation water. As at 24 November 2016, the average storage level of public irrigation dams serving Australia’s cotton-growing regions was around 75 per cent of capacity, compared with 31 per cent at the same time in 2015.

Area planted to dryland cotton is estimated to have more than doubled to 150 000 hectares in response to an expected increase in cotton returns relative to production alternatives and favourable planting conditions.

Storage levels, main irrigation dams serving Australia’s cotton-growing regions, as at 24 November 2016

2015

%

2016

Oth

er Q

ueen

slan

d

Bear

dmor

e (S

t Geo

rge)

Fairb

airn

(Em

eral

d)

Lesl

ie (D

arlin

g D

owns

)

Oth

er N

ew S

outh

Wal

es

Burr

endo

ng (M

acqu

arie

)

Pind

ari (

Mac

inty

re)

Keep

it (N

amoi

)

Gle

nlyo

n (M

acin

tyre

)

Cope

ton

(Gw

ydir)

20

40

60

80

100

120

Note: Storage levels are presented as a percentage of total operational capacity.

Cotton


Australian cotton exports to rise in 2016–17Australian raw cotton exports are forecast to be 772 000 tonnes in 2016–17, 44 per cent higher than in 2015–16. This forecast reflects a build-up of stocks over the previous two seasons, rising production and firm world import demand for high-quality cotton. The value of Australian cotton exports is forecast to increase by 56 per cent in 2016–17 to around $2 billion, reflecting expected higher exports and prices.

Cotton production, exports and gin-gate returns, Australia, 2007–08 to 2016–17

Production

kt2016–17$/bale

Gin-gate return a(right axis)

Exports

a Value of lint and cottonseed, less ginning costs. f ABARES forecast.

100

200

300

400

500

600

700

200

400

600

800

1 000

1 200

1 400

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

2007–08

Cotton


Outlook for cotton

Category unit 2014–15 2015–16 2016–17 f % change

Production Mt 26.0 21.0 22.5 7.1Consumption Mt 24.2 24.2 24.5 1.2Exports Mt 7.7 7.7 7.6 –1.3Closing stocks Mt 24.3 21.0 19.1 –9.0Stocks-to-use ratio % 100.4 86.8 78.1 –Cotlook ‘A’ index USc/lb 70.8 70.4 78.0 10.8

Area harvested ’000 ha 197.0 270.0 520.0 92.6Lint production kt 527.8 626.2 1 029.3 64.4Exports kt 681.2 535.8 771.9 44.1– value A$m 1 546.1 1 263.6 1 971.8 56.0Gin-gate return c A$/bale 515.6 511.7 590.3 15.4

Outlook for cotton

World a

Australia b

a August–July years. b July–June years. c Value of lint and cottonseed less ginning costs. f ABARES forecast.Sources: ABARES; Australian Bureau of Statistics; US Department of Agriculture

Agriculture

Livestock


a Australian weighted average saleyard price of beef cattle. b Australian weighted average saleyard price of lamb. c Eastern Market Indicator price, clean equivalent. d Farmgate milk price.

LIVESTOCK

Beef and vealLow cattle numbers and herd rebuilding are forecast to drive domestic cattle prices higher.

7%to 540 Ac/kg

in 2016–17a

Sheep meatLamb prices are forecast to increase, re�ecting increased restocker demand as growers rebuild �ocks.

12%to 595 Ac/kg

in 2016–17

b

WoolThe Australian Eastern Market Indicator is forecast to increase, re�ecting lower world wool production and rming export demand.

4%to 1 300 Ac/kg

in 2016–17c

DairyThe Australian average farmgate milk price is forecast to recover slightly, re�ecting a forecast rise in world prices.

1%t0 43.5 Ac/L

in 2016–17d


Beef and vealJack Mullumby

• The Australian weighted average saleyard price of beef cattle is forecast to average 540 cents a kilogram (dressed weight) in 2016–17, representing a 7 per cent increase from the previous year.

• Herd rebuilding is expected to result in lower Australian cattle slaughter and beef production.

• The value of Australian beef exports is forecast to decline in 2016–17 as volumes and unit export values fall.

• Average unit values for live feeder slaughter cattle are forecast to rise in 2016–17, but lower exports are expected to result in the value of trade declining year-on-year.

Restocker demand to drive cattle prices higherThe Australian weighted average saleyard price of beef cattle is forecast to average 540 cents a kilogram (dressed weight) in 2016–17, representing a 7 per cent increase from the previous year. The forecast rise reflects strong competition at saleyards between restockers, processors, lotfeeders and exporters because cattle supplies are expected to be limited. Low cattle supplies are expected as a result of herd rebuilding in major cattle-producing regions across Australia and the relatively small opening national cattle herd. The 2016–17 opening Australian cattle herd is estimated to have been 26.1 million head, the smallest since 1995–96.

Saleyard prices rose strongly in the first half of 2016–17 as restocker demand increased in response to improved seasonal conditions. Restocker demand for young cattle is expected to remain strong in the second half of 2016–17, assuming favourable seasonal conditions continue. However, demand for cows and heavy steers is forecast to weaken. This is in response to lower export returns resulting from increased competition in Australia’s major export markets. This is expected to place downward pressure on saleyard prices of these cattle and constrain the forecast rise in the weighted average saleyard price.

Beef and veal


Weighted average saleyard price of beef cattle and opening cattle inventory, Australia, 2007–08 to 2016–17

Opening cattleinventory

millionhead

Saleyard price(right axis)

2016–17Ac/kg

f ABARES forecast.

100

200

300

400

500

600

25

26

27

28

29

30

2016–17f

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

2008–09

2007–08

Cattle slaughter and beef production to fallAustralian cattle and calf slaughter is forecast to fall by 11.4 per cent in 2016–17 to 7.8 million head, with herd rebuilding expected to limit the supply of cattle for slaughter. Improved seasonal conditions are expected to support higher average slaughter weights, partially offsetting the impact on beef production from the forecast fall in slaughter numbers. In the September quarter 2016, adult cattle slaughter weights averaged 3 per cent higher than the same period in the previous year. As a result, beef and veal production is forecast to fall by 9 per cent to 2.1 million tonnes (carcase weight).

Herd to expandThe Australian cattle herd is forecast to expand by 2 per cent in 2016–17 to 26.7 million head, mainly reflecting lower cattle turn-off and an expected increase in calf additions. This will be the first increase in the national beef cattle herd in three years. The national herd is forecast to remain 9 per cent below the 2012–13 peak of 29.3 million head.

Value of beef exports to fallThe value of Australian beef exports is forecast to be $6.9 billion in 2016–17, 17 per cent lower than the previous year. The forecast contraction mainly reflects an expected 15 per cent fall in the volume of beef exports to 990 000 tonnes (shipped weight). Export unit values are also expected to decline as a result of increasing competition in major export markets. In the September quarter 2016, average export unit values for Australian beef fell year-on-year by 2.5 per cent.

Beef and veal


Beef exports to the United States to fallAustralian beef exports to the United States are forecast to fall by 31 per cent in 2016–17 to 230 000 tonnes (shipped weight). The forecast decline reflects the fall in Australian beef supplies available for export and weakening US demand for imported beef. US demand for imported beef is weakening in response to rising domestic production, which was 7 per cent or 181 000 tonnes (carcase weight equivalent) higher in the September quarter 2016 than in the September quarter 2015. US beef imports fell by around 16 per cent or 63 000 tonnes in the September quarter 2016, the fourth consecutive quarter to record a year-on-year fall. US demand for imported beef is expected to remain weak through the remainder of 2016–17, as US beef production expands further.

Rising US beef production is also forecast to result in increased US beef exports creating stronger competition for Australian beef in Japan and the Republic of Korea. In the September quarter 2016, US beef exports rose year-on-year to Japan by 26 per cent and to Korea by 60 per cent.

Year-on-year change in quarterly beef production, imports and exports, United States, December 2013 to September 2016

Production

kt (cwe)

ImportsExports

Sep2016

Mar2016

Sep2015

Mar2015

Sep2014

Mar2014

–200–150–100–50

050

100150

200250

Chilled beef exports to Japan forecast to fallAustralian beef exports to Japan are forecast to decline by 3 per cent in 2016–17 to 260 000 tonnes, largely because of a forecast fall in exports of chilled beef. Australian exports of chilled beef to Japan are expected to face increasing competition from US exports over the year. In the September quarter 2016, Japanese imports of US chilled beef were 44 per cent higher than in the same period in 2015. In the September quarter 2016, imports of chilled beef from Australia declined by around 3 per cent.

Beef and veal


Exports to Republic of Korea to exceed quota limitAustralian beef and veal exports to the Republic of Korea are forecast to rise by 4 per cent in 2016–17 to 180 000 tonnes, driven by strong consumption growth and falling domestic production. In the September quarter 2016, Australian beef exports to Korea were 6 per cent higher than in the same period in the previous year. However, total Korean imports of Australian beef in 2016 reached 162 794 tonnes during October—exceeding the calendar year quota of 160 829 tonnes. Out-of-quota shipments in the remainder of 2016 will attract the safeguard trigger tariff rate of 40 per cent, compared with the in-quota tariff rate of 32 per cent negotiated under the Korea–Australia Free Trade Agreement. The higher tariff rate is expected to reduce demand for Australian beef in Korea over the remainder of 2016.

Exports to China to declineAustralian beef exports to China are forecast to fall by 26 per cent in 2016–17 to 95 000 tonnes, largely because of low supplies available for export and increasing competition from low-cost suppliers like Brazil. Despite the forecast decline, China is expected to remain an important market for Australian beef, accounting for around 10 per cent of all Australian beef exports.

The value of Australian beef exports to China is forecast to fall by 27 per cent in 2016–17 to $627 million as a result of expected lower export prices and the forecast fall in the volume of exports. Rising competition in the Chinese market, particularly from Brazil, continues to place downward pressure on average export unit values for Australian beef. In the September quarter 2016, export unit values averaged 2.2 per cent less than the average for the September quarter 2015.

Value of live export trade to decline despite higher pricesExports of Australian live feeder slaughter cattle are forecast to fall by 22 per cent in 2016–17 to 865 000 head. The forecast reduction mainly reflects anticipated lower shipments to Indonesia, following the allocation of third trimester (September 2016 to December 2016) permits. This is around a third less than the total exported over the same period in the previous year.

The value of Australian live feeder slaughter cattle exports is also forecast to decline but by only 17 per cent to $1.1 billion. The contraction in export numbers is expected to be partially offset by higher average export unit values. These are expected to mirror rises in average saleyard prices in Australia in 2016–17. In the September quarter 2016, Australian cattle prices rose strongly, while average export unit values for live feeder slaughter cattle rose to around $1 200 a head. In real terms this is the third-highest quarterly average on record and represents a 15 per cent increase on the September quarter 2015.

Beef and veal


Quarterly live cattle exports and real average export unit value, Australia, September 1988 to September 2016

Live exports

’000head

Real export unit value(right axis)

Sep 2016$/head

200

400

600

800

1 000

1 200

1 400

75

150

225

300

375

450

525

Sep2016

Sep2012

Sep2008

Sep2004

Sep2000

Sep1996

Sep1992

Sep1988

Outlook for beef and veal


Cattle numbers ab million 27.4 26.1 26.7 2.3– beef cattle a million 24.6 23.3 24.0 3.0Slaughterings ’000 10 103 8 796 7 790 –11.4Production c kt 2 662 2 344 2 140 –8.7

– to Japan kt 304 268 260 –3.0– to United States kt 471 334 230 –31.1– to China kt 125 128 95 –25.8– to Korea, Rep. of kt 157 173 180 4.0– total kt 1 349 1 167 990 –15.2– value A$m 8 858 8 285 6 895 –16.8Live feeder/slaughter cattle exports d ’000 1 295 1 114 865 –22.4– value A$m 1 163 1 280 1 060 –17.2

– saleyard Ac/kg cw 364 505 540 6.9– US import e USc/kg 551 451 448 –0.7– Japan import g USc/kg 667 650 682 4.9

Outlook for beef and veal

Exports (shipped weight)

Price

a At 30 June. b Includes dairy cattle. c Carcase weight. d Includes buffalo. e Cow 90CL US cif price. f ABARES forecast. g Chilled grassfed fullset Japan cif price. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resources, Canberra; Meat & Livestock Australia


Sheep meat and woolPeter Berry

• A strong improvement in seasonal conditions has enabled accelerated flock rebuilding, and the national flock is forecast to grow to 71.5 million head by the end of June 2017.

• Lamb and sheep prices are forecast to average higher in 2016–17 as a result of increased restocker demand and firm export demand for sheep meat.

• The Australian Eastern Market Indicator price of wool is forecast to average higher in 2016–17, supported by a forecast modest improvement in consumer demand for woollen apparel and an expected fall in global wool supply.

Lamb and sheep prices forecast to rise in 2016–17The weighted average saleyard price of lamb is forecast to average 595 cents a kilogram in 2016–17, up 12 per cent from the previous year. This forecast increase is expected to be driven by strong restocker demand as graziers look to increase sheep numbers in response to highly favourable seasonal conditions and improved pastures, and firm export demand for lamb.

Lamb saleyard price and slaughter, Australia, 2006–07 to 2016–17

Lamb slaughter

millionhead

2016–17c/kg

Lamb saleyardprice (right axis)

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

5

10

15

20

25

150

300

450

600

750

Sheep meat and wool


The average saleyard price of sheep is forecast to increase by 19 per cent in 2016–17 to 375 cents a kilogram, driven by an expected strong increase in demand for breeding ewes and sharply lower turn-off due to flock rebuilding.

Sheep saleyard price and slaughter, Australia, 2006–07 to 2016–17

Sheep slaughter

millionhead

2016–17c/kg

Sheep saleyardprice (right axis)

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

100

200

300

400

500

3

6

9

12

15

Wool prices to average higherThe Eastern Market Indicator price of wool is forecast to increase by 4 per cent in 2016–17 to average 1 300 cents a kilogram clean. Assumed moderate economic growth in the major wool-consuming economies of the United States and China is expected to result in modest increases in consumer incomes and demand for woollen apparel.

Wool exports, five major producers, 2006–07 to 2015–16

Uruguay

kt

South Africa

0

ArgentinaNew ZealandAustralia

200

400

600

800

1 000

2015–16

2013–14

2011–12

2009–10

2007–08

Sheep meat and wool


Wool prices have been supported in recent years by a trend of falling world wool production (particularly fine wool) as a result of declining sheep numbers and an increasing proportion of meat breeds (often with coarser wools) in the flocks of major wool-exporting countries. In 2016–17 a forecast further fall in global wool production (and consequently reduced fine wool supplies) relative to demand is expected to support increases in world wool prices.

Sheep numbers to increase in 2016–17The national flock is forecast to increase by 5 per cent in 2016–17 to around 71.5 million head. This forecast is driven by significantly improved pastures during the first half of the year supporting higher stocking rates in most sheep-producing regions and assumed favourable seasonal conditions through the summer. Graziers have responded to improved conditions by retaining more lambs and ewes for breeding. Yardings of lambs were down by 7 per cent and of sheep by 25 per cent over the five months to November compared with the same period a year earlier. This was partly a result of wet weather and flooding, which made transport difficult in parts of South Australia, Victoria and New South Wales. However, the widespread reduction in turn-off is broadly indicative of flock rebuilding.

Sheep flock, Australia, 2004–05 to 2016–17

Wethers and rams

millionhead

Lambs

0

Ewes

20

40

60

80

100

120

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

Lamb and mutton production to fallLamb slaughter is forecast to fall by 1 per cent to around 22.8 million head in 2016–17 as a result of reduced rates of turn-off. Improved seasonal conditions are expected to increase slaughter weights in the second half of 2016–17, but when averaged across 2016–17 as a whole slaughter weights are forecast to be largely unchanged year-on-year. As a result, production is forecast to fall to 510 000 tonnes for the year.

National sheep slaughter is forecast to fall by 20 per cent to 6.5 million head in 2016–17 as a result of greater retention of ewes for breeding. Consequently, mutton production is forecast to fall to 156 000 tonnes for the year.

Sheep meat and wool


Sheep meat production, Australia, 2004–05 to 2016–17

Mutton

kt

Lamb

0

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

100

200

300

400

500

600

700

800

Australian shorn wool production to remain largely unchanged in 2016–17Australian shorn wool production is forecast to remain largely unchanged at around 325 000 tonnes greasy in 2016–17. This reflects two countervailing influences. Lower opening sheep numbers are forecast to result in a fall of almost 2 per cent in the number of sheep shorn to 72.2 million head. However, this fall is expected to be offset by a forecast 2 per cent increase in average fleece weights to 4.5 kilograms a head. Increased fleece weights are expected to be driven by the assumed improvement in seasonal conditions, with the bulk of these gains to be realised in the second half of the year. Total wool production—which includes wool on sheepskins and slipe wool (wool chemically retrieved from sheepskins and lambskins)—is forecast to fall slightly as a result of reduced sheep and lamb slaughter.

Shorn wool production and price, Australia, 2006–07 to 2016–17

Shorn wool production

ktgreasy

2016–17Ac/kg clean

EMI (right axis)

f ABARES forecast.

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

100

200

300

400

500

300

600

900

1 200

1 500

Sheep meat and wool


Lamb export volumes to fall but values to rise in 2016–17Australian lamb export volumes are forecast to fall by 1 per cent in 2016–17 to 239 000 tonnes, reflecting forecast falls in lamb slaughter and production and expected weaker demand from the Middle East. Australian lamb exports to the Middle East are forecast to fall by 2 per cent to around 66 000 tonnes in 2016–17. The relatively high price of Australian lamb compared with local supplies is expected to dampen demand for Australian sheep meat in some Middle Eastern countries in 2016–17.

Demand for lamb is expected to remain firm in most other major export markets. Lamb exports to the United States are forecast to increase by 1 per cent to 54 000 tonnes in 2016–17. This reflects an assumed modest improvement in economic growth. Lamb exports to China are forecast to grow marginally to around 36 500 tonnes for the year, reflecting the combined effects of assumed moderate growth in import demand and a forecast reduction in competing supplies from New Zealand.

Australian lamb exports to major markets, 2014–15 and 2015–16

2014–152015–16

kt

10

20

30

40

50

60

70

80

PapuaNew Guinea

EuropeanUnion

ChinaUnitedStates

MiddleEast

Firm export demand for lamb in major markets is forecast to result in a 5 per cent increase in average export unit values to $7.10 a kilogram in 2016–17. This would more than offset the effect of forecast lower export volumes and result in a 4 per cent increase in the value of exports to $1.7 billion for the year.

Sheep meat and wool


Mutton exports to fall sharplyAustralian mutton exports are forecast to fall by almost 20 per cent to 119 000 tonnes in 2016–17 as a result of sharply lower mutton production. The fall in export volumes is expected to outweigh the effect of forecast higher export unit values and result in a 12 per cent fall in the total value of mutton exports to around $584 million for the year.

Australian mutton exports to major markets, 2014–15 and 2015–16

2014–152015–16

kt

10

20

30

40

50

60

OtherUnitedStates

ChinaAsia excludingChina

MiddleEast

Competing supplies from New Zealand forecast to fallNew Zealand is the world’s largest exporter of sheep meat and Australia’s main competitor in the export markets of Asia and the Middle East. NZ sheep meat production and exports are forecast to fall in 2016–17 as a result of reduced sheep numbers. Beef + Lamb New Zealand estimates that 2016–17 opening sheep numbers were 3 per cent lower at 28.3 million head than the previous year. In 2016–17 NZ slaughter is forecast to fall, with graziers expected to retain more ewes and lambs for flock rebuilding. As a result, NZ lamb exports are forecast to fall by 1.6 per cent and mutton exports by 3.9 per cent for the year.

Live exports to increase moderately in 2016–17Australia’s live sheep exports are forecast to increase by 2 per cent in 2016–17 to around 1.9 million head. Most live sheep exports come from Western Australia, where seasonal conditions have not been as favourable as in the eastern states. However, growth in Australian supply of sheep for export will be constrained by lower opening sheep numbers and competition for stock from the sheep meat–processing sector and graziers seeking to rebuild their flocks.

Sheep meat and wool


The Middle East remains Australia’s key export market for live sheep, and on average over the past few years this region has accounted for more than 95 per cent of Australia’s total live exports. However, in 2015–16 lower oil revenues led some governments in the region to cut consumer price support for food and other staples. This contributed to reduced import demand and led to a 15 per cent fall in Australian exports of live sheep to the Middle East for the year.

Australian live exports to Middle Eastern markets, 2014–15 and 2015–16

2014–152015–16

’000head

100

200

300

400

500

600

700

800

OmanJordanQatarUnited Arab Emirates

BahrainKuwait

In 2016–17 higher economic growth is assumed for the Middle East region. This is expected to result in improved import demand for live sheep. Continued low oil prices will remain a key risk to this forecast, and governments in the region could respond with new economic reforms. These could result in further falls in consumer demand.

Wool exports to fall slightlyAustralian wool exports are forecast to fall by around 1 per cent to 411 000 tonnes greasy in 2016–17. The value of Australian wool exports is expected to rise by 3 per cent to around $3.38 billion as a result of a forecast increase in wool prices.

China remains the key export market for Australian wool, accounting for 76 per cent of Australian exports by volume in 2015–16. In 2016–17 wool exports to China are forecast to increase by 1 per cent to 320 000 tonnes, reflecting strengthening processor demand and the refill of inventories. Increased exports to China are expected to come at the expense of exports to some smaller markets for Australian wool.

Sheep meat and wool


Australian wool exports, by destination, 2006–07 to 2016–17

Other

ktgreasy

Republic of KoreaItalyIndiaCzech RepublicChina

100

200

300

400

500

600

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

f ABARES forecast.

Slow growth in consumer demand for woollen apparel in 2016–17In 2016–17 assumed moderate economic growth in the main consuming countries is expected to support only limited growth in global consumption of woollen apparel and textiles.

Recent trade data released by the US Office of Textiles and Apparel indicate that US imports of wool products for the nine months to September 2016 were down by almost 9 per cent to 404 million square metre equivalents (year-on-year), while the value of these imports fell by almost 8 per cent to US$6.7 billion.

In 2016–17 assumed moderate economic growth in the United States, together with an assumed improvement in US consumer confidence, is forecast to result in a modest increase in imports of woollen apparel.

In the European Union, economic growth and consumer confidence have remained relatively weak in 2016 and together with a weaker euro have negatively affected consumer demand. In the seven months to July 2016, the volume of EU imports of woollen apparel fell by 3 per cent and the value fell by almost 4 per cent to €1.36 billion compared with the same period a year earlier. The volume of EU exports of woollen apparel also fell by 3 per cent but the value increased marginally to €2.4 billion. In 2016–17 an assumed continuation of weak economic growth in the European Union is expected to result in static to low growth in consumer purchases of woollen goods.

In China, recent data from the National Bureau of Statistics indicate that its domestic sales of garments made of all fibres (not just wool) were up by 7 per cent in value terms in the nine months to September 2016 compared with the same period a year earlier. In 2016–17 China’s domestic consumption of woollen goods is expected to grow at a robust but slower rate, in line with an assumed slowing in economic growth.

Sheep meat and wool


Outlook for sheep meat and wool


Sheep numbers a million 70.9 68.4 71.5 4.5Sheep shorn million 76.9 73.4 72.2 – 1.6

Lambs ’000 22 867 23 131 22 800 –1.4Sheep ’000 9 022 8 127 6 500 –20.0

Lamb b kt 507 516 510 –1.2Mutton b kt 214 196 156 –20.4

– shorn kt 346 325 325 0.0– other c kt 81 79 75 –5.1– total kt 427 404 400 –1.0

Lamb kt swt 242 242 239 –1.2– value $m 1 695 1 640 1 698 3.5Mutton kt swt 169 148 119 –19.6– value $m 778 663 584 –11.9Live sheep ’000 2 180 1 859 1 900 2.2– value $m 245 228 247 8.3

– volume (greasy equivalent) kt 459 417 411 –1.4– to China kt 352 316 320 1.3– value d $m 3 154 3 283 3 375 2.8

Lambs e c/kg cw 518 533 595 11.6Sheep e c/kg cw 332 316 375 18.7Eastern Market Indicator g c/kg 1 102 1 253 1 300 3.8a At 30 June. b Carcase weight. c Includes wool on sheepskins, fellmongered and slipe wool. d Balance of payments basis. e Saleyard prices. f ABARES forecast. g Clean equivalent. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Australian Wool Exchange; Department of Agriculture and Water Resources, Canberra

Outlook for sheep meat and wool

Wool production (greasy)

Slaughterings

Production

Exports

Prices

Wool


DairyTim Whitnall

• World dairy product prices are forecast to rise slightly as global exportable supplies contract and demand strengthens.

• Australian milk production is forecast to fall, reflecting lower herd numbers and yields.

• Australian farmgate milk prices are forecast to rise modestly, following the forecast rise in world prices.

World prices to recover modestly in 2016–17Average world prices for dairy products are forecast to increase in 2016–17 as a result of lower production and exports from some major dairy exporters, and some strengthening of demand for dairy products in large import markets. Average annual prices are forecast to rise by 10 per cent to US$3 450 a tonne for butter, by 6 per cent to US$3 400 a tonne for cheese, by 10 per cent to US$2 500 a tonne for whole milk powder and by 9 per cent to US$2 150 a tonne for skim milk powder. These forecast increases represent a modest recovery in world prices after significant falls over the two years to 2015–16.

World dairy prices, 2006–07 to 2016–17

2016–17US$/t

f ABARES forecast.

Skim milk powderCheeseWhole milk powderButter

1 000

2 000

3 000

4 000

5 000

6 000

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

Dairy


Global supplies to contractMilk production in New Zealand is forecast to decline by 1 per cent in 2016–17, largely because of a contraction in the dairy herd in 2015–16. Producers reduced the size of their dairy herds in response to two years of low farmgate milk prices. However, average milk yield per cow is forecast to increase and partially offset the effect on production of lower herd numbers. The higher average yield is expected to result from additional use of purchased fodder, which will become more viable as farmgate prices rise with world prices.

EU milk production is forecast to fall by 1 per cent in the 2016–17 marketing year (April to March), largely because of adverse summer weather and a European Commission dairy support package to reduce production. Production fell by 1.5 per cent over the summer months (June to August) year-on-year, largely because of wet and cloudy conditions in north-western Europe. The new European Commission dairy support package will result in payments being made to subscribed dairy farmers who reduce their milk production over a designated three-month window some time between October 2016 and March 2017. The package is expected to reduce production most in some of the largest dairy-producing member countries such as France and Germany. National governments in those countries will provide funding in addition to that available from the European Commission.

Demand to strengthen in ChinaChinese demand for dairy products is forecast to remain relatively strong in 2016–17. However, growth in imports is forecast to be slower than in the previous year due to a slowing economy. Import growth is expected to differ between products, with imports of higher valued products expected to increase at a faster rate than those of bulk commodities such as milk powders.

Imports of whole milk powder grew by 6 per cent in 2015–16 to 400 000 tonnes. This represents much slower growth than in 2013–14, when imports of whole milk powder grew by 68 per cent and of skim milk powder by 107 per cent. In 2015–16 imports of skim milk powder fell by 2 per cent to 205 000 tonnes. Chinese imports of milk powders are expected to increase in 2016–17 following a drawdown of stocks in 2015–16. However, increases are expected to be marginal as a result of a forecast rise in world prices and slowing demand for powders by Chinese manufacturers of milk beverages and infant milk formula.

Imports into China of infant milk formula increased by 42 per cent in 2015–16 to a record 200 000 tonnes, of butter by 53 per cent to a record 65 000 tonnes and of liquid milk by 62 per cent to a record 468 000 tonnes. Domestic demand for higher valued products such as liquid milk and infant milk formula is expected to continue to strengthen as Chinese incomes rise and consumers increasingly prefer products from EU, NZ and Australian producers, which are perceived as being high quality.

However, new Chinese Government regulations create some uncertainty for the overall infant formula growth rate in 2016–17. Manufacturers must register their formulas (limited to a maximum of nine different formulations per firm) with Chinese authorities by 31 December 2017. Exporters of infant milk formula into China are expected to face price pressure over the next year, reflecting the destocking of discontinued infant formula lines.

Dairy


Australian production to fallThe average Australian farmgate milk price is forecast to recover slightly in 2016–17 to 43.5 cents a litre. This compares with 43.0 cents a litre received in 2015–16 (exclusive of the support package payments made to Murray Goulburn suppliers). The average farmgate milk price is expected to rise as a result of a forecast rise in world prices. However, the increase in farmgate prices by some major processors will be from conservative opening prices, which will constrain the recovery in the national average farmgate price. These processors opened the current season with conservative milk prices following significant write-downs in profits in 2015–16 and greater scrutiny of farmgate milk pricing after some late-season step-downs in that year.

Australian milk production is forecast to fall by 6 per cent in 2016–17 to 9 billion litres. In the first three months of 2016–17 it averaged 10 per cent lower year-on-year as a result of lower opening cow numbers and wet conditions in key producing regions in Victoria, South Australia and Tasmania. Cow numbers at the start of the season were 1.5 per cent lower than in the previous year because of increased end-of-season herd culling. This was largely in response to step-downs in farmgate milk prices in south-eastern dairy regions and reduced demand for milk by WA processors. Production is forecast to increase over the remainder of 2016–17 in response to low input costs, especially for feed, and an assumed improvement in seasonal conditions.

Dairy cow numbers are forecast to fall by 4 per cent to 1.6 million head by the end of 2016–17. This is in response to the low farmgate milk price environment and further weakening in demand for milk by WA processors.

Milk production and farmgate milk price, Australia, 2006–07 to 2016–17

Manufacturing milk

billion L2016–17$Ac/L

Market milk

f ABARES forecast.

Average farmgatemilk price (right axis)

2

4

6

8

10

12

14

10

20

30

40

50

60

70

2016–17f

2014–15

2012–13

2010–11

2008–09

2006–07

Dairy


Value of Australian dairy exports to remain unchangedThe value of Australian dairy exports is forecast to remain largely unchanged in 2016–17 at $3 billion. A forecast fall in the overall volume of dairy exports is expected to be largely offset by forecast increases in world prices and a greater volume of exports of higher valued products. The export volume of products such as butter, cheese and skim milk powder is expected to fall as a result of forecast lower domestic production. However, the export volume of higher valued dairy products, such as infant milk formula, is expected to grow. This is particularly the case for exports to China, where Australian dairy products have a reputation for high quality.

Outlook for dairy


Cow numbers a ’000 1 689 1 663 1 600 – 3.8Milk yields L/cow 5 761 5 736 5 625 – 1.9

Total milk ML 9 732 9 539 9 000 – 5.7– market sales ML 2 485 2 489 2 500 0.4– manufacturing ML 7 247 7 050 6 500 – 7.8Butter b kt 119 118 117 – 0.8Cheese kt 344 344 344 0.0Whole milk powder kt 97 66 60 – 9.1Skim milk powder kt 242 256 211 – 17.6Farmgate milk price Ac/L 48.5 43.0 43.5 1.2Value of exports A$m 2 876 3 001 3 006 0.2

Butter US$/t 3 483 3 146 3 450 9.7Cheese US$/t 3 921 3 200 3 400 6.3Skim milk powder US$/t 2 592 1 975 2 150 8.9Whole milk powder US$/t 2 775 2 269 2 500 10.2

Australia

World prices

Production

Outlook for dairy

a At 30 June. b Includes the butter equivalent of butter oil, butter concentrate, ghee and dry butterfat. f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Dairy Australia

Articles


The EU beef industryJack Mullumby and Matthew Howden

The Australian Government is working towards commencing negotiations on a free trade agreement (FTA) with the European Union, one of the largest consumers of beef in the world. Access to the EU beef market is controlled by tariff-rate quotas, relatively high out-of-quota tariffs and strict sanitary requirements. As a result, imported beef comprises only a small proportion of total EU beef consumption.

The EU beef market is a high-value market that is attractive to beef-exporting countries like Australia. In the past, partner nations have benefited from preferential access to the EU beef market, which has led to tangible growth in their beef exports. Improved market access for Australia would provide real benefits for Australian beef exporters. This article examines the EU beef market and the policies that support it to better understand how Australian exporters could gain from such opportunities.

EU beef consumptionBetween 2000 and 2015 the European Union accounted for 13 per cent of world beef consumption annually. It is the third-largest consumer of beef in the world behind the United States and Brazil. In the 15 years to 2015, EU consumption of beef remained relatively steady at around 8.1 million tonnes (carcase weight) a year (Figure 1). The largest consuming member state is France, accounting for around 20 per cent of total EU consumption. Other significant consumers of beef include Italy (15 per cent), the United Kingdom (15 per cent) and Germany (13 per cent) (European Commission 2016f).

The EU beef industry


FIGURE 1 Total and per person beef consumption, European Union, 2000 to 2015

Rest of European Union

Mt (cw)

EU per person(right axis)

ItalyUnited KingdomGermanyFrance

kg/person

Sources: European Commission 2016f; FAO 2016

2

4

6

8

10

12

14

16

18

20

201520122009200620032000

Per person beef consumption in the European Union varies across member states, ranging from around 60 kilograms a year in both Luxembourg and Denmark to less than 10 kilograms each in Slovakia, Bulgaria, Lithuania and Poland. For the European Union as a whole, per person beef consumption averaged 15.1 kilograms in 2015, 12 per cent lower than in 2000.

The decline in EU per person beef consumption reflects contractions in more than half of all member states (European Commission 2016f). Following the 2008 global financial crisis, falling incomes and high beef prices contributed to a fall in per person beef consumption (Charlebois, McCormick & Juhasz 2016; European Commission 2015a). The downward trend has also been linked to human and animal health and disease concerns (Ekmekcioglu et al. 2016) and environmental and animal welfare issues (Morgan & Prakash 2006; Westhoek et al. 2014).

EU beef production and cattle herdAlmost all beef consumed in the European Union is produced domestically. The European Union has been the third-largest beef producer in the world since 2000. However, beef production is largely a by-product of milk production because two-thirds of the cows in the European Union are dairy breeds (Figure 2). The remainder of the EU cow herd are beef breeds and are concentrated in Western Europe. A third of all EU beef breed cows are in France, with Spain (15 per cent) and the United Kingdom (13 per cent) also accounting for a significant proportion of the EU beef cattle herd (European Commission 2016f).

The EU beef industry is reliant on dairy slaughter, so any changes in the EU dairy industry have implications for its beef industry. Over the 15 years to 2015, EU dairy cow numbers fell by 3.5 million head or 13 per cent. This resulted in the total number of cattle in the European Union contracting by around 6 per cent to 88.8 million head and EU beef production falling by 8 per cent to 7.8 million tonnes (European Commission 2016e).



FIGURE 2 Cattle herd and proportion of dairy cows, European Union, 2000 to 2015

EU cattle herd

millionhead

Share of dairy cows in the total EU cow herd (right axis)

%

Source: European Commission 2016f

60

70

80

90

100

201520122009200620032000

62

64

66

68

70

EU support policiesCommon Agricultural PolicyThe European Union supports the beef and cattle industries through the Common Agricultural Policy (CAP). The CAP supports all agricultural sectors in member states (see Howden, McCarthy & Hyde 2016), but two CAP mechanisms have provided targeted and specific support to the EU beef and cattle industries. These are the dairy milk quota system and a proportion of the direct payments budget called voluntary coupled support (VCS).

Dairy milk quota systemBetween 1984 and 2015, the milk quota system supported domestic dairy prices by limiting milk production (Réquillart 2008). However, the quota markedly reduced the size of the EU cattle herd and as a result limited EU beef production. During that period, productivity improvements in the dairy sector led to an increase in milk yields. As a result, total cattle numbers contracted because fewer dairy cows were required to meet EU production quotas (Huettel & Jongeneel 2011). More efficient milk-producing member states, which had the greatest yield improvements, reduced their dairy herds by a larger proportion than less efficient dairy-producing states.

In France for example, milk yields rose by 32 per cent between 1990 and 2015, resulting in dairy cow numbers contracting by 22 per cent or 1 million head (European Commission 2016f). The shrinking EU dairy cattle herd reduced the supply of cattle available for slaughter over this period and limited total beef production. Cattle slaughter in France fell from 6.7 million head in 1990 to around 4.7 million head in 2015. Beef production contracted by 16 per cent or 285 000 tonnes.



On 1 April 2015 the European Union abolished the milk quota production scheme. Since then, milk production has increased in some EU member states (Howden, McCarthy & Hyde 2016). However, global demand for dairy has been relatively weak since 2014. As a result, the European Union has modified several policies that support its domestic dairy industry, including an increase in targeted financial aid and the extension of storage support (Whitnall 2016).

Voluntary coupled supportThe VCS payment scheme provides financial assistance to producers of specific agricultural commodities (European Commission 2013c). In the case of livestock production, payments are linked to animal numbers. For EU beef farms, payments are based on the number of calves born. For EU dairy farms, payments are based on the number of milking cows (Menadue & Hart 2014).

The annual VCS budget for the CAP period 2015 to 2020 is around €4.2 billion (Figure 3), 10 per cent of the direct payments budget (European Commission 2013c). Together, EU beef farms account for the largest share of the annual VCS budget at 41 per cent or €1.7 billion a year. Farms that produce milk and milk products are the second-largest recipient at 20 per cent or €0.8 billion a year.

The amount of support available to EU farmers varies between member states and agricultural sectors (Menadue & Hart 2014). For example, the annual VCS budget allocated to France is €1.1 billion, around 60 per cent of which is for beef farms and 12 per cent for dairy farms. In contrast, only 5 per cent of Romania’s €0.2 billion budget is allocated to beef farms, with the majority (35 per cent) allocated to dairy farms.

FIGURE 3 Annual voluntary coupled support, by member state and sector, European Union, 2015 to 2020

Beef

€ billion

Milk and milk productsAll other sectors

Source: European Commission 2015d, 2016b

0.2 0.4 0.6 0.8 1.00 1.20FranceSpain

PolandItaly

RomaniaHungary

GreeceCzech Republic

BulgariaPortugalFinlandSwedenBelgium

Lithuania

All othermember states



EU beef exports and trade policiesBeef exports from the European Union comprise only a small share of the EU beef market. In the five years to 2015, EU beef exports accounted for only 3 per cent of total beef production. Despite the small share, the large size of the beef market supports the European Union’s ranking as the eighth-largest beef exporter in the world.

Between 2000 and 2015, the European Union accounted for around 5 per cent of world beef exports. EU beef exports averaged around 190 000 tonnes (shipped weight) in the five years to 2015 (Figure 4). The Russian Federation was its largest market, accounting for around a quarter of total EU beef exports. However, export volumes to the Russian Federation declined sharply during this period, with less than 30 tonnes shipped in 2015 (European Commission 2016f).

The decline was partly the result of the August 2014 Russian ban on EU agricultural products, including beef (European Commission 2015c). However, weak economic conditions in the Russian Federation and devaluation of the rouble during this period strongly reduced Russian demand for imported beef (USDA–FAS 2014).

No certainty about impact of Brexit on UK and EU beef industriesOn 23 June 2016 the people of the United Kingdom voted to leave the European Union (Brexit). The United Kingdom has indicated that the formal process of exiting the European Union will start before the end of March 2017 (BBC 2016). This process is expected to take at least two years according to the procedures set out in Article 50 of the Treaty of Lisbon.

The United Kingdom is the fourth-largest beef producer in the European Union. In the 15 years to 2015, it accounted for about 10 per cent of total annual EU beef production (0.8 million tonnes) and 15 per cent of annual EU consumption (1.2 million tonnes). Per person beef consumption averaged 18.8 kilograms a year, the ninth-highest in the European Union over this period.

The United Kingdom is a net importer of beef. UK beef imports in the five years to 2015 averaged 240 000 tonnes a year. Of this total, around 90 per cent was sourced from other EU member states. Ireland alone accounted for around 70 per cent of all UK beef imports during this period. Australia is the largest non-EU supplier of beef to the United Kingdom, averaging 7 000 tonnes a year, or 3 per cent of annual UK beef imports. Over the same period, South American suppliers together accounted for 4 per cent of UK beef imports, averaging 9 500 tonnes a year.

In the five years to 2015, annual UK beef exports averaged around 110 000 tonnes (shipped weight). Of this total, 92 per cent was shipped to other EU member states. China is the largest export market outside the European Union, averaging just 2 000 tonnes a year between 2010 and 2015. This was equivalent to about 2 per cent of the United Kingdom’s annual beef exports.

The effect of Brexit on the UK and EU beef industries will remain uncertain until the details of an agreement between the United Kingdom and the European Union are announced. The United Kingdom has undertaken to continue providing CAP support to UK farmers until 2020 (HM Treasury 2016).



FIGURE 4 Volume of beef exports, European Union, 2010 to 2015

Russian Federation

kt (sw)

All other markets


50

100

150

200

250

300

201520142013201220112010

Weaker import demand from the Russian Federation has largely been offset by increased volumes of EU beef shipped to other markets. The largest increase between 2010 and 2015 was to Bosnia and Herzegovina (by 23 000 tonnes), followed by Norway (17 500 tonnes) and the greater China region (11 000 tonnes) (European Commission 2016f).

The number of EU beef export markets also increased from an average of 115 markets in the decade to 2010 to 143 markets in 2015. Most of the new markets are in Eastern Europe and Asia (European Commission 2016f), but the volumes shipped to these destinations have generally been small (European Commission 2015c).

The increase in export markets reflects improved market access for EU beef. This follows the lifting of animal health restrictions imposed between 1990 and 2010 after outbreaks of bovine spongiform encephalopathy (multiple cases between the mid 1980s and 2000s) and foot-and-mouth disease (2001 and 2007). Countries that have recently removed trade restrictions on EU beef include Japan (February 2016), Ukraine (January 2016), Saudi Arabia (October 2015), the United States (December 2014) and Canada (September 2014).

Under the CAP, the European Union can use export subsidies during exceptional circumstances to support exporters of agricultural products, including beef (European Commission 2013d). However, in recent years the beef industry has made minimal use of export subsidies because successive CAP reforms have narrowed the price gap between world and EU beef prices. EU export subsidies are expected to cease by the end of 2018 as part of the World Trade Organization’s Nairobi Package, signed in 2015 (European Commission 2015b; WTO 2015).

EU beef importsBeef imports comprised only 3 per cent of EU beef consumption in the five years to 2015. However, given the large size of its market, the European Union accounted for around 7 per cent of world beef imports over this period, making it the fourth-largest beef importer in the world.



In the five years to 2015, EU beef imports averaged just under 200 000 tonnes a year (shipped weight) (Figure 5). The Mercosur region, which includes Argentina, Brazil, Paraguay, Uruguay and Venezuela, supplied more than two-thirds of all EU beef imports during this period. Australia and the United States each accounted for about 8 per cent of imports.

FIGURE 5 Beef imports by source, European Union, 2010 to 2015

Rest of world

kt (sw)

United StatesAustralia Argentina Uruguay


Brazil

50

100

150

200

250

201520142013201220112010

Thirteen countries are currently eligible to export red meat (including beef) to the European Union (European Commission 1996, 2002, 2008, 2010). These countries are required to satisfy three criteria:1. The animal health status of the country must meet EU requirements.2. An EU-approved residue plan must be in place.3. Meat-processing plants must be EU listed.

Beef imported into the European Union from eligible countries can only be sourced from cattle that have lifetime traceability and have not been treated with hormonal growth promotants (HGPs). Non-HGP cattle must also be separated from HGP cattle throughout the supply chain (including on-farm and at feedlots, saleyards and abattoirs).

Apart from the eligibility requirements for imported beef, the European Union also regulates the volume of imports through a system of tariff-rate quotas (TRQs). Almost half of all beef imported into the European Union enters under one of two TRQs for high-quality beef—the Hilton or the grain-fed quotas. The majority of the remaining imported beef enters under one of three TRQs for frozen beef.

The European Union imports a relatively large volume of beef outside of the high-quality beef TRQs. Most of this beef is from Brazil and incurs the most-favoured nation (MFN) tariff rate of 12.8 per cent plus a specific tariff that ranges between €1 414 a tonne and €3 034 a tonne depending on the cut. Frozen beef imports that exceed the frozen quotas attract tariffs of 12.8 per cent plus a specific tariff that ranges from €1 414 a tonne to €3 041 a tonne (WTO 2016).



EU tariff-rate quotas for beef

Hilton quotaThe Hilton tariff-rate quota allows high-quality beef to be imported into the European Union, subject to a 20 per cent import tariff (European Commission 2013a). The quota operates annually from July to June and quota allocations are administered by exporting country regulators. The Hilton beef quota was established during the 1979 Tokyo round of multilateral trade negotiations and has increased over time, totalling 66 750 tonnes (shipped weight) in 2015–16.

Canada and the United States were the first countries to gain access to the Hilton quota and now share an 11 500 tonne allocation. Since 1979 an additional seven countries have received allocations. South American nations have the largest allocation at around 70 per cent of the total. Argentina has access to the largest share of all nations at 29 500 tonnes or 44 per cent, compared with Australia at 7 150 tonnes (European Commission 1997, 2013a).

Country-specific regulations govern the type of beef that can be imported under the Hilton quota (European Commission 2013a). These regulations specify whether the product from each eligible country can be bone-in or boneless, grain fed or grass fed, and whether it can be fresh, chilled or frozen. For example, beef imported from Australia under the Hilton quota can be grain-fed or grass-fed beef cuts, and fresh, chilled or frozen, but it cannot consist of carcases, livers or tongues. In contrast, imports from Argentina can only be grass-fed, boneless product and must be fresh or chilled (European Commission 2013a).

Between 2009–10 and 2015–16, EU beef imports under the Hilton quota steadily increased, rising from 36 000 tonnes to 47 200 tonnes (Figure 6). The increased use of the quota mainly reflects larger import volumes from Brazil, which rose from 800 tonnes to 9 300 tonnes over the same period. Despite the increase, utilisation of the quota remains low, with an average fill rate of about 65 per cent (Table 1). For example, between 2011–12 and 2015–16 the United States and Canada together used an average of only 7 per cent of their Hilton quota allocation, preferring instead to use the duty-free grain-fed quota.

FIGURE 6 Imports under the Hilton quota, by source and quota limit, European Union, 2009–10 to 2015–16

Other a

kt (sw)

Quota limit

Uruguay

a Other countries are Canada, New Zealand, Paraguay and the United States.Source: European Commission 2016d

10

20

30

40

50

60

70

80

AustraliaBrazilArgentina

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10



TABLE 1 Hilton quota allocations and utilisation, 2009–10 to 2015–16

Country Quota Unit2009

–102010

–112011–12

2012–13

2013–14

2014–15

2015–16

Argentina a Quota allocation ’000 tonnes (sw) 28.0 28.0 29.4 30.0 30.0 30.0 29.5

Volume shipped ’000 tonnes (sw) 18.1 25.8 18.7 24.3 23.7 22.9 22.4

Utilisation % 64.8 92.3 63.6 81.1 78.9 76.2 75.8

Australia b Quota allocation ’000 tonnes (sw) 7.2 7.2 7.2 7.2 7.2 7.2 7.2


Utilisation % 100.0 91.0 98.9 90.1 99.8 95.3 94.4

Uruguay Quota allocation ’000 tonnes (sw) 10.0 10.0 10.0 10.0 10.0 10.0 10.0


Utilisation % 63.0 62.9 63.0 62.9 62.8 62.8 62.5

Brazil Quota allocation ’000 tonnes (sw) 6.3 6.3 6.3 6.3 6.3 6.3 6.3


Utilisation % 12.6 7.2 40.7 47.3 64.7 126.8 147.5

New Zealand Quota allocation ’000 tonnes (sw) 1.3 1.3 1.3 1.3 1.3 1.3 1.3


Utilisation % 100.0 100.0 100.0 98.6 100.0 100.0 100.0

Canada/ United States

Quota allocation’000 tonnes (sw) 11.5 11.5 11.5 11.5 11.5 11.5 11.5


Utilisation % 11.6 4.5 21.8 3.8 3.8 3.1 2.5

Paraguay Quota allocation ’000 tonnes (sw) 1.0 1.0 1.0 1.0 1.0 1.0 1.0


Utilisation % 98.6 100.0 36.9 0.0 0.0 1.2 91.6

TOTAL Quota allocation ’000 tonnes (sw) 65.3 65.3 66.6 67.3 67.3 67.3 66.8


Utilisation % 55.2 64.2 58.2 62.1 63.8 67.8 70.6

Note: a Argentina also has access to 200 tonnes for ‘boneless buffalo meat, fresh, chilled or frozen’. b Australia also has access to a quota of 2 250 tonnes for frozen boneless buffalo meat. Totals may not sum to 100 due to rounding. Source: European Commission 2016d



Grain-fed quotaThe grain-fed tariff-rate quota allows 48 200 tonnes of grain-fed beef to enter the European Union duty-free. The TRQ operates annually from July to June on a first-come, first-served basis, with allocations distributed by the European Union to EU importers.

The grain-fed quota is available to Argentina, Australia, Canada, New Zealand, the United States and Uruguay. Beef imported from these countries under the quota must meet the following age, dietary and quality requirements (European Commission 2012):• Beef must be obtained from a steer or maiden heifer under 30 months of age

at slaughter.• Cattle must be grain fed for at least 100 days prior to slaughter.• Feed rations must, on a dry-matter basis, contain at least 62 per cent

of concentrates or grain and have a minimum energy content of 12.26 megajoules a kilogram.

• Feed rations must be consumed at an average daily rate of at least 1.4 per cent of live body weight.

• Beef imports must meet specifications for fat, colour, depth and marbling.

The grain-fed quota resulted from a 2009 memorandum of understanding (MOU) between the European Union and the United States, following an extended WTO dispute over the use of hormones for treating cattle (European Commission 2013b; Johnson 2015). Under Phase 1 of the MOU (August 2009 to August 2012), the European Union opened a 20 000 tonne tariff quota for all eligible countries. In return, the United States reduced the level of sanctions applied to a range of EU products (European Commission 2013b).

Under Phase 2 (August 2012 to August 2013), the European Union increased the size of the quota to 48 200 tonnes. In response, the United States suspended the EU trade sanctions it had imposed during the hormones dispute (European Commission 2013b). In October 2013 Phase 2 was extended by two years, with a new expiry date of August 2015. This kept the grain-fed quota open to all eligible exporters in exchange for continued suspension of US import duties on EU products.

The MOU parties have not yet agreed on the start date of Phase 3. The final phase should begin with an official notification to the WTO Dispute Settlement Body of the withdrawal of the case. As part of this phase, the United States is expected to remove its trade sanctions and the European Union to maintain the grain-fed quota.

Use of the grain-fed quota averaged around 85 per cent between 2009–10 and 2015–16 (Figure 7). However, import volumes have increased significantly since the expansion of the total quota allocation in August 2012. Utilisation of the grain-fed quota was lowest in 2012–13 and 2013–14 because supply chain issues in exporting countries restricted their capacity to meet the larger quota allocation. The quota fill rate in 2014–15 and 2015–16 was around 99 per cent, with around 48 000 tonnes shipped in both years.



FIGURE 7 Imports under the grain-fed tariff-rate quota and total quota limit, European Union, 2009–10 to 2015–16

Quota use

kt (sw)

Quota limit

Sources: European Commission 2016d; USDA–FAS 2014

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

10

20

30

40

50

60

The European Union and the United States have been negotiating a transatlantic trade and investment partnership (TTIP) since July 2013. It remains unclear how these negotiations will progress and the effect, if any, on the future of the grain-fed quota. If the TTIP agreement liberalises US access to the EU beef market, the grain-fed quota could become redundant for both parties. This could result in the removal of the grain-fed quota for all other exporting countries, including Australia, because it is an autonomous quota and remains open only because of the 2009 MOU.

Frozen beef tariff-rate quotasThe European Union operates three TRQs for frozen beef. The two largest are a 63 703 tonne quota for processing beef and a general frozen beef quota of 53 000 tonnes. The other TRQ is a 1 500 tonne quota for thin-skirt beef cuts, of which 700 tonnes is allocated exclusively to Argentina.

The three frozen beef import quotas are open to all eligible exporting countries and are allocated on a first-come, first-served basis to EU importers. The in-quota tariffs for the three quotas range from 4 per cent to 20 per cent depending on the product (European Commission 2014).

Of the three frozen beef TRQs, only the 53 000 tonne general frozen beef quota has been regularly filled since 2009–10 (Figure 8). Imports under the TRQ for frozen beef intended for processing fell from around 85 per cent of quota utilisation in 2009–10 to less than 5 per cent in 2015–16. The frozen thin-skirt quota was not used to import beef into the European Union in 2015–16. Utilisation of this quota has been falling steadily since 2009–10, when it was about 50 per cent (800 tonnes).



FIGURE 8 Imports under the frozen beef tariff-rate quota and combined quota limit, European Union, 2009–10 to 2015–16

Frozen thin skirt

kt (sw)

Combined quota limit

Frozen beef intendedfor processing

Source: European Commission 2016d

General frozen beef

2015–16

2014–15

2013–14

2012–13

2011–12

2010–11

2009–10

20

40

60

80

100

120

140

Mercosur countriesTogether, the Mercosur countries are the largest supplier of EU beef imports, accounting for more than two-thirds of the total between 2010 and 2015. Over this period, EU beef imports from these countries averaged around 135 000 tonnes a year. With the exception of Uruguay, the Mercosur countries primarily export beef to Germany, Italy and the Netherlands. Most beef exports from Uruguay are shipped to the United Kingdom and Spain (European Commission 2016f).

Between 2010 and 2015 EU beef imports from Uruguay were relatively stable at around 40 000 tonnes, although the share of chilled beef rose during this period (Figure 9). This reflects Uruguay’s increased use of the grain-fed quota. During the same period, Uruguay’s utilisation of the Hilton quota averaged around 100 per cent (European Commission 2016d).

EU beef imports from Argentina declined by around a third between 2010 and 2015 (Figure 9) as a result of a contraction in Argentine beef production. Both chilled and frozen beef exports fell over this period. This was despite Argentina successfully negotiating an increase in its Hilton quota allocation of 500 tonnes in 2010 and gaining access to the grain-fed quota in 2014.

EU beef imports from Brazil rose by around 50 per cent between 2010 and 2015 as a result of increased accreditation of Brazilian suppliers to EU standards. Brazil does not have access to the grain-fed quota despite exporting around 25 000 tonnes of chilled beef to the European Union in 2015. Because Brazil has only a 10 000 tonne allocation under the Hilton quota, most of the chilled beef shipped to the European Union landed outside the TRQ system and therefore incurred the MFN tariff rate.



FIGURE 9 Beef imports from major Mercosur exporters, European Union, 2010 to 2015

Frozen

kt (sw)

Fresh or chilled

Source: European Commission 2016d

10

20

30

40

50

60

70

8020

15

2013

2011

2014

2012

2010

Argentina Brazil Paraguay Uruguay

2015

2013

2011

2014

2012

2010

2015

2013

2011

2014

2012

2010

2015

2013

2011

2014

2012

2010

EU–Mercosur free trade agreementThe European Union is negotiating a trade agreement with the Mercosur region. Negotiations were officially relaunched at the EU–Mercosur summit in Madrid, in May 2010. Sixteen rounds of negotiations have since taken place, most recently in October 2016 (European Commission 2016g). Access to agricultural markets, particularly for beef, remains a contentious issue for all parties.

United StatesEU beef imports from the United States averaged 17 000 tonnes a year in the five years to 2015. US utilisation of the Hilton quota (shared with Canada) averaged around 7 per cent over this period, with almost all US beef entering the European Union under the grain-fed quota. This reflects US exporters’ preference for the tariff-free access provided under the grain-fed quota over the 20 per cent in-quota tariff of the Hilton quota.

Transatlantic trade and investment partnershipAs of July 2016, 15 rounds of TTIP negotiations had taken place between the United States and the European Union (European Commission 2016h). The future of the partnership will depend on the US position following the November 2016 presidential election. Agricultural market access is likely to remain a contentious issue, particularly with respect to beef.



CanadaCanada is the sixth-largest exporter of beef in the world and has access to the high-value EU market through both high-quality beef TRQs. However, the volume of beef shipped to the European Union is small, reflecting Canadian exporters’ preference for the tariff-free access provided by the much closer US market. Between 2010 and 2015 Canadian beef exports to the European Union averaged around 600 tonnes a year, accounting for only 0.3 per cent of total Canadian beef exports. Similarly, Canadian beef accounted for less than 0.5 per cent of total EU beef imports.

Comprehensive Economic Trade AgreementCanada and the European Union signed the Comprehensive Economic Trade Agreement (CETA) on 30 October 2016. Much of the agreement (including goods market access provisions) can provisionally enter into force following consent by the European Parliament. Canada, the European Parliament and all EU member states have to ratify the agreement for CETA to come fully into effect beyond provisional application—subject to consent.

Under CETA, Canada will be able to export beef to the European Union under two country-specific TRQs. The first TRQ under CETA provides tariff-free access for 5 140 tonnes of fresh or chilled beef and veal in the first year of the agreement. The quota will increase by 5 140 tonnes annually until it reaches 30 840 tonnes in the sixth year of the agreement. The second CETA TRQ provides tariff-free access for 2 500 tonnes of frozen beef in the first year of the agreement. This quota will increase annually by 2 500 tonnes until it reaches 15 000 tonnes in the sixth year of the agreement.

Canada will retain its access to the European Union’s high-quality beef TRQs. Out-of-quota Canadian beef exports will be charged MFN tariff rates, ranging from 12.8 per cent plus €1 414 a tonne to 12.8 per cent plus €3 041 a tonne depending on the product’s tariff line.

European Union sanitary regulations will remain unchanged under CETA. Canadian exporters will have to ensure their cattle are HGP free, traceable throughout the supply chain and processed at EU-accredited facilities (European Commission 2016c). The European Union and Canada are working to resolve differences in sanitary practices before ratifying CETA. These practices include Canadian treatment of carcases with an antibacterial wash (CCA 2016; US MEF 2016).

Other trading partnersThe European Union has signed trade and partnership agreements with more than 50 partners, including the Southern African Development Community (SADC), and is in the process of finalising seven more (European Commission 2016a). The volume of beef imported by the European Union from countries under these concluded and prospective agreements is small. SADC member states Namibia and Botswana are the largest of these suppliers. Annual beef imports from Namibia averaged 8 000 tonnes between 2010 and 2015, equivalent to about 4 per cent of total EU beef imports. Imports from Botswana averaged 4 000 tonnes (1.8 per cent).



Australia–EU beef tradeIn 2015 Australia exported around 24 000 tonnes of beef to the European Union, valued at $295 million. Since 2000 around half of Australia’s EU beef exports have been to the United Kingdom. Of the remainder, Italy (22 per cent) and the Netherlands (22 per cent) are the most significant destinations. Most Australian beef shipped to the United Kingdom is grass fed. The majority of beef exported to the other EU member states is grain fed (ABS 2016; Department of Agriculture and Water Resources 2016).

The EU market is a valuable export destination for Australian beef, as reflected by average export unit values that are much higher than for other beef export markets. Between 2000 and 2015 beef export unit values to the European Union averaged $11.37 a kilogram (in 2015 dollars), 90 per cent higher than the average $5.98 a kilogram for all other export markets (Figure 10).

FIGURE 10 Real average export unit values, Australia, 2000 to 2015

2015$/kg

European Union All other markets

3

6

9

12

15

201520122009200620032000

Source: ABS 2016

Despite being the highest value market for Australian beef exports, the EU share of Australia’s beef exports remains small. Between 2010 and 2015 the European Union accounted for just 1.7 per cent of Australia’s average annual beef exports of 1.1 million tonnes (shipped weight). The out-of-quota tariff rate imposed on Australian exporters who exceed the quota makes the European Union a less attractive market than other export destinations.

Since being granted access to the grain-fed quota in 2010, Australian beef exports to the European Union have more than doubled (Figure 11). In 2015–16 Australia exported around 17 000 tonnes of chilled, grain-fed beef to the European Union, accounting for around a third of all EU imports under the grain-fed quota.

Australian exports of chilled, grass-fed beef varied little from 2000 to 2015, averaging around 7 000 tonnes a year. Most of these shipments entered the European Union under the Hilton quota, which provides Australia with an annual allocation of 7 150 tonnes. Australian utilisation of the Hilton quota has therefore been relatively high, averaging more than 90 per cent since 2000.



EU accreditation within the Australian beef industry is relatively low, reflecting the small share of Australian exports destined for the European Union. In 2015 around 20 per cent of Australian abattoirs had EU accreditation. For feedlots this share falls to around 10 per cent and for beef cattle farms 5 per cent.

FIGURE 11 Beef exports to the European Union and EU share of beef exports, Australia, 2000 to 2015

Frozen beef

kt (sw)

EU share of Australian beefexports (right axis)

Chilled grain fedChilled grass fed

%

Source: Department of Agriculture and Water Resources 2016

2

4

6

8

10

201520122009200620032000

0.5

1.0

1.5

2.0

2.5

ConclusionThe responsiveness of the Australian industry to opportunities that improved market access provides has been demonstrated through Australia’s high utilisation of the Hilton quota and, since 2010, the grain-fed quota. However, the future of the grain-fed quota is uncertain. A free trade agreement between Australia and the European Union that secures access equivalent to or better than that provided under the existing high-quality EU beef quotas would provide some certainty to the Australian industry.

Increased certainty has the potential to drive stronger export growth to the EU market. However, the EU accreditation process for beef exporters is unlikely to change under an agreement with Australia. An FTA that improves access to the EU market would create an incentive for the Australian beef industry to increase accreditation to EU standards and take advantage of the benefits of selling in such a high-value market.

The European Union has made significant progress in liberalising trade in beef in recent years. However, imports remain a small component of total EU beef consumption. Even if Australia were to secure improved access to the EU beef market, EU demand for imported beef is expected to remain relatively weak over the medium term. This is largely because growth in EU beef consumption is expected to remain weak, limited by relatively high prices and low income growth. In addition, the end of the EU milk quota in early 2015 is expected to result in an expansion of the EU dairy herd and increase the supply of domestically produced beef. Australian exporters will need to be competitive relative to other lower-cost, beef-exporting nations to maintain their current market share in the EU market.



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Oils ain’t oilsImplications of world biofuel policies for agricultural commodities

David Mobsby, Benjamin Agbenyegah and Lisa McKelvie

Biofuels are a liquid fuel alternative to fossil fuels and are produced from biological materials. The global biofuels industry largely depends on government policies for its existence, because the cost of producing biofuels far exceeds that of producing traditional fossil fuels. This is even more pronounced because crude oil prices are currently low. Government biofuel policies influence supply and demand for biofuels and are driven by several factors, including energy security, environmental quality and regional agricultural development.

Ethanol and biodiesel are the two main types of biofuel. These are derived from feedstocks such as corn, sugar cane, sugar beet and vegetable oil. Globally, government policies to support biofuel production have included blending and consumption mandates, tax incentives, subsidies and trade restrictions. Blending mandates specify a minimum percentage of biofuel in transportation fuels. These have been implemented in 64 countries, including in the major markets of the United States, Brazil and the European Union (Lane 2016). The OECD–FAO (2016) estimates that 148 million tonnes of corn, 370 million tonnes of sugar cane, 13 million tonnes of sugar beet and 24 million tonnes of vegetable oil were used globally to produce biofuel in 2014.

The effect of government biofuel policies on the demand for biofuel feedstocks can affect world prices of grains, oilseeds and sugar. For example, the US biofuel policy is estimated to have resulted in US corn prices averaging between 20 per cent and 40 per cent higher than they otherwise would have from 2007 to 2009 (National Research Council 2011). This article examines recent policy developments in the major biofuel-producing economies of the United States, Brazil and the European Union. It also discusses the implications of these developments for selected agricultural commodities over the short to medium term.

Oils ain’t oils


World production of biofuelsWorld biofuel production grew rapidly during the 2000s. In the 10 years to 2010, biofuel production increased by around 20 per cent a year to reach 60 million tonnes of oil equivalent (Figure 1). This occurred during a period of rapidly rising world prices for crude oil and agricultural commodities (especially grains).

Since 2010 world growth in biofuel production has slowed markedly, increasing by around 5 per cent a year to reach 75 million tonnes of oil equivalent in 2015. This reflects slower production growth in the United States and Brazil. In contrast, world biodiesel production increased by an average of 12 per cent a year in the five years to 2015 to reach 31 billion litres. World biofuel production is expected to continue to grow in the medium term, but the rate of growth is expected to be slower than in the decade to 2015 (OECD–FAO 2016).

FIGURE 1 World biofuel production, by economy, 1990 to 2015

Rest of world

Mtoe

European UnionBrazil

Mtoe million tonnes of oil equivalent. Source: BP 2016

United States

10

20

30

40

50

60

70

80

201520122009200620032000199719941991

The United States, Brazil and the European Union account for most global biofuel production. For the five years to 2015 these economies accounted for 83 per cent of the world’s biofuel production on an oil-equivalent basis. The United States and Brazil dominate ethanol production, and the European Union dominates biodiesel production. Biofuel production in Indonesia, China and India is growing but remains relatively low in comparison.

US ethanol production, consumption and energy policiesThe United States is the world’s largest producer of biofuel. In 2015 it produced 31 million tonnes (in oil equivalent) of biofuel (ethanol and biodiesel), which accounted for 41 per cent of world production (BP 2016).

US Government energy policies have driven industry development. The dominant policy measure is the mandated blending of biofuels into transport fuels, but tax credits and border measures have also been applied. Mandated consumption of renewable fuels was the major driver of increased corn consumption (used to produce ethanol) during the mid to late 2000s.

Oils ain’t oils


Biofuel use in the United States is mandated through the renewable fuel standard (RFS2), enacted by the US Energy Independence and Security Act of 2007 (EISA 2007) (US EPA 2016b). RFS2 sets out annual increases in the volume of renewable fuel used to replace petroleum-based fuels, starting with 34 billion litres in 2008 and increasing to 136 billion litres in 2022 (Figure 2). The two major objectives of RFS2 are to reduce greenhouse gas emissions and increase energy security (US EPA 2016b).

FIGURE 2 US renewable fuel standard, 2009 to 2022

Advanced biofuel

billion L

Conventional biofuel

Note: Renewable fuel standard set out in US Energy Independence and Security Act of 2007.Source: US EPA 2016b

30

60

90

120

150

2022202020182016201420122010

RFS2 specifies two broad categories of renewable fuel—conventional and advanced. Biofuels are allocated to each category on the basis of feedstock used and associated life cycle greenhouse gas emission reduction. Corn starch ethanol (corn ethanol) is classified as a conventional biofuel. Advanced biofuels include two more nested categories: cellulosic biofuels and biomass-based biodiesel. Cellulosic biofuels are derived from the fibrous parts of plants rather than the fruits or seeds. Biomass-based biofuels are made from recycled vegetable oil or animal fats.

EISA 2007 schedules consumption volumes out to 2022, but each year the US Environmental Protection Agency (US EPA) determines the required volume of each renewable fuel category. It bases these volumes on market conditions and US Energy Information Administration (US EIA) energy projections. The US EPA has authority to make adjustments to RFS2-mandated biofuel volumes if these cannot be achieved (US EPA 2016b).

In 2015 and 2016 the US EPA exercised this authority to reduce statutory renewable fuel consumption requirements. These reductions reflected the limited supply of renewable fuels (particularly cellulosic biofuel) and the expected reduced demand for gasoline (US EPA 2016c). It made a retrospective adjustment to the 2014 consumption requirement, and this was the first time it had reduced the total volume of renewable fuel. Previously only portions of the advanced biofuels requirement were adjusted and most of these were applied to the cellulosic portion of RFS2.

The US EPA’s ruling for 2017 is for total renewable fuels to be 73 billion litres. This is 6 per cent higher than for 2016 but still 18 billion litres lower than the EISA 2007 volume set for 2017 (US EPA 2016a). The 2017 total volume can comprise 57 billion litres of conventional biofuels (for example, corn ethanol) and 16 billion litres of advanced biofuels (including 1.2 billion litres of cellulosic ethanol and 7.6 billion litres of biodiesel).

Oils ain’t oils


Adoption of cellulosic biofuels has been a major challenge to achieving the volumes set out in RFS2. Cellulosic biofuels have not become as widespread as anticipated and consumption has been well below the volume specified in EISA 2007. US production of these biofuels has been hampered by costs and logistics (Dinan 2015). During the decade to 2016 the United States imported significant volumes of sugarcane-derived ethanol from Brazil to count towards the EISA 2007 advanced biofuel component.

The volume of renewable fuel consumed in the United States is also constrained by the ‘blend wall’, the maximum quantity of ethanol fuel that can be sold each year for blending with petroleum-based fuel. The share of ethanol blended into gasoline increased rapidly during the mid 2000s, reflecting step-ups in the total volume blended into motor gasoline and a decline in gasoline consumption from 2008 onwards (US EIA 2016a). In 2015 the ethanol share of gasoline consumption was 9.9 per cent (Figure 3).

FIGURE 3 Road transport fuel consumption and share of ethanol, United States, 2004 to 2016

Petroleum

billion L %

Ethanol

p US EIA projection.Source: US EIA 2016b

Share of ethanol(right axis)

2

4

6

8

10

12

100

200

300

400

500

600

2016p201420122010200820062004

The blend wall was originally based on the capacity of motor vehicles to use a maximum of 10 per cent ethanol-blended fuel without risk of damage to engines and catalytic converters. In 2011 the US EPA approved the use of a 15 per cent ethanol blend (E15) in vehicles produced after 2001 in response to improvements in engine technology. These improvements meant that in-car computers could make adjustments for oxygen in the fuel, reducing the possibility of engine damage (RFA 2013). At the beginning of 2016 fewer than 200 US gasoline stations offered E15. However, this is expected to increase with the allocation of US$210 million to new ethanol infrastructure and additional gasoline stations in 2016 (US Department of Energy 2016).

Flexible-fuel vehicles designed to run on any combination of fuels, typically gasoline and ethanol, can use fuel blends of up to 85 per cent ethanol (E85). The US EPA estimates that in 2016 around 760 million litres of E85 will be sold, which would be equivalent to 0.4 per cent of projected total fuel consumption (US EPA 2016c). However, low numbers of gasoline stations able to provide E85 and the high price of E85 relative to E10 may be constraining the US uptake of E85 (Dinan 2015).

Oils ain’t oils


US ethanol feedstockNearly all ethanol produced in the United States is derived from corn. Between 2003–04 and 2014–15 the volume of corn used in US ethanol production rose more than fourfold from 30 million tonnes to 132 million tonnes. This largely reflects annual step-ups in mandated biofuel consumption. Over the same period, US area planted to corn expanded by 12 per cent to 36 million hectares (USDA–ERS 2016).

Brazilian biofuel production, consumption and energy policiesBrazil is the world’s second-largest producer of ethanol and the world’s third-largest producer of biodiesel. In 2015 Brazil produced 17.6 million tonnes (in oil equivalent)of biofuel (ethanol and biodiesel), accounting for around 24 per cent of total global production (BP 2016).

In 2015–16 ethanol contributed to almost 90 per cent of biofuel production in Brazil. Ethanol production has doubled since the early 2000s, exceeding 30 billion litres in 2015–16 (Figure 4). Over the same period, consumption increased at a faster rate than production. In 2012–13 consumption of ethanol in Brazil exceeded production for the first time and is expected to do so again in 2016–17. The Brazilian Government strongly supports ethanol production and use, and encourages this through policies and the facilitation of easy access to vehicles designed to use renewable fuels.

FIGURE 4 Ethanol indicators, Brazil, 2003–04 to 2016–17 a

Production

billion L

ConsumptionExports

a Years are from April to March. f ABARES forecast.Source: UNICA 2016

Imports

5

10

15

20

25

30

35

2016–17f

201415

2012–13

2010–11

2008–09

2006–07

2004–05

Oils ain’t oils


In the transport sector in Brazil, renewable energy accounted for around 35 per cent of total fuel consumption in 2015. This was 20 per cent higher than in 2003 (EPE 2011, 2016a). This increase reflects the significant rise in availability of flexible-fuel vehicles. Brazil has the largest fleet of flexible-fuel vehicles in the world. In 2015 it had around 13 million conventional-fuel vehicles and 25.5 million flexible-fuel vehicles. In that year, around 94 per cent of all vehicles produced were flexible-fuel vehicles (Figure 5) and around 88 per cent of registered vehicles used ethanol fuel.

FIGURE 5 New vehicles by fuel type, Brazil, 2003 to 2015

Diesel

millionvehicles

GasolineFlexible

Sources: ANFAVEA 2014, 2015, 2016

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2015201320112009200720052003

Brazilian Government biofuel policies encourage ethanol production and aim to provide energy security, reduce greenhouse gas emissions and absorb excess sugarcane production. Many of its policies focus on improving the price competitiveness of ethanol to stimulate consumption. Policies include guaranteed purchases by the state-owned oil company (Petrobras), low-interest loans, producer subsidies, market regulation and tax incentives. However, the government’s key policy to support the biofuel industry is the mandated blending ratio for ethanol content in fuel.

Each year the government mandates a blend rate in the range of 18 per cent to 27.5 per cent (USDA–FAS 2016b). In March 2013 it increased the blending ratio of ethanol to gasoline from 20 per cent to 25 per cent following two years of declining ethanol consumption. In March 2015 the blending ratio was increased again to 27 per cent to further encourage ethanol consumption in the face of falling crude oil prices (Figure 6). In 2016 the blending ratio remained at 27 per cent.

Oils ain’t oils


FIGURE 6 Brazilian ethanol and gasoline prices and world crude oil prices, January 2012 to September 2016

US$/L US$/barrel

Brazilian gasoline priceBrazilian ethanol priceWorld crude oil price(right axis)

Sources: BP 2016; CEPEA 2016; UNICA 2016

0.3

0.6

0.9

1.2

1.5

1.8

20

40

60

80

100

120

Sep2016

Mar2016

Sep2015

Mar2015

Sep2014

Mar2014

Sep2013

Mar2013

Sep2012

Mar2012

Changes to the tax regime in Brazil have increased the competiveness of ethanol relative to conventional gasoline and largely mitigated the adverse effects of lower oil prices on ethanol consumption. In February 2015 the Brazilian Government increased federal taxes on conventional gasoline by R$0.22 a litre and on diesel by R$0.15 a litre. Some states in Brazil also reduced the tax on ethanol and increased the state value-added tax (Imposto sobre Circulação de Mercadorias e Serviços-CIMS), which is applied to the movement of goods and services to further encourage ethanol consumption (USDA–FAS 2016b). Petrobras increased the price of conventional gasoline by 6 per cent and diesel by 4 per cent (USDA–FAS 2016b).

In September 2016 Brazil released its 10-year plan for energy development to 2024. Ethanol consumption is expected to grow annually by at least 4.8 per cent (and biodiesel consumption by 7 per cent) (Enerdata 2015). This is expected to result in Brazilian production of ethanol increasing from 2015 levels by 54 per cent and consumption by 42 per cent (EPE 2016b). In September 2016 Brazil formally joined the Paris Agreement, pledging to reduce greenhouse gas emissions to 37 per cent below 2005 levels by 2025. These government policies and agreements should encourage continued growth in ethanol consumption and production, and consequently sugarcane production.

Brazilian feedstockBrazil produces its ethanol solely from its domestic sugarcane production, and it is the world’s largest producer of sugarcane-based ethanol. In 2014–15 mills increased the allocation of sugar cane to ethanol production to 57 per cent in response to government increases in the ethanol blending ratio and taxes on competing conventional fuels. In 2015–16 they increased the allocation further to 59 per cent.

Oils ain’t oils


The price of sugar for human consumption relative to the price for sugar used in ethanol also influences the share of sugar cane used for ethanol production in Brazil. The world sugar price continued to be relatively high during the first half of 2016–17. This increased the sugar-to-ethanol price ratio (Figure 7), and millers have diverted more sugar cane to the production of sugar at the expense of ethanol. In the first eight months of the 2016–17 season (April to March), millers in Brazil’s major production region, South–Central, reduced the allocation of sugar cane to ethanol production to 50.4 per cent. They are expected to make further reductions over the remainder of the year. For the 2016–17 production year as a whole, the allocation of sugar cane to ethanol production is forecast to average 53 per cent. This is expected to result in a decline in Brazil’s ethanol production and an increase in sugar production.

FIGURE 7 Sugar prices relative to ethanol prices, and sugarcane allocation, Brazil, 2007–08 to 2016–17 a

Cane allocated to sugar

Mt %

Cane allocated to ethanol

a Years are from April to March. f ABARES forecast.Sources: CEPEA 2016; UNICA 2016

Sugar–ethanol priceratio (right axis)

100

200

300

400

500

600

700

800

5

10

15

20

25

30

35

40

2016–17f

2014–15

2012–13

2010–11

2008–09

EU biofuel production, consumption and energy policiesThe European Union is the world’s largest biodiesel market, accounting for around 40 per cent of world production and 50 per cent of world consumption in 2015. France and Germany are the major producers (OECD–FAO 2016).

Biodiesel has been used in transport fuel in the European Union since the 1990s. However, consumption only began to increase rapidly in the mid 2000s following the adoption of the 2003 Directive on Biofuels for Transport.

In recent years, the key EU regulation on biofuels has been the 2009 Renewable Energy Directive (RED). The transport sector is the major consumer of biofuels in the European Union. The RED mandates that the sector must use a minimum 10 per cent renewable energy by 2020. This is a binding target. Biofuel production must also meet specified sustainability criteria, including reduced greenhouse gas emissions. For 2009 to 2016, the minimum greenhouse gas emission saving for biofuels compared with fossil fuels was set at 35 per cent. This will increase to 50 per cent in 2017. Stricter rules apply to biofuel production facilities established after 2016. These facilities are required to achieve greenhouse gas emission savings of 60 per cent from 2018 onwards.

Oils ain’t oils


Member states must achieve EU directives. Each state determines how to implement directive objectives into national law. As a result, biofuel mandates vary between member states (see USDA–FAS 2016a for a detailed list of member state renewable fuel mandates).

EU feedstockEU biodiesel is made from domestically produced and imported feedstocks. Rapeseed oil is the most used biodiesel feedstock in the European Union due to ample domestic supply. The use of rapeseed oil (including canola oil) in biodiesel production peaked at 6.7 million tonnes in 2010 and has remained at around 6 million tonnes a year since 2012 (Figure 8).

FIGURE 8 Use of feedstocks in biodiesel production, European Union, 2009 to 2015

Other

Mt

Animal fat Sun�ower oil

s USDA–FAS estimate.Source: USDA–FAS 2016c

Recycled oil Soybean oil Palm oil Rapeseed oil

2

4

6

8

10

12

2015s201420132012201120102009

Since 2012 growth in EU biodiesel production has largely come from feedstocks such as palm oil, animal fats and recycled vegetable oils. Palm oil used in EU biodiesel production increased from 0.55 million tonnes in 2009 to an estimated 1.7 million tonnes in 2015. This reflected the relatively cheaper price of palm oil compared with other vegetable oils (including rapeseed oil). Palm oil can also be used to produce hydrogenated vegetable oil biodiesel, which can be blended into diesel in any proportion using existing engine infrastructure (USDA–FAS 2016c). All palm oil consumed in the European Union is imported. The use of recycled vegetable oils increased from 330 000 tonnes in 2009 to an estimated 2.1 million tonnes in 2015, and the use of animal fats increased from 350 000 tonnes in 2009 to an estimated 1 million tonnes in 2015 (USDA–FAS 2016c). In several member states biodiesel produced from recycled vegetable oil and animal fats can count twice against blending mandates. This makes them an attractive feedstock for refiners, especially during periods of low crude oil prices.

Oils ain’t oils


Implications for Australian agricultural commoditiesCanolaIn 2015–16 canola was one of Australia’s most valuable agricultural exports to the European Union, valued at $978 million (Figure 9). The European Union has also been Australia’s major export destination for canola over the past decade, largely reflecting growth of the EU biodiesel market (AEGIC 2014).

The European Union is one of the world’s largest importers of rapeseed (including canola) and changes in import demand can significantly affect world prices. The rapid rise in demand for rapeseed oil for EU biodiesel production contributed to rapeseed imports rising from 168 000 tonnes in 2003–04 to peak at 3.75 million tonnes in 2011–12. This is despite EU rapeseed production increasing by 8 million tonnes over that period (USDA–FAS 2016d). Since 2011–12 industrial demand for rapeseed oil (including canola oil) has stagnated. This has meant that EU import demand for rapeseed is largely a function of fluctuations in domestic rapeseed production and availability of substitute products (including vegetable oils for food consumption and protein meal for livestock consumption).

FIGURE 9 Australian canola export value, by destination, 2001–02 to 2015–16

Other

2015–16$b

China European Union

Source: ABS 2016

0.5

1.0

1.5

2.0

2.5

2015–16

2013–14

2011–12

2009–10

2007–08

2005–06

2003–04

2001–02

EU biodiesel production is expected to increase in 2016 and 2017, largely reflecting a step-up in consumption mandates in several member states (USDA–FAS 2016a). The step-up in greenhouse gas emission savings from biofuel feedstocks required by the RED in 2017 and incentives from double counting of non-food based feedstocks in some member states are expected to result in continued use of recycled cooking oils and animal fats as biofuel feedstocks. This is expected to result in demand for conventional biodiesel feedstocks such as rapeseed oil (including canola oil) remaining largely unchanged in 2016–17. As a result, supply rather than demand factors are expected to increase EU imports of rapeseed (including canola). EU rapeseed production is estimated to have fallen in 2016–17, supporting EU import demand for rapeseed and canola imports from Australia in 2016–17.

Oils ain’t oils


SugarAustralian sugar production is largely destined for international markets, with around 74 per cent of production exported in the three years to 2014–15. Brazil is the world’s largest producer and exporter of sugar. Fluctuations in Brazilian supplies can affect world sugar prices, which in turn affect Australian sugar producers. In 2015–16 sugar production in Brazil declined by 5 per cent, reflecting an increase in the mandatory blending ratio and the consequent increase in allocation of sugar cane to ethanol production. As a result, world supplies of sugar fell and contributed to an increase in world prices of 24 per cent year-on-year.

Sugar mills in Brazil have been quick to respond to the higher global sugar prices of 2015–16. For the first eight months of the 2016–17 season in Brazil’s South–Central region, cane allocation to sugar production increased by 6 percentage points, resulting in higher sugar and lower ethanol production compared with the previous season. Since mid October 2016 sugar prices have fallen by 15 per cent, and Brazilian ethanol prices (producer prices) have risen by 22 per cent (UNICA 2016). Over the remainder of 2016–17, sugar prices are expected to continue to decline as sugar supply increases from Brazil. This decline is expected to be partially offset by mills allocating more cane to ethanol production in response to Brazilian biofuel policy settings that encourage ethanol consumption. This is putting upward pressure on ethanol producer prices.

Barley and grain sorghumAustralia exports significant volumes of barley and grain sorghum but is not a major exporter of corn. US corn prices strongly influence world feed grain prices (including for barley and grain sorghum), and these can be influenced by ethanol production (National Research Council 2011).

The US EIA (2016b) projects that motor gasoline consumption will rise in 2016 and 2017. The uptake of E15 and E85 has been constrained, so the total volume of ethanol consumed in the United States is expected to move largely in line with overall motor gasoline consumption.

The volume of corn used for US ethanol production in 2015–16 was approximately 132 million tonnes (Figure 10). The share of corn used to produce ethanol as a share of total US consumption reached a peak of 42 per cent in 2012–13. Since then, the ethanol share of corn disposal (consumption plus exports) has reduced to below 40 per cent. The volume of US corn used in ethanol production is forecast to rise in 2016–17, but higher livestock feed use and exports are expected to drive US corn disposal in 2016–17. Closing stocks of US corn are expected to increase strongly, placing downward pressure on corn prices. The increase in the volume of corn used to produce ethanol is expected to support the price of feed grains in 2016–17 but not greatly influence it. Therefore, the volume increase is not expected to significantly influence Australian coarse grain export prices in 2016–17.

Oils ain’t oils


FIGURE 10 Fuel ethanol use of corn, United States, 2003–04 to 2016–17 p

Mt %

p USDA projection.Source: USDA–ERS 2016

Volume of cornused for ethanol

30

60

90

120

150

10

20

30

40

50

Ethanol share of corn consumption(right axis)

2016–17p

2014–15

2012–13

2010–11

2008–09

2006–07

2004–05

ConclusionBiofuel policies in some of the world’s largest biofuel-producing economies could affect returns to Australian agricultural exports such as canola, coarse grains and sugar. Feedstock markets in the three major biofuel economies discussed in this article are subject to distinct supply and demand factors.

US corn supply has increased significantly more than consumption of ethanol in recent years, reducing the effect of feedstock demand on corn prices. The US EPA has ruled that renewable fuel consumption for 2017 must include 57 billion litres of corn starch–derived ethanol. This is the maximum that can count towards the renewable fuel consumption requirement specified by EISA 2007. Increases in US ethanol consumption after 2017 must be derived from advanced biofuels. Domestic consumption requirements for biofuels are not expected to be a key driver of increased corn consumption in the United States over the medium term.

Increased ethanol consumption targets in Brazil since 2013 have contributed to deficiencies in global sugar production and supported higher prices leading into 2016. The Brazilian Government’s policies, pledges under the Paris Agreement and 10-year energy development plan provide some surety that it will continue to encourage growth in the ethanol industry and consequently sugarcane production.

EU policy settings favour the consumption of advanced feedstocks over rapeseed oil (including canola oil). Support for first generation biofuels (which include biodiesel derived from rapeseed oil) is expected to decline in coming years relative to other alternative fuels. In 2014 the European Union agreed on a new policy framework for climate and energy for 2020 to 2030. The European Commission (2014) has stated that no new targets would be set for renewable energy in the transport sector. First generation biofuels are not likely to receive public support from 2020 onwards, but the European Union may provide policy support to promote the use of electric vehicles and advanced biofuels.

Oils ain’t oils


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ANFAVEA 2014, Brazilian automotive industry yearbook (in Portuguese), Associação Nacional dos Fabricantes de Veículos Automotores, available at anfavea.com.br/anuario.html.

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BP 2016, BP Statistical Review of World Energy, June, 65th edn, available at bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html.

CEPEA 2016, ‘Ethanol’, Center for Advanced Studies on Applied Economics, available at cepea.esalq.usp.br/en/indicator/ethanol.aspx, accessed 8 June 2016.

Dinan, T 2015, ‘Testimony on the renewable fuel standard: issues for 2015 and beyond’, Submission to Subcommittee on Environment and the Subcommittee on Oversight, and the Committee on Science, Space, and Technology, US House of Representatives, Congressional Budget Office, November, cbo.gov/publication/50944.

EPE 2011, ‘Notícias’, Empresa de Pesquisa Energética, Ministério de Minas e Energia, Rio de Janeiro, available at epe.gov.br, accessed on 9 November 2016.

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Enerdata 2015, ‘Brazil unveils ten-year energy development plan to 2024’, available at enerdata.net/enerdatauk/press-and-publication/energy-news-001/brazil-unveils-ten-year-energy-development-plan-2024_34128.html.

European Commission 2014, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: a policy framework for climate and energy in the period from 2020 to 2030, January, Brussels, available at eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52014DC0015.

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https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&sqi=2&ved=0ahUKEwibxoC_95LOAhVKJJQKHbz9AiUQFggcMAA&url=http%3A%2F%2Fcepea.esalq.usp.br%2Fenglish%2F&usg=AFQjCNFTPUVAQjWW1ae4pZlICqcZ88IffA&bvm=bv.128153897,d.dGo

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Oils ain’t oils


OECD–FAO 2016, OECD–FAO Agricultural Outlook 2016–2025, Organisation for Economic Co-operation and Development–Food and Agriculture Organization of the United Nations, OECD Publishing, Paris, available at oecd-ilibrary.org/agriculture-and-food/oecd-fao-agricultural-outlook-2016_agr_outlook-2016-en;jsessionid=1cmu8nivmxj6q.x-oecd-live-02.

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South America is a major world producer and exporter of wine. It accounted for almost 14 per cent of wine produced globally in 2013, up from 8 per cent in 2000. Chile and Argentina together account for over 80 per cent of South American wine production, and Brazil accounts for about 10 per cent (Figure 1).

This article focuses on Chile and Argentina, which are both major competitors in Australia’s export markets. Significant investment in the wine industries of both countries has led to improved wine quality, which has supported the expansion of exports of high-value, high-quality wine into many of Australia’s major wine markets.

FIGURE 1 Wine production, South America, 2000 to 2013

Mt

Note: Includes sparkling wine and vermouth.Source: FAO 2016

OtherBrazilChileArgentina

1

2

3

4

2013201120092007200520032001

South American wine industryAndrew Cameron

South American wine industry


ArgentinaDomestic marketArgentina’s wine industry accounts for about 5 per cent of global production. In 2013 it produced 1.5 million tonnes of wine, making it the world’s seventh-largest producing nation by volume. The largest wine producers were France, Italy and the United States (FAO 2016). Australia is ranked eighth.

Most of Argentina’s wine grapes are grown along a 7 500-kilometre strip on the western edge of the country at the base of the Andes mountains (USDA–FAS 2015a). Vineyards are protected from pests and diseases by the region’s high altitude and low humidity. This lowers Argentina’s production costs compared with other countries. The main varieties of red wine produced in Argentina are malbec, bonarda and cabernet sauvignon, and the main white varieties are torrontés and chardonnay.

Argentina’s annual wine production was relatively unchanged from 2000 to 2013, averaging around 1.4 million tonnes, but the average quality has improved markedly. Increased openness to international trade and investment since the 1990s allowed the adoption of more advanced production technologies, which supported the alignment of Argentina’s wine industry with international standards. For example, stainless steel fermentation tanks replaced wooden vats—which were difficult to keep clean and often released undesirable flavours into the wine (Farinelli 2013).

Access to export markets encouraged wineries to develop high-quality and distinctive varieties such as malbec, which is known as Argentina’s signature wine. Because of these improvements, the value of Argentina’s wine exports increased nearly 300 per cent in constant dollar terms between 2000 and 2015, peaking in 2012 at US$968 million (in 2016 US dollars).

Since 2012 the Argentine wine industry has been affected by high inflation, an overvalued currency, and government interventions in trade and foreign investment. Foreign investment by international wine conglomerates was vital for many of Argentina’s most successful export brands (Veseth 2010). However, in late 2011 the Argentine Government passed a law restricting foreign ownership of agricultural land. In 2012 the government introduced further restrictions in the form of increased import duties on a range of goods in an effort to maintain a trade surplus. Equipment vital to the winemaking process, such as corks and staves, was subject to these duties so this raised input costs for Argentine winemakers (USDA–FAS 2015a). At the same time, high inflation put downward pressure on domestic demand and an overvalued currency reduced export competitiveness (Williamson 2016). By 2015 wine exports were down 15 per cent in value terms and 12 per cent in volume terms from the 2012 peak.



ExportsArgentina exported 270 million litres of wine valued at US$818 million in 2015 (UN Statistics Division 2016). Most exports were comprised of bottled still wine (189 million litres), followed by bulk wine (77 million litres) and sparkling wine (4 million litres).

Argentina’s most important export market is the United States, which accounted for 37 per cent of exports by value in 2015 (down from a peak of 41 per cent in 2012) (Figure 2). The European Union was the next largest market, accounting for 25 per cent of exports, followed by Canada with 9 per cent. Brazil is the most important South American market, with about 6 per cent of Argentina’s export share by value.

The United Kingdom is an important and growing part of the European Union market, accounting for 10 per cent of Argentina’s wine exports in 2015. China is a relatively minor but growing market, accounting for 2.5 per cent of exports (worth US$21 million) in 2015, compared with 0.3 per cent a decade earlier.

FIGURE 2 Argentine wine export value, by destination, 2000 to 2015

2016US$m

Note: Includes sparkling wine and vermouth.Source: UN Statistics Division 2016

OtherBrazilCanadaEuropean UnionUnited States

200

400

600

800

1 000

201520122009200620032000

Argentina achieved a considerable increase (of almost 300 per cent) in the value of its wine exports between 2000 and 2015 by diverting production away from the low-value domestic market towards higher valued bottled wine exports. Argentina is not the only country to have pursued this strategy, but the increase in its export unit value has been significant (Figure 3). Over the decade to 2015 the world export unit value for bottled wine increased by 8 per cent in constant dollar terms to US$4 dollars a litre (in 2016 US dollars). Argentina’s export unit value for bottled wine increased by 69 per cent over the same period as demand strengthened for the higher quality product. Over the five years to 2015, Argentine bottled wine traded slightly below the world average export unit price. This provided a competitive advantage over Australian bottled wine, which traded above the world price over the same period. Argentina’s bulk wine export unit value remained broadly in line with the world unit price during this period (UN Statistics Division 2016).



FIGURE 3 Wine unit export value, Argentina and world, 2005 to 2015

2016US$/L

Source: UN Statistics Division 2016

1

2

3

4

5 World—bottledArgentina—bottledWorld—bulkArgentina—bulk

201520132011200920072005

The shift of Argentina’s wine producers towards higher value segments of the global market is partly a response to changes in global demand. However, it was also driven by the loss of export sales and declining competitiveness in the bulk wine category, where small margins limit the capacity of producers to reduce prices or absorb cost increases (USDA–FAS 2015a). Preferential trade agreements secured by competitors, like Chile’s free trade agreements with China and the European Union, accounted for some of this loss in competitiveness. However, domestic economic and political factors throughout the 2000s also played a role (Williamson 2016).

Argentina is a major competitor in all of Australia’s main wine export markets, except China. Neither Argentina nor Australia have free trade agreements with the European Union, the United States or Canada and therefore face the same import tariffs on wine in those markets. The European Union and the United States are Australia’s most important export destinations by value. The European Union is the largest export market for Australia (28 per cent in 2015), dominated by the United Kingdom, with 18 per cent. The United States accounts for 23 per cent of Australia’s export share, followed by China (17 per cent) and Canada (9 per cent).

Argentina faces strong competition in the Chinese wine market. China imposes a tariff of 20 per cent on imports of bulk wine and 14 per cent on bottled wine (WTO 2016). This puts Argentina at a competitive disadvantage to Chile and Australia, which both have free trade agreements with China. China eliminated tariffs on Chilean wine at the beginning of 2015 and Australian wine will be tariff-free by 2019 (DFAT 2015). Argentina’s cost-competitiveness in bulk wine has also decreased because the Chinese bulk wine market has become dominated by Chilean imports and growth in domestic production.



ChileDomestic marketChile’s wine industry accounts for about 7 per cent of global production, with 1.8 million tonnes of wine produced in 2013. Chile’s wine grape growing regions stretch 900 kilometres from the Elqui Valley in the north to the Malleco Valley in the south, along the western side of the Andes. Like Argentina, Chile’s wine grape growing regions are shielded from pests and diseases by high altitude and low humidity. The most common varietal wines produced are cabernet sauvignon, sauvignon blanc and merlot.

Chilean wine production grew significantly between 2000 and 2013, increasing by an average of 12 per cent a year (FAO 2016). This was the fastest rate of growth among the world’s top wine-producing nations and a result of two decades of investment in the industry. Area planted to wine grapes more than doubled and the industry increased use of imported technologies such as stainless steel fermentation tanks, trellis systems and drip irrigation. Grape yields increased from 11.5 tonnes a hectare in 2000 to 15 tonnes a hectare in 2013 (FAO 2016). Unfavourable weather conditions affected yields in 2014 (USDA–FAS 2015b).

Chile has the lowest per person wine consumption of all the major wine-producing and wine-exporting countries, at around 17 litres a person a year (USDA–FAS 2015b). That compares with 29 litres a person in Australia, 40 litres in Argentina and 55 litres in France (ABS 2015). Beer is the preferred alcoholic beverage in Chile. The expansion of the Chilean wine industry has been export focused because of low domestic wine consumption.

ExportsIn 2015 Chile was the fourth-largest exporter of wine globally, shipping 877 million litres valued at US$1.85 billion. Bottled still wine accounted for over half of Chile’s wine exports (487 million litres), followed by bulk wine (386 million litres) and sparkling wine (4 million litres). The value of Chile’s wine exports peaked at just over US$2 billion in 2013.

Chile’s wine exports to the European Union, its most important market by value, totalled US$630 million in 2015 (Figure 4). The United Kingdom accounted for a third of that value. The United States is Chile’s second-largest export market, accounting for 14 per cent of its exports. China and Japan have grown dramatically in importance. Together they accounted for 6 per cent of Chile’s wine exports in 2000 but 23 per cent in 2015. Brazil is Chile’s most important South American market, accounting for 6 per cent of its export share.



FIGURE 4 Chilean wine export value, by destination, 2000 to 2015

2016US$m

Note: Includes sparkling wine and vermouth.Source: UN Statistics Division 2016

OtherBrazilJapanChinaUnited States

500

1 000

1 500

2 000

2 500

201520122009200620032000

European Union

Chile is a major exporter of bottled and bulk wine, ranking fourth globally for both by volume in 2015. Bulk wine accounted for around half of Chile’s wine exports to the European Union and the United States and for two-thirds of its exports to China. Bulk wine is often bottled locally or blended with domestic production in China (Hornby 2016).

The Chilean Government’s support for free trade has delivered significant benefits to Chile’s wine exporters. The government has established free trade agreements with all of its major wine export markets. Chile’s 2003 free trade agreement with the European Union led to the elimination of the European Union’s tariff of €3.2 a litre by 2008 (European Commission 2003). The value of Chile’s exports to that market increased by 60 per cent between 2003 and 2015. Under the 2005 Chile–China Free Trade Agreement, the 14 per cent tariff on bottled and sparkling wine and the 20 per cent tariff on bulk wine were phased out by 2015 (China FTA Network 2005). Between 2005 and 2015, the value of Chile’s exports to that market increased more than twentyfold. Chile is only the second country to obtain tariff-free access to the Chinese wine market. New Zealand gained tariff-free access in 2012 (NZ Foreign Affairs and Trade 2008). Chile has also established free trade agreements with the United States (2004), Japan (2007) and Australia (2009).

China has also been an increasingly important market for the Australian wine industry. Australian exports to China grew at a similar rate to Chile’s exports between 2005 and 2015, despite Chile’s relative competitiveness in that market given its free trade agreement. Australian wine exports will not be tariff-free until 2019 under the China–Australia Free Trade Agreement. However, returns to Australian wine exports are higher than to their Chilean counterparts, because they trade at different price points. Between 2005 and 2015, Australian bottled still wine traded at a 42 per cent premium to Chile’s in constant dollar, weighted average terms—at around US$5.10 a litre compared with US$3.60 a litre (ABS 2016). Australian bulk wine traded at a 56 per cent premium to Chilean bulk wine over the same period. However, bulk wine does not account for a significant share of Australian exports to China by value.



Chile’s focus on improved quality is evident in not only the growth in its exports generally but the changing mix of wine exports to China. Between 2005 and 2015, the share of Chilean bottled still wine exports to China increased from 40 per cent to over 70 per cent by value, reflecting China’s growing appreciation for high-quality Chilean wine. The growing status of Chilean bottled wine, combined with its lower relative price, will continue to support Chile’s global competitiveness.

ReferencesABS 2015, Apparent consumption of alcohol, Australia, 2013–14, cat. no. 4307.0, Australian Bureau of Statistics, Canberra, available at abs.gov.au/AUSSTATS/[email protected]/mf/4307.0.55.001.

ABS 2016, International trade in goods and services, Australia, September 2016, cat. no. 5368.0, Australian Bureau of Statistics, Canberra, available at abs.gov.au/ausstats/[email protected]/mf/5368.0.

China FTA Network 2005, ‘Free trade agreement between the Government of the People’s Republic of China and the Government of the Republic of Chile’, Ministry of Commerce, People’s Republic of China, available at fta.mofcom.gov.cn/topic/enchile.shtml.

DFAT 2015, ‘China–Australia Free Trade Agreement’, Department of Foreign Affairs and Trade, Canberra, available at dfat.gov.au/trade/agreements/chafta/Pages/australia-china-fta.aspx.

European Commission 2003, ‘European Union–Chile Free Trade Agreement’, Brussels, available at ec.europa.eu/trade/policy/countries-and-regions/countries/chile/.

FAO 2016, ‘FAOSTAT’, Food and Agriculture Organization of the United Nations, Rome, available at faostat3.fao.org/download/Q/QD/E, accessed 4 October 2016.

Farinelli, F 2013, Innovation and learning dynamics in the Chilean and Argentine wine industries, AAWE Working Paper no. 145—Business, December, American Association of Wine Economists, New York, available at wine-economics.org/working-papers/#110/1/list.

Hornby, L 2016, ‘Chile: turning copper into wine’, Financial Times, 20 April, available at ft.com/content/bced72c4-0608-11e6-9b51-0fb5e65703ce.

NZ Foreign Affairs and Trade 2008, ‘NZ–China Free Trade Agreement’, Wellington, available at mfat.govt.nz/en/trade/free-trade-agreements/free-trade-agreements-in-force/china-fta/.

UN Statistics Division 2016, ‘UN Comtrade’, New York, available at comtrade.un.org/data, accessed 20 September 2015.

USDA–FAS 2015a, Argentina–Wine annual, GAIN Report, 31 March, Foreign Agricultural Service, US Department of Agriculture, Washington DC, available at gain.fas.usda.gov/Lists/Advanced%20Search/AllItems.aspx.

USDA–FAS 2015b, Chile–Wine annual, GAIN Report, no. CII502, 4 March, Foreign Agricultural Service, US Department of Agriculture, Washington DC, available at gain.fas.usda.gov/Lists/Advanced%20Search/AllItems.aspx.

http://gain.fas.usda.gov/Lists/Advanced Search/AllItems.aspx






Veseth, M 2010, ‘Secrets of Argentina’s export success’, The Wine Economist, available at wineeconomist.com/2010/06/14/secrets-of-argentinas-export-success.

Williamson, L 2016, ‘Recent developments in Argentina’s agricultural export policies’ in Agricultural commodities: March 2016, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.

WTO 2016, ‘World Trade Organization Tariff Download Facility’, available at tariffdata.wto.org/, accessed 7 September 2016.

Running Main Header Milo Pro Medium 8ptRunning Sub Header Milo Pro Light 8pt

Statistical tables


Figures

1 Contribution to GDP 129

2 Markets for Australian merchandise exports 129

3 Sources of Australian merchandise imports 130

4 Principal markets for Australian agricultural, forestry and fisheries exports 131

5 Contribution to exports by sector, balance of payments basis 137

Tables

1 Indexes of prices received by farmers 134

2 Indexes of prices paid by farmers, and terms of trade 135

3 Farm costs and returns 136

4 Volume of production indexes 138

5 Industry gross value added 138

6 Employment 139

7 All banks lending to business 139

8 Rural indebtedness to financial institutions 140

9 Annual world indicator prices of selected commodities 140

10 Gross unit values of farm products 141

11 World production, consumption, stocks and trade for selected commodities 142

12 Agricultural, fisheries and forestry commodity production 144

13 Gross value of farm, fisheries and forestry production 146

14 Crop and forestry areas and livestock numbers 148

15 Average farm yields 149

16 Volume of agricultural and fisheries exports 150

17 Value of agricultural and fisheries exports (fob) 152

18 Agricultural exports to China (fob) 154

19 Agricultural exports to Indonesia (fob) 155

20 Agricultural exports to Japan (fob) 156

21 Agricultural exports to the Republic of Korea (fob) 157

22 Agricultural exports to the United States (fob) 158

23 Volume of fisheries products exports 159

24 Value of fisheries products exports (fob) 160

25 Volume of fisheries products imports 161

26 Value of fisheries products imports 162

27 Value of Australian fisheries products trade, by selected countries 163

28 Volume of forest products exports 164

29 Value of forest products exports (fob) 165

30 Volume of forest products imports 166

31 Value of forest products imports 167

32 Value of Australian forest products trade, by selected countries 168


GDP, exports

FIGURE 2 Markets for Australian merchandise exports in 2015–16 dollars

1% 2%

2% 2%

9% 4%

7% 7%

28% 15%

38% 18%

1% 44%

14% 8%

11% 11%

9% 7%

4% 4%

18% 9%

14% 17%

16% 19%

10% 22%

18% 11%

6% 4%

5% 4%

6% 5%

12% 7%

8% 7%

20% 14%

12% 31%

31% 28%

United States

European Union 28

New Zealand

Japan

Other Asia

ASEAN

China

Other

United States

European Union 28

New Zealand

Japan

Other Asia

ASEAN

China

Other

New Zealand

India

United States

European Union 28

Korea, Rep. of

Japan

China

Other

New Zealand

India

United States

European Union 28

Korea, Rep. of

Japan

China

Other

New Zealand

Singapore

United States

China

Japan

Hong Kong

Vietnam

Other

New Zealand

Singapore

United States

China

Japan

Hong Kong

Vietnam

Other

2015–162005–06

Total $195.7b $243.2b

$35.1b $44.6bAgriculture

$2.0b $1.5bFisheries

FIGURE 1 Contribution to GDP Australia, chain volume measures, reference year 2014–15

Services 77%

Building and construction 8%

Mining 7%

Manufacturing 6%

Agriculture, fishing and forestry 2%

Services 77%

Manufacturing 8%

Building and construction 7%

Mining 5%

Agriculture, fishing and forestry 3%

2015–16

$1 660b

2005–06

$1 265.5b


Import markets

FIGURE 3 Sources of Australian merchandise imports in 2015–16 dollars

5% 6%

5% 7%

11% 10%

19% 18%

15 % 20%

31 % 25%

14% 14%

6% 3%

3% 3%

4% 4%

5% 5%

10% 7%

14% 11%

14% 23%

44% 44%

Singapore

New Zealand

Malaysia

Germany

Japan

United States

China

Other

Singapore

New Zealand

Malaysia

Germany

Japan

United States

China

Other

Other Asia

China

United States

New Zealand

ASEAN

European Union 28

Other

2015–162005–06

Total $214.9b $263.2b

$9.3b $18.1bAgriculture

$1.6b $2.1bFisheriesMalaysia

Indonesia

New Zealand

Vietnam

China

Thailand

Other

Other Asia

China

United States

New Zealand

ASEAN

European Union 28

Other

Malaysia

Indonesia

New Zealand

Vietnam

China

Thailand

Other

2% 4%

3% 5%

13% 10%

11% 12%

8% 15%

22% 20%

41 % 34%


Export markets

FIGURE 4 Principal markets for Australian agricultural, forestry and fisheries exports (nominal)

Quantity wheat

kt

Value wheat

$m

Quantity barley s

kt

Value barley s

$m

Quantity sugar s

kt

Value sugar s

$m

Quantity wine

ML

Value wine

$m

2015–162005–06

Korea, Rep. of

Indonesia

China

Japan

Malaysia

United States

200 400 600 1 000800

Indonesia

400200 600 800 1 2001 000

United Kingdom United Kingdom

United States

China

Canada

New Zealand

Hong Kong

1 000 2 000 3 000 4 000

United States

China

Canada

New Zealand

Hong Kong

50 100 150 200 250 300

Indonesia

China

China

Vietnam

Korea, Rep. of

Yemen

Japan

China

Vietnam

Korea, Rep. of

Yemen

Japan

Saudi Arabia

Japan

United ArabEmirates

Kuwait

Korea, Rep. of

China

Saudi Arabia

Japan

United ArabEmirates

Kuwait

Korea, Rep. of

200 400 600 800 1 000

Korea, Rep. of

Indonesia

China

Japan

Malaysia

United States

100 200 300 400 500 600 700300 600 900 1 200 1 500

500 1 000 1 500 2 000 2 500 3 000

continued ...


Export markets

FIGURE 4 Principal markets for Australian agricultural, forestry and fisheries exports (nominal) continued

Quantity wool

kt

Value wool

$m

Quantity beef and veal

kt

Value beef and veal

$m

Quantity sheep meat

kt

Value sheep meat

$m

Quantity cheese

kt

Value cheese

$m

2015–162005–06

50 100 150 200 250 300 350 500 1 000 1 500 2 000 2 500

Qatar

Japan

China

Korea, Rep. of

Malaysia

United States

Singapore

30252015105 20 40 60 80 100

United StatesUnited States

Japan

Korea, Rep. of

China

Indonesia

Taiwan

100 200 300 400 500 1 000 1 500 2 000 2 500

20 40 60 80 100 100 200 300 400 500

China

India

Korea, Rep. of

Czech Republic

Italy

Taiwan

China

India

Korea, Rep. of

Czech Republic

Italy

Taiwan

China

Malaysia

United States

United ArabEmirates

Japan

Japan

Korea, Rep. of

China

Indonesia

Taiwan

Qatar

China

Malaysia

United States

United ArabEmirates

Japan

Japan

China

Korea, Rep. of

Malaysia

United States

Singapore

continued ...


Export markets

FIGURE 4 Principal markets for Australian agricultural, forestry and fisheries exports (nominal) continued

Quantity paper and paperboard

kt

Value paper and paperboard

$m

Quantity edible fish

kt

Value edible fish

$m

Quantity edible crustaceans and molluscs Value edible crustaceans and molluscs

$m

2015–162005–06

20015010050

New Zealand

United States

China

Taiwan

Japan

50 100 150 200 250

kt

50 100 150 200 250 300

3 6 9 12

2 4 6 8 10 700

Vietnam

100 200 300 400 500 600

New Zealand

United States

China

Taiwan

Japan

United States

Hong Kong

Japan

China

Singapore

United States

Vietnam

Hong Kong

Japan

China

Singapore

United States

Japan

China

New Zealand

Vietnam

Hong Kong

United States

Japan

China

New Zealand

Vietnam

Hong Kong

s ABARES estimate.


TABLE 1 Indexes of prices received by farmers Australia

STATISTICS

Commodity 2011–12 2012–13 2013–14 2014–15 2015–16 s 2016–17 f

Barley 131.7 173.4 167.9 175.6 155.8 115.7Canola 133.1 142.1 144.1 130.6 142.4 140.2Grain sorghum 111.6 148.9 177.2 178.1 147.3 119.4Lupins 118.7 173.5 176.4 149.3 148.2 122.6Oats 147.7 172.9 156.0 183.1 183.1 154.3Wheat 114.6 158.3 159.8 151.7 146.8 123.9Total grains a 115.7 147.9 149.9 147.0 142.6 125.6Cotton 110.8 98.2 103.9 104.4 103.6 119.6Hay 133.0 144.9 160.9 169.6 176.4 180.4Fruit 181.4 156.5 158.8 170.4 162.0 164.7Sugar 147.1 117.5 125.4 127.2 138.5 159.7Vegetables 161.3 172.8 174.1 179.1 172.9 175.8Total crops 117.8 129.3 131.1 131.8 128.7 123.9

Cattle 173.3 163.3 156.3 196.4 261.3 269.5Lambs 250.8 182.8 201.8 233.4 256.1 293.0Sheep 390.3 200.0 250.8 337.8 329.8 417.8Live sheep for export 343.7 247.6 233.4 286.6 312.3 331.8Pigs 134.5 132.5 151.7 156.4 181.0 188.0Poultry 108.3 114.4 116.9 126.2 128.9 125.6Total livestock for slaughter 175.0 158.6 161.2 192.4 235.2 246.3

Wool 169.2 147.3 153.5 159.1 181.2 187.9Milk 139.5 134.7 169.1 162.6 144.1 145.8Eggs 104.2 107.4 112.7 114.6 112.7 113.7Total livestock products 145.2 136.1 157.3 155.9 152.4 155.5Store and breeding stock 199.5 173.8 169.2 209.7 271.4 292.9Total livestock 163.2 149.0 157.5 177.9 205.5 214.4Total prices received 137.2 138.2 142.9 152.4 163.0 163.8a Total for the group includes commodities not separately listed. f ABARES forecast. s ABARES estimate.Note: The indexes for commodity groups are calculated on a chained weight basis using Fisher’s ideal index with a reference year of 1997–98 = 100. Indexes for most individual commodities are based on annual gross unit value of production. Prices used in these calculations exclude GST.Source: ABARES

Livestock products

Livestock

1 Indexes of prices received by farmers Australia

Crops Grains

Livestock for slaughter

Prices


TABLE 2 Indexes of prices paid by farmers, and terms of trade Australia

STATISTICS

Category 2011–12 2012–13 2013–14 2014–15 2015–16 s 2016–17 fFarmers’ terms of trade a 93.3 95.3 98.2 103.9 109.5 108.9

Fodder and feedstuffs 115.6 127.1 126.8 134.5 138.5 130.2 Seed, seedlings and plants 116.4 128.0 130.6 130.4 133.0 126.2 Store and breeding stock 199.5 173.8 169.2 209.7 271.4 292.9 Total seed, fodder and livestock 135.1 137.9 136.9 151.2 167.7 165.8Chemicals 112.6 110.3 113.6 114.7 115.8 121.5Electricity 176.8 180.8 185.7 176.4 176.4 179.4Fertiliser 165.5 157.9 153.2 154.7 157.8 165.5Fuel and lubricants 228.2 216.8 221.1 196.8 177.1 177.1Total 149.2 149.5 150.7 155.1 160.8 162.7Labour 155.6 159.2 163.5 166.3 168.6 171.4Marketing 154.1 153.5 159.3 152.9 147.6 150.1

Insurance 185.8 190.0 195.2 198.5 201.3 204.6Interest paid 114.9 96.4 85.3 79.5 75.6 74.1Rates and taxes 152.9 156.4 160.6 163.4 165.6 168.4Other overheads 148.3 151.7 155.8 158.5 160.7 163.4Total 129.9 117.6 110.6 107.1 104.7 104.3Capital items 153.2 157.0 161.5 164.8 167.7 171.1Total prices paid 147.2 145.1 145.5 146.7 148.8 150.4Excluding capital items 146.6 143.9 143.9 144.9 147.0 148.4Excluding capital and overheads 151.2 151.9 154.2 156.8 160.4 162.5Excluding seed, fodder and livestock 149.7 146.5 147.2 145.6 144.7 147.0

Materials and services

Overheads

2 Indexes of prices paid by farmers, and terms of trade Australia

Seed, fodder and livestock

a Ratio of index of prices received by farmers and index of prices paid by farmers. f ABARES forecast. s ABARES estimate.Note: The indexes for commodity groups are calculated on a chained weight basis using Fisher’s ideal index with a reference year of 1997–98 = 100. Prices used in these calculations exclude GST.Sources: ABARES (compiled from various market sources); Australian Bureau of Statistics

Prices


TABLE 3 Farm costs and returns Australia

STATISTICS

Category unit 2011–12 2012–13 2013–14 2014–15 2015–16 s 2016–17 f

Chemicals $m 1 471 1 369 1 406 1 451 1 500 1 515Fertiliser $m 2 344 2 168 2 091 2 121 2 178 2 236Fuel and lubricants $m 2 407 2 232 2 248 1 978 1 765 1 736Marketing $m 4 007 3 849 4 108 4 119 4 128 4 720Repairs and maintenance $m 3 904 4 121 4 529 4 933 5 285 5 775Seed and fodder $m 4 133 4 619 4 650 4 938 5 102 4 870Other $m 4 411 4 538 4 705 4 721 4 721 4 931Total materials and services $m 22 676 22 897 23 735 24 262 24 679 25 784Labour $m 4 170 4 297 4 363 4 302 4 243 4 359

Interest paid $m 4 836 4 259 3 956 3 874 3 868 3 982Rent and third-party insurance $m 525 537 551 561 569 578Total overheads $m 9 531 9 092 8 870 8 736 8 679 8 919Total cash costs $m 32 207 31 990 32 605 32 998 33 358 34 703Depreciation a $m 5 070 5 197 5 345 5 455 5 552 5 664Total farm costs $m 37 277 37 186 37 950 38 453 38 910 40 367

Gross value of farm production $m 47 760 48 705 51 519 54 451 56 741 60 176

Net value of farm production b $m 10 482 11 518 13 570 15 998 17 831 19 809Real net value of farm production c $m 11 545 12 404 14 227 16 491 18 129 19 809Net farm cash income d $m 15 552 16 715 18 915 21 453 23 383 25 473Real net farm cash income c $m 17 129 18 000 19 831 22 114 23 774 25 473

3 Farm costs and returns Australia

a Based on estimated movements in capital expenditure and prices of capital inputs. b Gross value of farm production less total farm costs. c In 2016–17 Australian dollars. d Gross farm cash income less total cash costs. f ABARES forecast. s ABARES estimate.Note: Prices used in these calculations exclude GST.Sources: ABARES (compiled from various market sources); Australian Bureau of Statistics

Costs Materials and services

Overheads

Returns

Net returns and production

Costs and returns


Exports

FIGURE 5 Contribution to exports by sector, balance of payments basis Australia

2011–12

2012–13

2014–15Other

merchandise19%

Rural a16%

Mineralresources

65%

Othermerchandise

15%

Rural a15%

Mineralresources

70%

Mineralresources

69%

Rural a16%

Othermerchandise

15%

Services credits18%

Rural a13%

Othermerchandise

13%

Mineralresources56%

Services credits 16%

Rural a12%

Othermerchandise

12%

Mineralresources60%

Services credits20%

Rural a15%

Othermerchandise

13%

Mineralresources52%

2015–16Other

merchandise17%

Rural a20%

Mineralresources

63%

Services credits22%

Rural a15%

Othermerchandise

13%

Mineralresources50%

Proportion ofmerchandise exports

Proportion of exportsof goods and services

a ABARES rural balance of payments adjusted to include farm, fisheries and forestry products classified as other merchandise by Australian Bureau of Statistics.Sources: ABARES; Australian Bureau of Statistics

2013–14

Mineralresources

70%

Rural a16%

Othermerchandise

14%

Services credits17%

Rural a13%

Othermerchandise

12%

Mineralresources58%


TABLE 5 Industry gross value added ab Australia

STATISTICS

Industry unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Agriculture $m 32 339 32 716 32 479 32 712 32 958 30 935Forestry and fishing $m 5 336 5 502 5 524 5 554 5 619 5 536Total $m 37 680 38 219 38 001 38 267 38 578 36 471Mining $m 77 878 83 741 91 548 100 426 108 178 114 236

Food, beverage and alcohol $m 25 713 26 301 26 779 26 606 25 915 25 326Textile, clothing, footwear and leather $m 5 359 5 145 5 087 5 097 5 248 5 284Wood and paper products $m 6 844 6 277 6 273 6 373 6 473 6 482Printing, publishing and recorded media $m 4 171 3 749 3 705 3 528 3 349 3 264Petroleum, coal, chemical products $m 20 195 20 557 19 425 19 176 18 613 18 081Non-metallic mineral products $m 6 311 5 984 5 713 5 767 6 244 6 158Metal products $m 18 030 18 406 16 912 17 204 16 660 15 690Machinery and equipment $m 21 503 22 440 21 401 20 020 19 647 18 988Total manufacturing $m 108 134 108 847 105 251 103 722 102 151 99 272Building and construction $m 112 247 123 717 127 156 132 925 130 585 134 390Electricity, gas and water supply $m 41 683 41 932 42 240 41 185 41 953 42 809Taxes less subsidies on products $m 105 063 106 944 108 243 108 364 109 447 110 929Statistical discrepancy $m 0 0 – 1 0 – 1 5 529Gross domestic product $m 1 447 478 1 500 084 1 538 634 1 578 785 1 617 016 1 660 026

Agriculture, forestry and fishing

Manufacturing

5 Industry gross value added ab Australia

a Chain volume measures, reference year is 2014–15. b ANZSIC 2006.Note: Zero is used to denote nil or less than $0.5 million.Source: Australian Bureau of Statistics, Australian national accounts: national income, expenditure and product, cat. no. 5206.0, Canberra; ABS, Balance of payments, Australia , cat. no. 5302.0, Canberra

TABLE 4 Volume of production indexes Australia

STATISTICS

Commodity unit 2011–12 2012–13 2013–14 2014–15 2015–16 s 2016–17 f

Grains and oilseeds index 158.4 138.4 144.9 138.8 137.3 179.0Total crops index 135.0 133.2 131.9 125.0 127.9 152.5Livestock slaughterings index 110.2 116.1 127.7 137.0 126.7 118.5Total livestock index 100.9 104.7 111.4 118.1 111.0 104.6Total farm sector index 118.6 119.6 122.3 122.3 119.7 126.6

Hardwood index 94.1 89.0 107.5 121.8 132.0 130.9Softwood index 126.6 123.0 130.4 136.2 145.9 144.4Total forestry index 111.1 106.7 119.4 129.3 139.3 137.9

Farm

4 Volume of production indexes Australia

Forestry a

a Volume of logs harvested excluding firewood. f ABARES forecast. s ABARES estimate.Note: ABARE revised the method for calculating production indexes in October 1999. The indexes for the different groups of commodities are calculated on a chained weight basis using Fisher’s ideal index with a reference year of 1997–98 = 100. Sources: ABARES; Australian Bureau of Statistics

Sectors


TABLE 6 Employment ab Australia

STATISTICS

Industry unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Horticulture c ’000 59 57 57 63 51 67Sheep, beef cattle and grain ’000 133 129 107 107 116 94Other crop growing ’000 10 9 14 6 5 3Dairy cattle ’000 27 22 20 26 21 30Poultry ’000 10 10 9 4 6 13Other livestock d ’000 12 10 11 9 17 13Other agriculture nfd ’000 45 39 44 55 59 62Total agriculture ’000 294 277 261 270 275 282Forestry and logging ’000 5 8 6 6 5 6Forestry support services ’000 3 3 3 3 3 3Aquaculture ’000 4 4 3 5 7 5Fishing ’000 6 6 5 3 6 5Other agriculture, forestry and fishing ’000 3 2 3 2 2 2Hunting and trapping ’000 1 1 0 0 1 naFishing hunting and trapping nfd ’000 1 1 1 0 1 1Agriculture and fishing support services e ’000 20 20 19 22 18 17Total agriculture, forestry and fishing ’000 337 321 301 311 318 322

Food product ’000 195 186 189 188 197 194Beverage and tobacco ’000 25 33 26 35 31 34Wood product ’000 36 38 37 48 43 42Pulp, paper and converted paper product ’000 19 15 15 14 13 13Total manufacturing ’000 970 938 934 926 913 877Total employment ’000 11 111 11 247 11 381 11 448 11 653 11 881

6 Employment ab Australia

a Average employment over four quarters. b ANZSIC 2006. c Includes nursery, floriculture, vegetable, fruit and tree nut growing. d Includes deer farming. e Includes agriculture, forestry and fishing support services not further defined. na Not available. nfd Not further defined.Notes: Australian Bureau of Statistics advises caution using employment statistics at the ANZSIC subdivision and group levels because estimates may be subject to sampling variability and standard errors too high for most practical purposes. Zero is used to denote nil or less than 500 persons.Source: Australian Bureau of Statistics, Labour force, Australia, cat. no. 6291.0.55.003, Canberra

Agriculture, forestry and fishing

Manufacturing

Employment, banks

TABLE 7 All banks lending to business a Australia

STATISTICS

Industry unit Mar–15 Jun–15 Sep–15 Dec–15 Mar–16 Jun–16Agriculture, forestry and fishing $b 63.0 65.0 64.4 63.3 64.3 66.9Mining $b 36.5 38.2 42.1 38.4 34.6 34.6Manufacturing $b 43.1 46.9 47.8 46.8 45.5 44.8Construction $b 30.8 30.4 30.3 31.2 31.7 32.0Wholesale and retail trade, transport and storage $b 109.8 109.1 114.4 113.0 114.1 115.1Finance and insurance $b 132.7 136.9 152.3 164.9 164.2 172.4Other $b 390.1 394.7 405.6 414.8 426.9 431.5Total $b 806.1 821.1 856.8 872.4 881.3 897.4

7 All banks lending to business a Australia

a Includes variable and fixed interest rate loans outstanding plus bank bills outstanding.Source: Reserve Bank of Australia, Bank lending to business–selected statistics, Bulletin Statistical Table D8


TABLE 8 Rural indebtedness to financial institutions Australia

STATISTICS

Institution unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

All banks a $m 60 184 59 749 61 778 62 461 64 966 66 912Other government agencies b $m 1 871 2 076 2 236 2 451 878 973Pastoral and other finance companies $m 2 010 1 801 1 569 1 486 1 463 1 622Large finance institutional debt c $m 64 065 63 626 65 583 66 397 67 307 69 508

Farm management deposits $m 3 216 3 532 3 721 4 139 4 604 5 068

Pagend

Rural debt

Deposits

8 Rural indebtedness to financial institutions Australia

a Derived from all banks lending to agriculture, fishing and forestry. b Includes the government agency business of state banks and advances made under War Service Land Settlement. c Sum of rural debt. Sources: ABARES; Department of Agriculture and Water Resources, Canberra; Reserve Bank of Australia, Estimated rural debt to specified lenders, Bulletin Statistical Table D9

TABLE 9 Annual world indicator prices of selected commodities

STATISTICS


Wheat a US$/t 299 348 317 266 211 182Corn b US$/t 281 312 219 174 168 154Rice c US$/t 590 565 429 419 386 385Soybeans d US$/t 506 597 547 418 373 390Cotton e USc/lb 100 88 91 71 70 78Sugar g USc/lb 23 18 17 13 17 20

Beef h USc/kg 434 440 440 551 451 448Wool i Ac/kg 1 203 1 035 1 070 1 102 1 253 1 300Butter j US$/t 3 883 3 727 4 498 3 483 3 146 3 450Cheese j US$/t 4 258 4 150 4 817 3 921 3 200 3 400Skim milk powder j US$/t 3 233 3 731 4 513 2 592 1 975 2 150

Crops

Livestock products

9 Annual world indicator prices of selected commodities

a US no. 2 hard red winter wheat, fob Gulf. b US no. 2 yellow corn, fob Gulf. c USDA nominal quote for Thai white rice, 100 per cent, Grade B, fob, Bangkok (August–July basis). d US no. 2 soybeans, fob Gulf. e Cotlook ‘A’ index. f ABARES forecast. g Nearby futures price (October–September basis), Intercontinental Exchange, New York no. 11 contract. h Cow 90CL US cif price. i Australian Wool Exchange eastern market indicator. j Average of traded prices (excluding subsidised sales). s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Australian Wool Exchange; Cotlook Ltd; Dairy Australia; Intercontinental Exchange; International Grains Council; Meat & Livestock Australia; New York Board of Trade; US Department of Agriculture

Farm debt, world prices


TABLE 10 Gross unit values of farm products a

STATISTICS


Barley $/t 210 276 267 280 248 184Corn (maize) $/t 251 238 297 330 323 300Grain sorghum $/t 189 252 300 301 249 202Oats $/t 202 236 213 250 250 211Rice $/t 270 260 340 395 410 375Triticale $/t 176 249 258 256 237 200Wheat $/t 227 313 316 300 290 245

Canola $/t 513 548 555 503 549 541Soybeans c $/t 510 468 538 588 560 563Sunflower seed c $/t 551 570 660 756 652 590

Chickpeas $/t 457 394 352 567 652 1 024Field peas $/t 295 406 419 413 460 349Lupins $/t 232 340 345 292 290 240

Cotton lint d c/kg 225 199 229 199 226 240Sugar cane (cut for crushing) $/t 40 37 40 40 44 51Wine grapes $/t 458 499 441 476 486 496

Beef cattle c/kg 337 318 304 382 508 524Lambs c/kg 509 371 410 474 520 595Pigs c/kg 266 262 300 310 358 372Poultry c/kg 194 205 209 226 231 225

Wool c/kg 666 568 604 626 713 739Milk c/L 42 40 50 49 43 44Eggs c/dozen 196 195 221 229 223 225

10 Gross unit values of farm products a

a Average gross unit value across all grades in principal markets, unless otherwise indicated. Includes the cost of containers, commission and other expenses incurred in getting the commodities to their principal markets. These expenses are significant. b Average unit gross value relates to returns received from crops harvested in that year, regardless of when sales take place, unless otherwise indicated. c Price paid by crusher. d Australian base price for sales in the financial year indicated. f ABARES forecast. s ABARES estimate.Note: Prices used in these calculations exclude GST.Sources: ABARES; Australian Bureau of Statistics

Crops bGrains

Oilseeds

Pulses

Industrial crops

Livestock

Livestock products

Gross unit values


World

TABLE 11 World production, consumption, stocks and trade for selected commodities a

STATISTICS


production Mt 700 658 717 730 737 750 consumption Mt 700 678 698 715 720 736 closing stocks Mt 192 171 190 205 222 235 exports bc Mt 147 142 157 153 164 166

production Mt 1 156 1 137 1 280 1 306 1 248 1 323 consumption Mt 1 137 1 141 1 226 1 255 1 263 1 303 closing stocks Mt 162 164 211 245 245 254 exports b Mt 147 123 164 186 163 182

production d Mt 468 473 478 480 472 484 consumption d Mt 457 467 479 478 474 483 closing stocks d Mt 111 117 116 118 116 118 exports be Mt 39 38 43 42 40 41

production Mt 447 475 504 537 521 551 consumption Mt 467 469 493 517 526 544 closing stocks Mt 67 68 78 93 89 96 exports Mt 112 119 134 147 153 158





continued ...

11 World production, consumption, stocks and trade for selected commodities a

Vegetable protein meals

Grains

Cotton

Sugar

Oilseeds and vegetable oils

Industrial crops

Wheat

Coarse grains

Rice

Oilseeds

Vegetable oils


World

TABLE 11 World production, consumption, stocks and trade for selected commodities a continued

STATISTICS


production Mt 262 267 271 273 276 278 consumption Mt 258 263 266 268 271 275 closing stocks Mt 2.9 2.9 3.1 2.8 2.8 2.9 exports b Mt 27 28 28 28 29 31

production kt 1 135 1 163 1 163 1 158 1 155 1 154 consumption ej kt 1 125 1 162 1 154 1 158 1 155 1 154 closing stocks k kt 24 25 35 35 30 30 exports l kt 447 576 553 551 549 547

production kt 9 027 9 249 9 634 9 880 10 073 na consumption kt 8 490 8 716 9 020 9 180 9 404 na closing stocks kt 247 231 254 328 346 na exports kt 816 868 920 908 965 na

production kt 4 059 4 051 4 512 4 712 4 786 na consumption kt 3 449 3 488 3 604 3 778 3 781 na closing stocks kt 431 383 503 558 748 na exports kt 1 702 1 759 1 966 2 059 1 988 na

11 World production, consumption, stocks and trade for selected commodities a continued

a Some figures are not based on precise or complete analyses. b Excludes intra-EU trade. c Includes the grain equivalent of wheat flour. d Milled equivalent. e On a calendar year basis, e.g. 2011–12 = 2012. f ABARES forecast. g Beef and veal, mutton, lamb, goat, pig and chicken meat. h Selected countries. i Clean equivalent. j Virgin wool at the spinning stage in 65 countries. k Held by marketing bodies and on-farm in five major exporting countries. l Five major exporting countries.m Non-fat dry milk. s ABARES estimate. na Not available.Sources: ABARES; Argentine Wool Federation; Australian Bureau of Statistics; Capewools South Africa; Commonwealth Secretariat; Department of Agriculture and Water Resources, Canberra; Economic Commission for Europe; Fearnleys; Food and Agriculture Organization; International Grains Council; International Sugar Organization; International Wool Textile Organisation; Ministry of Agriculture, Forestry and Fisheries (Japan); New Zealand Wool Board; Poimena Analysis, Melbourne; US Department of Agriculture; Uruguayan Association of Wool Exporters

Livestock products Meat egh

Wool i

Butter eh

Skim milk powder ehm


Australian production

TABLE 12 Agricultural, fisheries and forestry commodity production Australia

STATISTICS


Barley kt 8 221 7 472 9 174 8 646 8 593 10 644Corn (maize) kt 451 506 390 495 439 519Grain sorghum kt 2 239 2 229 1 282 2 209 2 037 1 439Oats kt 1 262 1 121 1 255 1 198 1 308 1 805Rice kt 919 1 161 819 690 250 916Triticale kt 285 171 126 143 195 237Wheat kt 29 905 22 855 25 303 23 743 24 193 32 643

Canola kt 3 427 4 142 3 832 3 540 2 944 3 581Cottonseed kt 1 732 1 439 1 252 746 885 1 455Soybeans kt 52 70 32 37 40 54Sunflower seed kt 28 38 18 30 25 34Other oilseeds a kt 39 41 27 21 24 30

Chickpeas kt 673 813 629 555 1 013 1 227Field peas kt 342 320 342 290 205 370Lupins kt 982 459 626 549 607 969Total grains, oilseeds and pulses b kt 51 164 43 439 45 726 43 459 43 415 56 997

Cotton lint kt 1 225 1 017 885 528 626 1 029Sugar cane (cut for crushing) kt 27 943 30 001 30 521 32 360 34 828 35 500Sugar (tonnes actual) kt 3 683 4 248 4 364 4 572 4 920 5 100Wine grapes kt 1 582 1 642 1 438 1 608 1 710 1 610

Apples kt 289 289 267 295 300 300Bananas kt 286 330 254 252 350 330Oranges kt 390 401 350 338 420 420

Carrots kt 319 272 243 261 305 310Onions kt 347 302 256 315 320 340Potatoes kt 1 288 1 273 1 171 1 155 1 155 1 100Tomatoes kt 372 456 326 389 395 395

Cattle and calves ’000 7 873 8 457 9 473 10 103 8 796 7 790Lambs ’000 18 879 21 122 21 899 22 867 23 131 22 800Sheep ’000 5 175 8 192 10 066 9 022 8 127 6 500Pigs ’000 4 733 4 745 4 778 4 924 5 000 5 075Chickens million 551 563 580 591 623 642

Cattle c ’000 683 634 1 133 1 379 1 258 975Sheep d ’000 2 562 2 000 2 020 2 180 1 859 1 900

Beef and veal kt 2 115 2 245 2 464 2 662 2 344 2 140Lamb kt 419 457 474 507 516 510Mutton kt 120 183 228 214 196 156Chicken meat kt 1 030 1 046 1 084 1 116 1 150 1 196Pig meat kt 351 356 360 371 378 385Total meat produced kt 4 034 4 287 4 610 4 869 4 584 4 387

Industrial crops

continued ...

Horticulture

Vegetables

LivestockSlaughterings

Live exports

Meat produced e

Fruit

12 Agricultural, fisheries and forestry commodity production Australia

CropsGrains

Oilseeds

Pulses


Australian production

TABLE 12 Agricultural, fisheries and forestry commodity production Australia continued

STATISTICS

12 Agricultural, fisheries and forestry commodity production Australia continued


Wool g kt 411 435 419 427 404 400Milk h ML 9 574 9 317 9 372 9 732 9 539 9 000Eggs million dozen 298 335 322 318 330 349Butter i kt 120 118 116 119 118 117Cheese kt 347 338 311 344 344 344Casein kt 5 5 4 0 0 1Skim milk powder kt 230 224 211 242 256 211Whole milk powder kt 140 109 126 97 66 60Buttermilk powder kt 11 11 11 12 11 11

Hardwood ’000 m3 9 548 9 029 10 899 12 356 13 390 13 279Softwood ’000 m3 13 949 13 551 14 367 14 999 16 076 15 904Total forestry products ’000 m3 23 497 22 580 25 266 27 355 29 466 29 183

Tuna kt 10.1 10.6 10.7 12.4 13.7 12.8Salmonids l kt 44.2 43.0 41.8 48.6 55.0 60.4Other fish kt 113.1 106.5 101.3 101.0 104.2 103.8Prawns kt 22.5 21.3 25.0 25.1 26.1 26.3Rock lobster m kt 9.1 10.3 10.4 10.3 10.1 10.4Abalone kt 5.1 5.0 4.7 4.6 4.7 4.6Scallops kt 3.6 6.8 4.4 4.3 4.9 4.9Oysters kt 12.6 12.4 11.6 10.9 9.5 8.9Other molluscs kt 7.9 8.0 5.9 7.1 7.2 7.2Other crustaceans kt 5.5 5.3 5.5 5.6 5.5 5.6

Livestock products

Forestry products j

Fisheries k

a Linseed, safflower seed and peanuts. b Total includes components not listed separately. c Includes all bovine for feeder/slaughter, breeding and dairy purposes. d Includes animals for breeding. e In carcase weight and includes carcase equivalent of canned meats. f ABARES forecast. g Greasy equivalent of shorn wool (includes crutching), dead and fellmongered wool and wool exported on skins. h Includes the whole milk equivalent of farm cream intake. i Includes the butter equivalent of butter oil, butter concentrate, ghee and dry butterfat. j Excludes logs harvested for firewood. k Liveweight. l Includes salmon and trout production. m Includes Queensland bugs. s ABARES estimate.Note: Zero is used to denote nil or less than 500 tonnes.Sources: ABARES; Australian Bureau of Statistics; Australian Fisheries Management Authority; Dairy Australia; Department of Fisheries, Western Australia; Department of Primary Industries, Parks, Water and Environment, Tasmania; Fisheries Queensland, Department of Agriculture, Fisheries and Forestry; Fisheries Victoria, Department of Primary Industries; Industry & Investment New South Wales; Northern Territory Department of Regional Development, Primary Industry, Fisheries and Resources; Primary Industries and Regions, Fisheries, South Australia; Pulse Australia; Raw Cotton Marketing Advisory Committee; South Australian Research and Development Institute; state and territory forest services; various Australian forestry industries


Value of production

TABLE 13 Gross value of farm, fisheries and forestry production Australia

STATISTICS


Barley $m 1 723 2 063 2 453 2 417 2 132 1 961

Corn (maize) $m 113 120 116 163 142 156

Grain sorghum $m 423 562 384 666 508 291

Oats $m 255 265 268 300 327 381

Rice $m 248 302 279 273 103 344

Triticale $m 50 43 32 37 46 47

Wheat $m 6 775 7 154 7 998 7 124 7 025 8 000

Other cereals $m 105 110 115 90 100 90

Canola $m 1 759 2 270 2 129 1 782 1 617 1 936

Soybeans $m 27 33 17 22 23 31

Sunflower seed $m 16 22 12 23 16 20

Other oilseeds a $m 38 33 26 26 19 23

Chickpeas $m 308 320 222 315 660 1 257

Field peas $m 101 130 143 120 94 129

Lupins $m 228 156 216 160 176 233

Other pulses $m 297 347 391 425 534 718

Total grains, oilseeds and pulses b $m 12 466 13 927 14 800 13 943 13 521 15 615

Cotton lint and cottonseed c $m 2 954 2 174 2 002 1 200 1 413 2 679

Sugar cane (cut for crushing) $m 1 128 1 118 1 226 1 304 1 527 1 826

Wine grapes $m 725 858 672 765 817 820

Total industrial crops $m 4 807 4 150 3 900 3 268 3 757 5 325

Table and dried grapes $m 316 303 331 343 370 385

Fruit and nuts (excl. grapes) $m 3 050 3 662 3 187 3 512 3 690 3 815

Vegetables $m 3 339 3 770 3 510 3 350 3 500 3 600

Nursery, cut flowers and turf $m 1 272 1 285 1 247 1 252 1 340 1 475

Other horticulture nei d $m 358 251 233 232 235 240

Total horticulture $m 8 334 9 271 8 507 8 689 9 135 9 515

Other crops nei e $m 973 1 245 1 490 1 538 1 225 1 250

Total crops $m 26 579 28 592 28 697 27 438 27 638 31 704continued ...

Horticulture

13 Gross value of farm, fisheries and forestry production Australia

Oilseeds

Pulses

Industrial crops

CropsGrains


Value of production

TABLE 13 Gross value of farm, fisheries and forestry production Australia continued

STATISTICS


Cattle and calves gh $m 7 134 7 136 7 495 10 175 11 916 11 224Sheep h $m 419 329 513 650 580 585Lambs h $m 2 136 1 696 1 943 2 401 2 686 3 033Pigs h $m 934 934 1 081 1 149 1 353 1 434Poultry $m 2 078 2 214 2 344 2 610 2 747 2 774

Cattle exported live i $m 651 589 1 049 1 356 1 551 1 279Sheep exported live j $m 345 194 185 245 228 247Total livestock k $m 13 797 13 212 14 765 18 785 21 272 20 711

Wool l $m 2 734 2 472 2 530 2 676 2 881 2 957Milk m $m 3 986 3 687 4 729 4 722 4 102 3 915Eggs $m 583 653 710 729 738 786Honey and beeswax $m 79 88 88 101 110 102Total livestock products $m 7 383 6 900 8 057 8 227 7 831 7 760Total farm $m 47 760 48 705 51 519 54 451 56 741 60 176

Hardwood $m 745 680 822 969 1 117 1 120Softwood $m 879 836 1 018 1 066 1 154 1 153Total forestry products $m 1 624 1 516 1 840 2 034 2 271 2 272

Tuna $m 172 176 147 161 174 178Salmonids p $m 514 518 543 631 702 774Other fish q $m 456 446 403 434 456 457Prawns $m 266 278 339 358 413 418Rock lobster r $m 394 439 586 668 684 723Abalone $m 170 178 164 164 171 170Scallops $m 8 15 11 11 13 13Oysters $m 90 94 91 92 87 85Pearls t $m 102 79 61 68 90 93Other molluscs $m 33 64 49 65 64 65Other crustaceans $m 67 64 64 65 64 67Total fisheries products u $m 2 305 2 385 2 470 2 761 2 907 3 032a Linseed, safflower seed and peanuts. b Total includes components not listed separately. c Value delivered to gin. d Includes miscellaneous products: aromatic and medicinal foliage, vegetables for seeds and other products. e Mainly fodder crops. f ABARES forecast. g Includes dairy cattle slaughtered. h Excludes skin and hide values. i Includes all bovine for feeder/slaughter, breeding and dairy purposes j Includes animals exported for breeding purposes. k Total livestock slaughterings includes livestock disposals. l Shorn, dead and fellmongered wool and wool exported on skins. m Milk intake by factories and valued at the farm gate. n Excludes logs harvested for firewood. o Value to fishers of product landed in Australia. p Includes salmon and trout production. q Includes an estimated value of aquaculture. r Includes Queensland bugs. s ABARES estimate. t Northern Territory aquaculture production not included in 2012–13 due to confidentiality. u Total may not equal the sum of the products due to values not elsewhere included not being present in table. nei Not elsewhere included.Note: The gross value of production is the value placed on recorded production at the wholesale prices realised in the marketplace. The point of measurement can vary between commodities. Generally the marketplace is the metropolitan market in each state and territory. However, where commodities are consumed locally or where they become raw material for a secondary industry, these points are presumed to be the marketplace. Prices used in these calculations exclude GST. Sources: ABARES; Australian Bureau of Statistics

Fisheries products o

13 Gross value of farm and fisheries production Australia continued

LivestockSlaughterings

Live exports

Livestock products

Forestry products n


Areas, stock

TABLE 14 Crop and forestry areas and livestock numbers Australia

STATISTICS


Barley ’000 ha 3 718 3 644 3 814 4 078 4 105 4 000Corn (maize) ’000 ha 70 78 52 60 67 74Grain sorghum ’000 ha 659 647 532 732 681 471Oats ’000 ha 731 729 715 854 832 909Rice ’000 ha 103 113 75 70 23 90Triticale ’000 ha 145 99 80 82 117 96Wheat ’000 ha 13 902 12 979 12 613 12 384 12 793 12 957

Canola ’000 ha 2 461 3 272 2 721 2 897 2 357 2 327Soybeans ’000 ha 33 48 25 20 21 28Sunflower seed ’000 ha 25 33 17 25 23 29Other oilseeds a ’000 ha 26 33 21 13 15 15

Chickpeas ’000 ha 456 574 508 425 661 789Field peas ’000 ha 249 281 245 237 238 230Lupins ’000 ha 689 450 387 443 490 522Total grains, oilseeds and pulses b ’000 ha 24 275 23 856 22 583 22 934 23 317 23 727

Cotton ’000 ha 600 443 392 197 270 520Sugar cane c ’000 ha 368 349 356 378 381 393Wine grapes d ’000 ha 145 133 127 132 133 134

Beef cattle million 25.69 26.46 26.30 24.60 23.29 23.97Dairy cattle million 2.73 2.83 2.81 2.81 2.79 2.70 Milking herd g million 1.70 1.69 1.65 1.69 1.66 1.60Total cattle million 28.42 29.29 29.10 27.41 26.08 26.67Sheep million 74.72 75.55 72.61 70.91 68.37 71.50Pigs million 2.14 2.10 2.31 2.27 2.23 2.20 Sows ’000 267 260 266 270 275 280

Hardwood ’000 ha 977 976 963 928 na naSoftwood ’000 ha 1 024 1 024 1 024 1 035 na naTotal plantation area h ’000 ha 2 013 2 013 2 000 1 973 na na

Forestry plantation area

14 Crop and forestry areas and livestock numbers Australia

a Linseed, safflower and peanuts. b Total includes components not listed separately. c Cut for crushing. d This figure is for grapes for wine only. e At 30 June. f ABARES forecast. g Cows in milk and dry. h Includes areas where plantation type is unknown. s ABARES estimate. na Not available.Sources: ABARES; Australian Bureau of Statistics; Pulse Australia

Crop areasGrains

Oilseeds

Pulses

Industrial crops

Livestock numbers e


Yields

TABLE 15 Average farm yields Australia

STATISTICS


Barley t/ha 2.21 2.05 2.41 2.12 2.09 2.66Corn (maize) t/ha 6.47 6.49 7.45 8.30 6.54 7.01Grain sorghum t/ha 3.40 3.45 2.41 3.02 2.99 3.05Oats t/ha 1.73 1.54 1.76 1.40 1.57 1.99Rice t/ha 8.91 10.28 10.94 9.91 10.90 10.13Triticale t/ha 1.97 1.73 1.57 1.76 1.67 2.46Wheat t/ha 2.15 1.76 2.01 1.92 1.89 2.52

Canola t/ha 1.39 1.27 1.41 1.22 1.25 1.54Soybeans t/ha 1.57 1.46 1.27 1.86 1.93 1.97Sunflower seed t/ha 1.14 1.16 1.05 1.20 1.10 1.16

Chickpeas t/ha 1.48 1.42 1.24 1.31 1.53 1.56Field peas t/ha 1.38 1.14 1.40 1.23 0.86 1.61Lupins t/ha 1.42 1.02 1.62 1.24 1.24 1.86

Cotton (lint) t/ha 2.04 2.30 2.26 2.68 2.32 1.98Sugar cane (for crushing) t/ha 76 86 86 86 91 90Wine grapes t/ha 10.9 12.3 11.3 12.1 12.9 12.0

Wool a kg/sheep 4.48 4.47 4.37 4.50 4.43 4.50Whole milk L/cow 5 631 5 518 5 692 5 761 5 736 5 625a Shorn (including lambs). f ABARES forecast. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Dairy Australia; Pulse Australia

15 Average farm yields Australia

CropsGrains

Oilseeds

Pulses

Industrial crops

Livestock products


Export volumes

TABLE 16 Volume of agricultural and fisheries exports Australia

STATISTICS


Barley a kt 6 568 5 165 7 124 6 208 5 498 7 576Corn (maize) kt 68 134 83 58 41 87Grain sorghum kt 1 112 1 291 701 1 205 1 075 858Oats kt 163 241 213 284 230 360Rice kt 537 584 544 461 317 241Wheat b kt 23 026 21 265 18 336 16 571 15 777 22 414

Canola kt 2 323 3 488 3 194 2 445 1 946 2 780Cottonseed kt 654 754 464 167 147 786Other oilseeds c kt 6 10 14 6 10 7

Chickpeas kt 653 852 562 674 1 140 1 226Peas d kt 248 208 155 179 143 244Lupins kt 316 416 274 270 232 581Other pulses kt 775 691 795 597 514 1 093Total grains, oilseeds and pulses kt 36 448 35 100 32 458 29 124 27 070 38 251

Raw cotton e kt 994 1 305 1 036 681 536 772Sugar kt 2 572 3 004 3 052 3 675 3 946 4 051Wine ML 737 717 717 745 727 737

Beef and veal g kt 948 1 014 1 184 1 349 1 167 990Live feeder/slaughter cattle h ’000 579 513 1 006 1 295 1 114 865Live breeder cattle i ’000 105 121 127 83 144 110Lamb g kt 174 201 226 242 242 239Live sheep j ’000 2 562 2 000 2 020 2 180 1 859 1 900Mutton g kt 89 144 183 169 148 119Pig meat g kt 29 26 27 27 27 28Poultry meat g kt 38 32 37 36 29 31

Greasy ks kt 301 316 295 325 296 296Semi-processed kt (gr. eq.) 37 34 35 41 35 35Skins kt (gr. eq.) 67 86 97 92 86 81Total wool ks kt (gr. eq.) 405 437 428 459 417 411

Butter l kt 49 54 49 44 34 32Cheese kt 161 174 151 159 172 165Casein kt 4 4 3 0 0 0Skim milk powder kt 141 147 143 186 181 140Whole milk powder kt 102 87 94 69 57 60

continued ...

Meat and live animals

Wool

Dairy products

16 Volume of agricultural and fisheries exports Australia

Farm

Industrial crops

CropsGrains

Oilseeds

Pulses


Export volumes

TABLE 16 Volume of agricultural and fisheries exports Australia continued

STATISTICS


Tuna kt 8.9 8.9 11.0 12.1 13.8 12.2Salmonids kt 5.8 2.6 1.8 5.0 8.0 8.5Other fish kt 6.5 5.5 4.9 5.8 19.8 17.6

Frozen kt 5.3 3.9 7.0 6.4 6.6 6.6

Fresh, chilled, frozen or cooked kt 6.9 7.8 8.0 8.2 8.0 8.2

Live, fresh or chilled kt 1.6 1.4 1.5 1.3 1.4 1.4 Frozen or cooked kt 0.8 0.7 0.7 0.8 0.7 0.7 Prepared or preserved kt 0.8 0.7 0.5 0.5 0.5 0.6Scallops n kt 0.4 0.4 0.5 0.3 0.4 0.5a Includes the grain equivalent of malt. b Includes the grain equivalent of wheat flour. c Includes soybeans, linseed, sunflower seed, safflower seed and peanuts. Excludes meals and oils. d Includes field peas and cowpeas. e Excludes cotton waste and linters. f ABARES forecast. g In shipped weight. Fresh, chilled or frozen. h Includes buffalo. i Includes dairy cattle and buffalo. j Includes breeding stock. k Australian Bureau of Statistics recorded trade data adjusted for changes in stock levels held overseas. l Includes ghee, dry butterfat, butter concentrate and butter oil, and dairy spreads, all expressed as butter. m Excludes volume of other prawn products. n Includes crumbed scallops. s ABARES estimate.Note: Zero used to denote nil or less than 500 tonnes.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resources, Canberra; Department of Foreign Affairs and Trade; United Nations Commodity Trade Statistics Database (UN Comtrade)

16 Volume of agricultural and fisheries exports Australia continued

Fisheries products

Prawns m

Rock lobster

Abalone


Export values

TABLE 17 Value of agricultural and fisheries exports (fob) Australia

STATISTICS


Barley a $m 1 875 1 626 2 199 2 137 1 790 2 060Corn (maize) $m 24 50 36 30 22 34Grain sorghum $m 299 364 253 424 364 222Oats $m 47 83 80 106 104 129Rice $m 427 459 490 506 412 265Wheat b $m 6 378 6 776 6 103 5 547 5 120 6 419

Canola $m 1 344 2 094 1 929 1 349 1 097 1 463Cottonseed $m 195 219 168 75 69 357Other oilseeds c $m 10 13 18 14 19 22

Chickpeas $m 384 533 297 414 1 013 1 764Peas d $m 93 89 67 91 86 111Lupins $m 86 143 116 119 94 77Other pulses $m 436 418 539 541 560 1 155Total grains, oilseeds and pulses $m 11 598 12 869 12 296 11 352 10 749 14 079

Raw cotton e $m 2 736 2 695 2 355 1 546 1 264 1 972Sugar $m 1 556 1 437 1 384 1 643 1 922 2 361Wine $m 1 910 1 867 1 847 1 983 2 184 2 247Total industrial crops $m 6 203 5 999 5 587 5 172 5 369 6 580

Fruit $m 505 634 724 755 1 072 1 200Tree nuts $m 240 348 610 734 930 960Vegetables $m 276 260 270 293 344 380Nursery $m 15 12 11 12 15 18Other horticulture g $m 258 224 250 266 310 325Total horticulture $m 1 294 1 478 1 865 2 060 2 671 2 883Other crops and crop products $m 2 125 2 240 2 603 3 033 3 874 3 612Total crops $m 21 219 22 585 22 351 21 617 22 664 27 154

Beef and veal $m 4 467 4 871 6 265 8 858 8 285 6 895Live feeder/slaughter cattle h $m 412 339 795 1 163 1 280 1 060Live breeder cattle i $m 239 251 255 192 271 219Lamb $m 1 060 1 086 1 468 1 695 1 640 1 698Live sheep j $m 345 194 185 245 228 247Mutton $m 362 480 758 778 663 584Pig meat $m 100 81 85 102 119 124Poultry meat $m 45 43 50 56 53 55Total meat and live animals $m 7 030 7 344 9 859 13 090 12 539 10 881

Greasy k $m 2 448 2 261 2 212 2 497 2 590 2 685Semi-processed $m 242 209 238 282 281 289Skins $m 433 398 426 375 412 400Total wool k $m 3 123 2 869 2 877 3 154 3 283 3 375

Grains

Pulses

Farm

continued ...

17 Value of agricultural and fisheries exports (fob) Australia


Wool

Industrial crops

Horticulture

Oilseeds

Crops


Export values

TABLE 17 Value of agricultural and fisheries exports (fob) Australia continued

STATISTICS


Butter $m 201 180 243 198 156 166

Cheese $m 751 784 765 823 859 842

Casein $m 48 46 42 10 10 9

Skim milk powder $m 474 467 708 682 516 423

Whole milk powder $m 378 312 532 294 257 225

Other dairy products l $m 877 942 904 868 1 202 1 341

Total dairy products $m 2 730 2 731 3 194 2 876 3 001 3 006

Other livestock and livestock products $m 2 287 2 512 2 876 3 192 3 066 3 133

Total livestock exports $m 15 170 15 456 18 806 22 312 21 888 20 395

Total farm exports $m 36 389 38 041 41 157 43 928 44 552 47 549

Tuna $m 163 163 136 151 163 166

Salmonids $m 42 25 17 48 80 88

Other fish $m 85 70 72 72 111 85

Frozen $m 65 51 99 93 113 115

Fresh, chilled, frozen or cooked $m 387 447 590 691 693 733

Live, fresh or chilled $m 81 80 74 77 84 84

Frozen or cooked $m 57 55 56 60 59 56

Prepared or preserved $m 59 52 41 36 39 41Scallops n $m 15 11 14 11 12 15

Pearls $m 207 152 144 111 96 96

Other fisheries products $m 66 70 61 89 91 116

Total fisheries products $m 1 227 1 175 1 304 1 440 1 542 1 595a Includes malt. b Includes wheat flour. c Includes soybeans, linseed, sunflower seed, safflower seed and peanuts. Excludes meals and oils. d Field peas and cowpeas. e Excludes cotton waste and linters. f ABARES forecast. g Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. h Includes buffalo. i Includes dairy cattle and buffalo. j Includes breeding stock. k On a balance of payments basis. Australian Bureau of Statistics recorded trade data adjusted for changes in stock levels held overseas. l Other dairy products include food preparations identified by industry as containing a high proportion of dairy products. m Other prawn products included in other fisheries products. n Includes crumbed scallops. s ABARES estimate.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resources, Canberra; United Nations Commodity Trade Statistics Database (UN Comtrade)

17 Value of agricultural and fisheries exports (fob) Australia continued

Dairy products

Fisheries products

Prawns m

Abalone

Rock lobster


TABLE 18 Agricultural exports to China (fob) Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 s

Barley a $m 311 454 494 1 080 1 464 820Grain sorghum $m 14 4 98 215 410 350Wheat b $m 144 457 357 484 323 426Other grains c $m 0 1 6 0 0 1Oilseeds $m 45 116 344 627 317 14Pulses $m 3 4 1 1 17 20Total grains, oilseeds and pulses $m 516 1 036 1 300 2 407 2 531 1 631

Raw cotton d $m 551 1 812 1 849 1 520 851 634Sugar $m 31 21 2 42 126 141Wine $m 178 209 241 202 269 416Total industrial crops $m 760 2 041 2 093 1 764 1 246 1 190

Fruit $m 8 10 28 37 64 187Tree nuts $m 6 11 36 37 39 63Vegetables $m 2 3 3 3 4 4Nursery $m 1 1 0 0 1 1Other horticulture e $m 3 4 4 4 5 8Total horticulture $m 20 29 71 82 113 263Other crops and crop products $m 8 22 30 31 46 23Total crops $m 1 305 3 128 3 493 4 284 3 936 3 107

Beef and veal $m 28 40 406 785 736 854Live breeder cattle g $m 102 133 125 180 149 221Lamb $m 63 73 108 184 152 122Mutton $m 12 14 102 209 137 64Other meat and live animals h $m 4 0 1 19 37 30Total meat and live animals i $m 209 260 741 1 378 1 212 1 291

Greasy $m 1 864 1 925 1 844 1 713 1 986 2 017Semi-processed $m 21 24 18 18 32 15Skins $m 351 369 337 378 336 385Total wool $m 2 235 2 319 2 200 2 109 2 354 2 417

Butter $m 4 7 6 7 11 11Cheese $m 30 37 44 74 72 85Casein $m 1 1 1 1 0 0Skim milk powder $m 37 50 35 108 59 70Whole milk powder $m 52 11 56 159 20 82Other dairy products $m 154 185 208 151 173 427Total dairy products $m 278 291 350 501 335 676Other livestock exports $m 558 614 635 778 833 653Total livestock and livestock products $m 3 279 3 484 3 926 4 765 4 734 5 036Total agricultural exports $m 4 584 6 612 7 419 9 049 8 670 8 144a Includes malt. b Includes wheat flour. c Includes grains not separately listed. d Excludes cotton waste and linters. e Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. g Includes dairy cattle and buffalo. h Includes meat and other live animals not listed separately. i Excludes value of live feeder slaughter for October 2015. s ABARES estimate.Note: Zero is used to denote nil or less than $0.5 million.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resources, Canberra

18 Agricultural exports to China (fob) Australia

Dairy products

Farm

Industrial crops

Horticulture


Wool

CropsGrains

Agricultural exports


TABLE 19 Agricultural exports to Indonesia (fob) Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 s

Barley a $m 9 10 7 6 5 5Wheat b $m 1 144 1 156 1 395 1 194 1 403 1 127Other grains, oilseeds and pulses c $m 15 14 12 28 14 18Total grains, oilseeds and pulses $m 1 169 1 180 1 414 1 228 1 423 1 150

Raw cotton d $m 247 282 220 174 136 129Sugar $m 296 302 316 467 519 477Wine $m 4 4 5 3 4 4Total industrial crops $m 547 588 540 644 659 610


Beef and veal $m 169 156 132 245 233 311Live feeder/slaughter cattle g $m 287 252 165 452 595 578Live breeder cattle h $m 3 2 9 9 5 7Lamb $m 6 9 8 4 7 8Mutton $m 1 1 2 1 4 6Other meat and live animals i $m 0 0 0 0 0 0Total meat and live animals $m 466 421 316 712 844 910Wool $m 1 0 0 1 1 0

Butter $m 9 4 5 7 5 3Cheese $m 19 19 18 18 18 18Casein $m 5 7 9 10 0 0Skim milk powder $m 80 72 68 126 164 120Whole milk powder $m 40 34 18 37 8 3Other dairy products $m 34 39 28 39 56 51Total dairy products $m 187 174 148 237 251 195Other livestock products $m 101 113 146 147 142 122Total livestock and livestock products $m 755 709 611 1 096 1 238 1 228Total agricultural exports $m 2 523 2 534 2 640 3 051 3 411 3 117a Includes malt. b Includes wheat flour. c Includes grains, oilseeds and pulses not separately listed. d Excludes cotton waste and linters. e Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. g Includes buffalo. h Includes dairy cattle and buffalo. i Includes meat and other live animals not listed separately. s ABARES estimate.Note: Zero is used to denote nil or less than $0.5 million.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resouces, Canberra

Industrial crops

19 Agricultural exports to Indonesia (fob) Australia

Dairy products

Horticulture


FarmCropsGrains



TABLE 20 Agricultural exports to Japan (fob) Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 s

Barley a $m 260 316 292 251 177 212Grain sorghum $m 105 219 202 16 2 1Wheat b $m 408 395 392 322 305 326

Canola $m 41 47 72 113 175 63Cottonseed $m 24 31 36 31 23 27Other grains and oilseeds c $m 4 9 17 10 6 5Pulses $m 10 12 10 11 8 10Total grains, oilseeds and pulses $m 853 1 030 1 021 754 697 643



Beef and veal $m 1 667 1 549 1 439 1 446 1 922 1 837Live feeder/slaughter cattle gh $m 16 20 15 15 14 15Lamb $m 60 63 54 76 88 71Mutton $m 26 24 17 29 27 36Other meat and live animals i $m 3 3 3 4 5 11Total meat and live animals $m 1 772 1 658 1 528 1 570 2 055 1 970

Greasy $m 9 12 8 1 0 0Semi-processed $m 23 26 21 10 14 20Skins $m 1 2 1 2 2 2Total wool $m 33 39 30 12 16 22

Butter $m 6 9 4 2 4 3Cheese $m 356 423 415 343 407 410Casein $m 22 21 17 20 5 5Skim milk powder $m 2 2 5 17 30 5Whole milk powder $m 0 1 0 0 0 0Other dairy products $m 38 46 68 39 33 39Total dairy products $m 424 502 509 421 481 462Other livestock products $m 337 302 293 276 293 359Total livestock and livestock products $m 2 567 2 501 2 360 2 279 2 845 2 813Total agricultural exports $m 3 901 4 024 3 832 3 521 3 951 4 007a Includes malt. b Includes the grain equivalent of wheat flour. c Includes grains and oilseeds not separately listed. d Excludes cotton waste and linters. e Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. g Excludes breeding stock and includes buffalo for feeder/slaughter purposes. h Excludes value of live feeder slaughter for October 2015. i Includes other meat and live animals not listed separately. s ABARES estimate.Note: Zero is used to denote nil or less than $0.5 million.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resources, Canberra

20 Agricultural exports to Japan (fob) Australia

Dairy products

Industrial crops

Horticulture


Wool

FarmGrains

Oilseeds




TABLE 21 Agricultural exports to the Republic of Korea (fob) Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 s

Barley a $m 75 94 87 116 116 95Wheat b $m 368 628 449 310 354 410Corn (maize) $m 4 12 20 23 22 13

Cottonseed $m 16 26 37 30 15 19Other grains and oilseeds c $m 1 0 2 6 2 4Pulses $m 51 36 74 57 68 17Total grains, oilseeds and pulses $m 514 797 668 541 577 558


Fruit $m 4 5 7 6 10 12Tree nuts $m 1 3 2 4 11 18Vegetables $m 8 9 7 5 9 17Other horticulture e $m 2 2 3 5 3 3Total horticulture $m 15 19 19 19 32 50Other crops and crop products $m 87 88 99 109 128 161Total crops $m 1 106 1 554 1 391 1 116 1 354 1 489

Beef and veal $m 656 572 641 844 1 016 1 213Lamb $m 13 15 14 24 32 49Mutton $m 5 4 4 6 7 9Other meat and live animals g $m 2 1 1 1 1 3Total meat and live animals $m 676 592 659 875 1 056 1 274Wool $m 36 43 44 61 81 128

Butter $m 16 9 7 6 10 14Cheese $m 37 31 30 26 32 39Casein $m 2 2 2 1 0 0Skim milk powder $m 23 23 19 27 25 14Whole milk powder $m 6 7 2 3 2 2Other dairy products $m 37 42 29 29 24 30Total dairy product $m 121 116 88 92 93 99Other livestock products $m 108 125 100 118 185 171Total livestock and livestock products $m 941 875 891 1145 1 415 1 671Total agricultural exports $m 2 047 2 429 2 282 2 261 2 769 3 159

Horticulture


a Includes malt. b Includes wheat flour. c Includes grains and oilseeds not separately listed. d Excludes cotton waste and linters. e Other horticulture includes mainly nursery, coffee, tea, spices, essential oils and other miscellaneous horticultural products. g Includes meat and other animals not listed separately. s ABARES estimate.Note: Zero is used to denote nil or less than $0.5 million. Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resources, Canberra

21 Agricultural exports to Republic of Korea (fob) Australia

Dairy products

Industrial crops

CropsGrains

Oilseeds

Farm


TABLE 22 Agricultural exports to the United States (fob) Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 s

Grains $m 0 0 1 2 0 0Oilseeds $m 0 20 50 66 22 1Pulses $m 4 5 4 5 4 5Total grains, oilseeds and pulses $m 4 25 55 73 26 6

Sugar $m 92 135 66 43 60 117Wine $m 524 493 483 472 463 477Total industrial crops $m 616 628 549 515 522 594

Fruit $m 33 33 25 31 24 34Tree nuts $m 12 15 28 48 65 82Vegetables $m 6 5 5 6 8 9Nursery $m 2 2 2 2 2 2Other horticulture a $m 16 15 19 28 37 44Total horticulture $m 69 69 79 115 136 171Other crops and crop products $m 168 142 191 258 246 258Total crops $m 857 864 873 962 931 1 030

Beef and veal $m 704 896 961 1 375 3 240 2 458Lamb $m 335 305 295 399 504 525Mutton $m 38 21 34 49 75 90Other meat and live animals b $m 0 0 0 0 1 0Total meat and live animals $m 1 077 1 222 1 290 1 823 3 820 3 073

Greasy $m 11 8 7 4 7 7Semi-processed $m 3 3 2 2 3 4Skins $m 0 0 0 0 0 naTotal wool $m 14 11 9 7 9 12

Butter $m 3 7 13 1 13 10Cheese $m 12 3 11 9 27 32Casein $m 13 7 9 4 1 1Whole milk powder $m 4 4 5 0 1 4Other dairy products $m 18 17 22 16 17 20Total dairy products $m 51 38 60 30 59 67Other livestock products $m 125 115 136 176 289 301Total livestock and livestock products $m 1 267 1 386 1 495 2 036 4 177 3 453Total agricultural exports $m 2 124 2 251 2 368 2 998 5 108 4 483a Other horticulture includes mainly coffee, tea, spices, essential oils and other miscellaneous horticultural products. b Includes meat and live animals not listed separately. s ABARES estimate.Note: Zero is used to denote nil or less than $0.5 million.Sources: ABARES; Australian Bureau of Statistics; Department of Agriculture and Water Resources, Canberra

22 Agricultural exports to the United States (fob) Australia

Dairy products

Industrial crops

Horticulture


Wool

CropsFarm



Fisheries exports

TABLE 23 Volume of fisheries products exports Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Live kt 0.9 0.9 0.8 0.9 0.8 0.8Tuna kt 7.8 8.9 8.9 11.0 12.1 13.8Salmonids kt 6.4 5.8 2.6 1.8 5.0 8.0Swordfish kt 0.4 0.5 0.5 0.4 0.5 0.6Whiting kt 1.8 0.9 0.4 0.1 0.0 0.0Other fish kt 5.5 5.1 4.7 4.4 5.3 19.2Total fish kt 22.7 22.0 17.8 18.6 23.6 42.4

Rock lobster kt 7.0 6.9 7.8 8.0 8.2 8.0Prawns kt 6.4 5.4 3.9 7.1 6.5 6.7Abalone kt 3.4 3.1 2.8 2.7 2.6 2.6Scallops kt 0.6 0.4 0.4 0.5 0.3 0.4Crabs kt 1.0 0.8 0.4 0.4 0.6 0.6Other crustaceans and molluscs kt 1.2 1.7 2.1 1.6 1.6 1.5Total crustaceans and molluscs kt 19.6 18.4 17.5 20.3 19.7 19.7Total edible fisheries products kt 42.4 40.5 35.3 38.9 43.3 62.1

Edible a

Crustaceans and molluscs

23 Volume of fisheries products exports Australia

a Includes prepared and preserved.Note: Zero is used to denote nil or less than 500 tonnes.Source: Australian Bureau of Statistics

Fish


Fisheries exports

TABLE 24 Value of fisheries products exports (fob) Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Live $m 33.4 32.0 30.7 34.2 29.9 30.2Tuna $m 131.4 162.7 162.6 135.5 151.0 163.3Salmonids $m 54.4 41.8 25.4 17.4 48.1 79.9Swordfish $m 4.5 4.2 3.9 3.9 4.4 6.9Whiting $m 5.0 2.5 1.4 0.2 0.1 0.0Other fish $m 58.1 46.2 34.2 34.2 37.7 74.3Total fish $m 286.8 289.4 258.2 225.4 271.2 354.6

Rock lobster $m 369.3 386.7 447.3 590.3 691.2 693.2Prawns $m 77.1 66.7 51.8 101.0 94.2 114.4Abalone $m 212.0 197.3 186.0 170.0 173.8 182.0Scallops $m 15.4 15.3 10.8 13.6 10.7 11.7Crabs $m 13.4 11.0 8.2 5.5 7.9 7.6Other crustaceans and molluscs $m 16.3 34.4 40.2 32.5 43.7 54.8Total crustaceans and molluscs $m 703.6 711.3 744.2 912.9 1 021.5 1 063.7Total edible fisheries products $m 990.3 1 000.7 1 002.3 1 138.3 1 292.7 1 418.3

Marine fats and oils $m 5.4 7.3 10.0 9.1 20.9 11.2Fish meal $m 1.6 0.4 1.0 0.7 1.0 0.5Pearls a $m 241.3 206.6 151.5 144.4 110.8 95.9Ornamental fish $m 2.3 2.3 3.8 2.0 1.9 2.1Other non-edible $m 7.3 9.4 6.5 9.7 12.3 13.8Total non-edible fisheries products $m 257.9 226.1 172.8 165.9 147.0 123.5Total fisheries products $m 1 248.2 1 226.8 1 175.2 1 304.3 1 439.6 1 541.8

24 Value of fisheries products exports (fob) Australia

Edible


Non-edible

a Includes items temporarily exported and re-imported.Source: Australian Bureau of Statistics

Fish


Fisheries imports

TABLE 25 Volume of fisheries products imports Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Tuna kt 45.6 40.8 46.9 50.1 49.2 44.9Salmonids kt 9.9 10.2 11.9 14.2 16.1 15.1Hake kt 6.7 5.3 6.1 4.5 4.9 5.1Swordfish kt 0.2 0.2 0.2 0.2 0.2 0.2Toothfish kt 0.1 0.1 0.2 0.2 0.1 0.2Herrings kt 1.0 0.9 1.8 0.9 1.1 2.2Shark kt 0.5 0.5 0.5 0.7 0.6 0.4Other fish kt 83.1 86.6 92.8 90.0 87.6 86.4Total fish b kt 147.1 144.4 160.5 160.8 159.8 154.5

Prawns kt 32.6 37.5 34.8 38.7 32.4 31.9Lobster kt 0.9 0.9 0.8 1.0 1.1 0.9Crabs kt 1.4 1.5 1.5 2.1 2.0 1.9Mussels kt 2.6 2.8 3.7 3.6 3.1 3.3Scallops kt 2.6 3.0 3.1 3.5 2.9 2.6Squid and octopus kt 15.2 17.0 19.9 23.2 22.3 23.4Other crustaceans and molluscs kt 9.4 7.3 4.1 4.8 4.0 4.2Total crustaceans and molluscs kt 64.7 69.8 67.9 76.7 67.8 68.3Total edible fisheries products abc kt 211.8 214.2 228.4 237.5 227.6 222.8

25 Volume of fisheries products imports Australia

Edible a


a Includes prepared and preserved. b Excludes live tonnage. c Includes other fisheries products not classified into fish or crustaceans and molluscs.Source: Australian Bureau of Statistics

Fish


Fisheries imports

TABLE 26 Value of fisheries products imports Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Tuna $m 200.8 205.5 258.2 296.1 283.9 274.8Salmonids $m 84.4 91.8 118.8 167.5 190.7 184.7Hake $m 27.2 20.9 23.4 19.5 21.8 23.6Swordfish $m 1.5 1.2 1.7 1.4 1.7 1.6Toothfish $m 1.4 1.3 2.2 3.0 3.5 8.2Herrings $m 4.3 4.2 5.1 4.5 3.9 5.7Shark $m 4.4 4.0 4.6 5.5 4.9 3.9Other fish $m 443.7 459.6 480.0 507.5 544.2 570.3Total fish b $m 769.1 788.6 866.5 1 004.9 1 054.6 1 072.7

Prawns $m 291.0 350.9 304.8 495.1 431.2 400.9Lobster $m 15.0 16.0 15.3 22.4 28.3 29.9Crabs $m 13.3 15.5 16.8 28.3 31.1 28.7Mussels $m 10.2 11.7 17.1 19.1 17.9 20.0Scallops $m 34.5 43.6 41.1 52.9 49.6 55.0Squid and octopus $m 74.3 90.4 97.7 114.5 111.6 134.8Other crustaceans and molluscs $m 65.3 57.0 40.7 44.0 42.9 50.7Total crustaceans and molluscs $m 503.5 585.1 533.4 776.3 712.5 720.0Total edible fisheries products abc $m 1 271.3 1 373.8 1 427.7 1 781.3 1 767.3 1 792.9

Pearls d $m 166.9 138.2 105.4 102.1 97.2 144.4Fish meal $m 46.7 34.2 43.3 43.2 64.3 61.7Ornamental fish $m 3.9 3.7 4.0 4.5 4.4 4.9Marine fats and oils $m 31.0 39.5 39.1 40.1 52.7 61.1Other marine products $m 9.9 17.1 29.0 30.4 22.2 21.3Total non-edible fisheries products $m 258.4 232.8 220.7 220.3 240.8 293.5Total fisheries products $m 1 529.7 1 606.6 1 648.4 2 001.6 2 008.1 2 086.4

26 Value of fisheries products imports Australia

Edible a


Non-edible

a Includes prepared and preserved. b Includes live value. c Includes other fisheries products not classified into fish or crustaceans and molluscs. d Mainly re-imports.Source: Australian Bureau of Statistics

Fish


Fisheries trade

TABLE 27 Value of Australian fisheries products trade, by selected countries Australia

STATISTICS

Trade unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Hong Kong $m 425.9 479.1 317.0 208.9 192.3 223.7Vietnam $m 8.4 60.5 293.2 565.6 715.6 681.7Japan $m 225.9 254.6 236.0 192.1 192.1 205.3China $m 143.2 58.5 45.2 36.6 48.7 104.6Singapore $m 41.2 42.5 31.0 34.2 35.0 35.3United States $m 35.7 23.1 17.9 22.1 28.0 44.8Taiwan $m 29.6 17.5 9.8 13.7 15.1 20.9Thailand $m 16.0 18.1 9.3 8.0 10.0 9.4New Zealand $m 9.6 10.1 9.1 14.5 13.9 19.9Malaysia $m 12.9 7.7 7.8 9.9 11.2 7.5Indonesia $m 8.7 6.1 7.4 9.9 9.3 10.0

Hong Kong $m 145.1 96.6 54.3 74.6 55.9 53.2Japan $m 43.3 44.4 33.0 26.9 23.4 24.0United States $m 8.1 22.2 21.0 19.2 16.6 21.6

Thailand $m 340.2 362.1 399.8 417.0 422.1 416.1New Zealand $m 210.0 197.3 206.3 206.8 189.6 199.8China $m 185.6 231.5 196.5 341.5 284.7 292.2Vietnam $m 161.7 174.5 163.1 231.7 233.1 243.0Malaysia $m 71.2 73.2 81.0 97.9 94.7 88.9United States $m 39.9 45.1 52.2 56.0 53.0 54.9Indonesia $m 27.9 36.3 50.9 73.5 85.6 89.5Taiwan $m 39.5 38.9 48.1 44.5 58.3 60.3South Africa $m 28.2 31.3 35.1 31.6 27.5 27.7Denmark $m 18.8 25.3 32.2 44.8 58.2 47.7Norway $m 24.7 27.1 29.9 45.4 68.1 66.8Other $m 33.1 32.2 36.2 50.5 53.0 66.5

27 Value of Australian fisheries products trade, by selected countries Australia

a Country details for non-edible imports are not available.Source: Australian Bureau of Statistics

Exports

Imports a

Edible (including live)

Non-edible

Edible (excluding live)


Forest exports

TABLE 28 Volume of forest products exports Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Roundwood ’000 m3 1 638 1 806 1 516 2 363 2 616 3 734

Softwood roughsawn ’000 m3 265 198 207 268 299 247 Softwood dressed ’000 m3 9 13 3 5 25 11 Hardwood roughsawn ’000 m3 39 26 20 73 117 19 Hardwood dressed ’000 m3 30 15 7 25 73 23 Total sawnwood ’000 m3 344 252 237 371 514 300Railway sleepers ’000 m3 8 8 8 17 14 7

Veneers ’000 m3 119 106 52 64 50 45 Plywood ’000 m3 7 18 36 36 14 31 Particleboard ’000 m3 6 4 2 6 11 11 Hardboard b ’000 m3 2 2 2 3 11 21 Medium-density fibreboard ’000 m3 115 79 52 75 78 85 Softboard and other fibreboards ’000 m3 5 5 1 1 21 4 Total wood-based panels ’000 m3 254 214 146 184 185 197

Newsprint kt 19 30 72 85 56 50 Printing and writing kt 84 132 139 153 141 139 Household and sanitary kt 39 26 12 20 23 17 Packaging and industrial kt 887 933 906 950 948 924 Total paper and paperboard kt 1 029 1 121 1 127 1 207 1 168 1 130Recovered paper kt 1 323 1 403 1 506 1 449 1 397 1 420Pulp kt 31 1 0 0 0 0Woodchips cde kt 5 064 4 150 3 806 4 776 5 707 6 082

Paper and paperboard

Volume

Sawnwood a

Wood-based panels

28 Volume of forest products exports Australia

a Excludes railway sleepers. b Uncoated hardboard confidential from January 2007. c Includes particles. d Bone dry tonnes. e Softwood woodchips are subject to ABS confidentiality restriction from March 2016 and are not included in these figures.Note: Components may not add to totals due to rounding. Zero is used to denote nil or less than 500 tonnes.Sources: ABARES; Australian Bureau of Statistics


Forest exports

TABLE 29 Value of forest products exports (fob) Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Roundwood $m 198 175 155 292 313 438

Softwood roughsawn $m 67 55 61 75 74 68 Softwoods dressed $m 5 3 2 3 11 7 Hardwood roughsawn $m 34 23 20 22 20 17 Hardwood dressed $m 10 7 6 7 5 11 Total sawnwood $m 115 88 90 108 110 103Railway sleepers $m 3 3 3 3 2 2Miscellaneous forest products a $m 60 59 61 71 75 110

Veneers $m 52 51 24 29 27 24 Plywood $m 2 2 4 3 3 4 Particleboard $m 2 1 1 1 2 2 Hardboard b $m 2 2 2 2 2 7 Medium-density fibreboard c $m 39 26 19 26 27 28 Softboard and other fibreboards $m 1 1 0 0 6 1 Total wood-based panels $m 98 83 51 62 67 66

Newsprint $m 13 15 36 59 39 33 Printing and writing $m 88 120 117 139 146 128 Household and sanitary $m 94 64 33 49 60 53 Packaging and industrial $m 552 518 526 605 657 683 Total paper and paperboard $m 747 717 712 853 901 898Paper manufactures d $m 112 134 132 132 109 102Recovered paper $m 240 240 230 241 241 249Pulp $m 11 1 0 0 0 0Woodchips $m 884 729 611 768 954 1 096Total wood products $m 2 469 2 229 2 044 2 529 2 772 3 063a Includes such items as wooden doors, mouldings, packing cases, parquetry flooring, builders carpentry, cork, gums, resins, eucalyptus and tea tree oils and other miscellaneous wood articles. Excludes wooden furniture. b Uncoated hardboard confidential from January 2007. c Some categories of medium-density fibreboard are confidential. d Includes other paper articles that have had some further processing. e Softwood woodchips are subject to ABS confidentiality restriction from March 2016 and are not included in these figures.Note: Components may not add to totals due to rounding. Zero is used to denote nil or less than $0.5 million.Sources: ABARES; Australian Bureau of Statistics

Value

Sawnwood


Wood-based panels

29 Value of forest products exports (fob) Australia


Forest imports

TABLE 30 Volume of forest products imports Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Roundwood ’000 m3 1 1 1 1 1 2

Softwood roughsawn ’000 m3 290 239 247 271 291 241 Softwood dressed ’000 m3 468 470 443 449 608 540 Hardwood roughsawn ’000 m3 43 46 41 41 43 39 Hardwood dressed ’000 m3 45 36 28 25 26 22 Total sawnwood ’000 m3 846 791 759 786 968 841

Veneers ’000 m3 17 15 13 9 12 14 Plywood ’000 m3 278 293 278 287 341 357 Particleboard ’000 m3 72 67 72 95 95 89 Hardboard ’000 m3 49 69 60 86 82 91 Medium-density fibreboard ’000 m3 58 91 77 65 85 89 Softboard and other fibreboards ’000 m3 7 7 6 5 7 7 Total wood-based panels ’000 m3 480 542 505 548 622 648

Newsprint kt 222 121 85 75 76 69 Printing and writing kt 1 237 1 174 1 155 1 172 1 040 960 Household and sanitary kt 114 118 159 123 142 155 Packaging and industrial kt 314 333 385 357 392 410 Total paper and paperboard kt 1 886 1 746 1 783 1 727 1 651 1 595Recovered paper kt 2 3 4 5 4 1Pulp kt 233 256 263 297 302 281Woodchips b kt 1 1 1 2 2 2

30 Volume of forest products imports Australia

Wood-based panels


Volume

a Excludes railway sleepers. b Bone dry tonnes.Sources: ABARES; Australian Bureau of Statistics

Sawnwood a


Forest imports

TABLE 31 Value of forest products imports Australia

STATISTICS

Commodity unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

Roundwood $m 1 1 1 1 1 2

Softwood roughsawn $m 135 105 100 111 128 112 Softwood dressed $m 248 248 246 281 382 361 Hardwood roughsawn $m 40 44 41 46 57 55 Hardwood dressed $m 50 51 35 31 34 28 Total sawnwood $m 473 448 423 468 601 555Miscellaneous forest products a $m 707 756 769 946 1 102 1 304

Veneers $m 21 21 19 15 22 24 Plywood $m 170 183 184 210 264 300 Particleboard $m 21 26 27 35 38 41 Hardboard $m 40 54 48 72 67 69 Medium-density fibreboard $m 34 36 32 35 45 51 Softboard and other fibreboards $m 3 3 2 3 3 4 Total wood-based panels $m 289 323 311 370 439 489

Newsprint $m 176 91 58 49 48 44 Printing and writing $m 1 347 1 217 1 151 1 194 1 123 1 036 Household and sanitary $m 185 187 244 208 254 305 Packaging and industrial $m 515 543 590 654 728 845 Total paper and paperboard $m 2 223 2 037 2 043 2 105 2 153 2 230Paper manufactures b $m 557 486 446 537 582 662Recovered paper $m 0 1 1 2 1 0Pulp $m 180 164 154 203 217 222Woodchips $m 2 2 3 3 3 4Total wood products $m 4 431 4 217 4 151 4 636 5 099 5 468

31 Value of forest products imports Australia

a Includes such items as wooden doors, mouldings, packing cases, parquetry flooring, builders carpentry, cork, gums, resins, eucalyptus oils and other miscellaneous wood articles. Excludes wooden furniture. b Includes other paper articles that have had some further processing.Note: Components may not add to totals due to rounding. Zero used to denote nil or less than $0.5 million.Sources: ABARES; Australian Bureau of Statistics

Value

Sawnwood

Wood-based panels



TABLE 32 Value of Australian forest products trade, by selected countries a

STATISTICS

Trade unit 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16

China $m 544 534 474 542 816 1 331Hong Kong $m 42 39 16 10 12 11Japan $m 745 579 394 21 316 427Korea, Rep. of $m 40 40 33 45 38 37Malaysia $m 106 112 73 87 70 71New Zealand $m 314 305 269 290 296 317Taiwan $m 79 68 68 57 73 110

China $m 690 800 913 1 110 1 321 1 497Finland $m 143 120 205 221 184 160Germany $m 183 148 135 163 150 156Indonesia $m 332 342 313 348 427 495Malaysia $m 228 236 227 249 270 306New Zealand $m 715 634 557 605 646 673United States $m 285 298 304 339 361 347

Exports

Imports

32 Value of Australian forest products trade, by selected countries a

a Value of wood products trade to selected countries may exclude data where ABS confidentiality restrictions apply.Sources: ABARES; Australian Bureau of Statistics

Forestry trade


ABARES reports released since Agricultural commodities (vol. 6 no. 3 September quarter 2016).This section provides an overview of the range of subjects covered by ABARES.

Full reports can be downloaded from agriculture.gov.au/abares/publications. For more information contact [email protected].

Research reports

Australian grains: financial performance of grain farms, 2013–14 to 2015–16

Research report 16.11

Publication date: 12 October 2016

This report presents the detailed financial performance of grain-producing farms and discusses recent farm financial performance and productivity in a historical context. The report draws on data from the ABARES annual Australian Agricultural and Grazing Industries Survey to provide an overview of production, financial performance and productivity growth in the Australian grains, oilseed and pulse industries.

Lessons from the water market: the southern Murray–Darling Basin water allocation market 2000–01 to 2015–16


Publication date: 2 December 2016

This report draws on historical data to analyse the major drivers of water allocation prices in the southern MDB. The study separates the effects of climate variability (rainfall, water storage and allocation volumes) from key policy changes (including Commonwealth purchase of entitlements for the environment) and irrigation sector changes that have occurred during the period.

Report extracts




Report extracts

Cost of production—Australian beef cattle and sheep producers, 2012–13 to 2014–15


Publication date: 12 October 2016

This report, funded by Meat & Livestock Australia, examines cost of production estimates for beef cattle and sheep producers. The report draws on data from the ABARES annual Australian Agricultural and Grazing Industries Survey (AAGIS). Since 1977–78 AAGIS has been providing government and industry stakeholders with important data for analysing and monitoring changes in Australia’s broadacre industries.

Australian honey bee industry: 2014–15 survey results


Publication date: 8 December 2016

This report draws on data from the ABARES Australian Honey Bee Industry Survey conducted in 2016, 2008 and 2002. The data enable government and industry stakeholders to evaluate changes in the status of Australian beekeeping businesses.

Technical reports

Fishery status reports 2016Publication date: 30 September 2016

This edition covers the biological and economic status of 93 fish stocks across 22 fisheries managed solely or jointly by the Australian Government. The reports summarise the performance of these fisheries against the requirements of fisheries legislation and policy.

The Australian Land Use and Management classification, version 8Publication date: 19 October 2016

This version of the Australian Land Use and Management (ALUM) classification system also includes fields to collect commodity and land management practice information. Under ALUM, primary, secondary and tertiary classes are broadly structured by their potential degree of modification and their impact on native land cover. This publication updates part 2 of the fourth edition of Guidelines for land use mapping in Australia: principles, procedures and definitions, published by ABARES in 2011.


Other reports

Shipping and handling costs for Australia’s wood product exports: data availability and methodological issuesPublication date: 27 September 2016

This report, commissioned by Forest and Wood Products Australia, examines the proportion of logs from Australia’s hardwood plantation estate that are expected to be exported as logs or woodchips. Export demand for these logs and the pressures this may place on port infrastructure highlight the value of cost competitiveness throughout Australia’s forest supply chain.

About my region—agriculture, fisheries and forestry, 2016Publication date: 29 September 2016

This update consists of a series of individual regional profiles of the agricultural, fisheries and forestry industries. Based on the regional boundaries set by the Australian Bureau of Statistics, each regional profile presents an overview of the agriculture, fisheries and forestry sectors in each region. It also covers recent financial performance of the broadacre and, where relevant, dairy and vegetable industries. These reports are released for the first time as a series of web pages.

Australian forest and wood products statistics: March and June quarters 2016Publication date: 3 November 2016

This issue presents updated 2014–15 data for key domestic indicators of forestry sector activity, including sales and service income and industry valued added. This issue includes interim estimates of the value and volume of logs harvested in 2015–16 as well as 2015–16 data for housing and other residential commencements, consumption and production of wood-based panel products and trade in wood products.

Australian water markets report 2014–15Publication date: 2 December 2016

This publication includes statistics on water access entitlement and water allocation trade, market performance (trade processing times), entitlements on issue and environmental water. Statistics for the southern Murray–Darling Basin are presented nationally and those for river systems outside the area are by state.

Australian crop reportPublication date: 6 December 2016

This quarterly report provides a consistent and regular assessment of crop prospects for major field crops, forecasts of area, yield and production and a state-by-state summary of seasonal conditions.

Report extracts


ABARES contacts

Executive Director (A/g) Peter Gooday [email protected] (02) 6272 2138

Agricultural Commodities and TradeAssistant Secretary and Chief Commodity Analyst (A/g) Trish Gleeson [email protected] (02) 6272 2030Agricultural Trade Caroline Gunning-Trant [email protected] (02) 6272 2123Agricultural Commodities Lisa McKelvie [email protected] (02) 6272 3009Regional Outlook Programmes and Stakeholder Engagement Peter Collins [email protected] (02) 6272 2017Climate Impact Sciences Matthew Miller [email protected] (02) 6272 3527

Agriculture Productivity and Farm Analysis Assistant Secretary (A/g) David Galeano [email protected] (02) 6272 2138Productivity Shiji Zhao [email protected] (02) 6272 2455Water and Climate Neal Hughes [email protected] (02) 6272 2066Farm Survey and Analysis Milly Lubulwa [email protected] (02) 6272 2069Invasives and Social Sciences Sandra Parsons [email protected] (02) 6272 4828

Fisheries, Forestry and Quantitative SciencesAssistant Secretary (A/g) Bertie Hennecke [email protected] (02) 6272 4277Domestic Fisheries and Marine Simon Nicol [email protected] (02) 6272 4638International Fisheries and Data James Larcombe [email protected] (02) 6272 3388Fisheries Economics Robert Curtotti [email protected] (02) 6272 2014Quantitative Sciences Tony Arthur [email protected] (02) 6272 2277Forest Sciences Steve Read [email protected] (02) 6272 5582Forestry Economics Beau Hug [email protected] (02) 6272 3929Land Use and Management Jane Stewart [email protected] (02) 6272 3541

Strategic Policy and BiosecurityAssistant Secretary (A/g) Alistair Davidson [email protected] (02) 6272 2091Regulatory Reform Unit and Corporate Performance Donna Hawkes [email protected] (02) 6272 4627Biosecurity Economics Jay Gomboso [email protected] (02) 6272 3381

Public Data TaskforceAssistant Secretary Julie Gaglia [email protected] (02) 6272 4298Agricultural Intelligence Transformation Project John Sims [email protected] (02) 6272 5732


























Executive Support and EventsAmelia Haddock [email protected] (02 6272 5329

Editing, Production, Online and Design John Wilson [email protected] (02) 6272 3811

Library Resources Karen Kidd [email protected] (02) 6272 4270

Media [email protected] (02) 6272 3232

Publication inquiries [email protected] (02) 6272 3933

ABARES contacts

Agricultural commodities: December quarter 2016 was designed and produced by the Department of Agriculture and Water Resources and the Agricultural Commodities team of ABARES. Editors: Jane Wiles, Julia Church and Emma Rossiter Designer: Greg Richardson






agriculture.gov.au/abares

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Postal address GPO Box 858 Canberra ACT 2601

Switchboard +61 2 6272 3933

Email [email protected]

Web agriculture.gov.au/abares

ABA

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The ‘Biosphere’ Graphic ElementThe biosphere is a key part of the department’s visual identity. Individual biospheres are used to visually describe the diverse nature of the work we do as a department, in Australia and internationally.

Also in this series• Agricultural commodities, September 2015• Agricultural commodities, December 2015• Agricultural commodities, March 2016• Agricultural commodities, June 2016• Agricultural commodities, September 2016




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