Queensland AgTrends 2016–17 - Publications · Queensland AgTrends 2016–17 Forecasts and trends in Queensland agricultural, fisheries and forestry production Department of Agriculture

Queensland AgTrends 2016–17Forecasts and trends in Queensland agricultural, fisheries and forestry production

Department of Agriculture and Fisheries

CS6186 12/16

Acknowledgements

The Department of Agriculture and Fisheries (DAF) acknowledges contributions to this report from:

• DAF researchers and industry experts

• the Office of Economic and Statistical Research (OESR)

• the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

• the Australian Bureau of Statistics (ABS)

• Meat and Livestock Australia (MLA)

• the United States Department of Agriculture (USDA)

• Avocados Australia

• industry representatives from Canegrowers, Cotton Australia, the Queensland Dairyfarmers’ Organisation, Growcom, Turf Queensland, Nursery and Garden Industry Queensland, the Flower Association of Queensland, the Australian Lot Feeders’ Association (ALFA), the Wool Production Forecast Committee, Queensland Sugar Limited and the Housing Industry Association (HIA)

• market commentators and industry media including ABC Rural, Queensland Country Life, Farmonline, Rabobank, IBISWorld, The Land and Beef Central.

© State of Queensland, Department of Agriculture and Fisheries, 2016.

The Queensland Government supports and encourages the dissemination and exchange of its information. The copyright in this publication is licensed under a Creative Commons Attribution 3.0 Australia (CC BY) licence.

Under this licence you are free, without having to seek our permission, to use this publication in accordance with the licence terms.

You must keep intact the copyright notice and attribute the State of Queensland, Department of Agriculture and Fisheries as the source of the publication.

Note: Some content in this publication may have different licence terms as indicated.

For more information on this licence, visit http://creativecommons.org/licenses/by/3.0/au/deed.en.

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Queensland AgTrends 2016–17 i

ContentsFigures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Summary of key findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Total value of Queensland’s primary industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Gross value of production (‘farm gate’) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Livestock industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

First-stage processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

This edition of Queensland AgTrends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Total value of Queensland’s primary industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Value of first-stage processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Lifestyle horticulture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Maps showing main production regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Comparisons with previous years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

About Queensland’s primary industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

About the department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Our vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Our objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Our purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Our values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Pursuing opportunities and managing risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

About Queensland AgTrends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9About the AgTrends update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Contact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Content and procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Climate outlook for November 2016 to March 2017 . . . . . . . . . . . . . . . . . . . . . . . 11

Drought situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

World and Australian economic environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Primary industries—estimates and forecasts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Volume of production index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Livestock disposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Cattle and calves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Poultry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Pigs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Sheep and lambs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Queensland AgTrends 2016–17 ii

Livestock products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Milk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Eggs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Wool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Horticulture crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Fruit and nuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Vegetables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Other vegetables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Lifestyle horticulture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Other crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Sugar cane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Cotton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Other major field crops . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45Peanuts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Sunflowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Sunflowers for the birdseed market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Summer cereal grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Grain sorghum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Maize . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Winter cereal grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Barley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Chickpeas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Fisheries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Forestry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

A note about forest industry data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Special feature: Meat consumption trends in Australia . . . . . . . . . . . . . . . . . . . . 57

Special feature: Queensland’s production nurseries . . . . . . . . . . . . . . . . . . . . . . 59

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Queensland AgTrends 2016–17 iii

Figures

Figure 1 Probability of exceeding median rainfall for November 2016 to March 2017 11

Figure 2 Drought-affected areas in Queensland, October 2016 12

Figure 3 The FAO food price index, 2013 to 2016 15

Figure 4 The FAO food price index, 1961 to 2016 15

Figure 5 FAO food commodity prices indexes, 2015–16 15

Figure 6 Queensland cattle and calf slaughterings, 2000–01 to 2015–16 22

Figure 7 Total cattle and calf numbers, Queensland and Australia, 2005 to 2014 23

Figure 8 Percentage share of total slaughter for cattle and calves and cows and heifers, Queensland, 2000–01 to 2015–16

23

Figure 9 Eastern Young Cattle Indicator (EYCI), 2010 to 2016 24

Figure 10 Australian exports of beef and veal, 2015–16 25

Figure 11 Queensland exports of beef and veal, 2015–16 26

Figure 12 Queensland cattle on feed and feedlot capacity, March 2010 to June 2016 27

Figure 13 Queensland live cattle exports, 1995–96 to 2015–16 27

Figure 14 Queensland live cattle exports by country of destination, 1995–96 to 2015–16

28

Figure 15 Queensland poultry meat production, 2007–08 to 2016–17 29

Figure 16 Queensland pig saleyard prices and slaughterings, 2007–08 to 2016–17 30

Figure 17 Queensland sheep and lamb saleyard prices and slaughterings, 2007–08 to 2016–17

31

Figure 18 GVP of eggs produced in Queensland, 2007–08 to 2016–17 33

Figure 19 EMI, 1 July 2011 to 27 May 2016 34

Figure 20 Stored volumes in major Queensland irrigation dams, September 2015 and 2016

43

Figure 21 Queensland fisheries total catch by major categories, 2010–11 to 2015–16 52

Figure 22 Queensland fisheries total catch by subcategories, 2010–11 to 2015–16 52

Figure 23 Queensland fisheries GVP by major categories, 2010–11 to 2015–16 53

Figure 24 Queensland fisheries GVP by subcategories, 2010–11 to 2015–16 53

Figure 25 Meat consumption in Australia, 1974 to 2016 57

Figure 26 World meat consumption, 2015–16 58

Figure 27 World seafood and other meat consumption, 2007 to 2014 58

Queensland AgTrends 2016–17 iv

TablesTable 1 Livestock disposals GVP, 2016–17 1

Table 2 Livestock products GVP, 2016–17 1

Table 3 Fruit and nuts and vegetables GVP, 2016–17 1

Table 4 Lifestyle horticulture GVP, 2016–17 2

Table 5 Other crops GVP, 2016–17 2

Table 6 Cereal grains GVP, 2016–17 2

Table 7 Forecast value of first-stage processing, 2016–17 3

Table 8 IMF World Economic Outlook projections 13−14

Table 9 GVP, first-stage processing and total primary industries estimates and 17−19 forecasts, 2013–14 to 2016–17, and difference between 2016–17 forecast and average for past 5 years

Table 10 Volume of production index for Queensland’s major agricultural commodities 20

Table 11 Production nurseries GVP by sector, 2016–17 40

Table 12 World production of cotton, 2015–16 and 2016–17 44

Queensland AgTrends 2016–17 v

AcronymsABARES Australian Bureau of Agricultural and Resource Economics and Sciences

ABS Australian Bureau of Statistics

ALFA Australian Lot Feeders’ Association

ANZSIC Australian and New Zealand Standard Industrial Classification

BRICS Brazil, Russia, India, China and South Africa

CCS commercial cane sugar

DAF Department of Agriculture and Fisheries

DPI Department of Primary Industries

DSITI Department of Science, Information Technology and Innovation

EMI Eastern Market Indicator

ENSO El Niño – Southern Oscillation

EYCI Eastern Young Cattle Indicator

FAO Food and Agriculture Organization

GDP gross domestic product

GVP gross value of production

HIA Housing Industry Association

IDP individually droughted property

IMF International Monetary Fund

IPS international polarity scale

MLA Meat and Livestock Australia

OECD Organisation for Economic Co-operation and Development

OESR Office of Economic and Statistical Research

SA2 statistical area level 2

SST sea surface temperature

USDA United States Department of Agriculture

Queensland AgTrends 2016–17 1

Summary of key findings

Total value of Queensland’s primary industriesFor 2016–17, the total value of Queensland’s primary industry commodities (combined gross value of production and first-stage processing) is forecast to be $18.55 billion, 6 per cent greater than 2015–16 and 15 per cent greater than the average for the past 5 years.

Gross value of production (‘farm gate’)For 2016–17, the gross value of production (GVP) of Queensland’s primary industry commodities at the ‘farm gate’ is forecast to be almost $14.55 billion, 6 per cent greater than 2015–16 and 14 per cent greater than the average for the past 5 years.

Livestock industriesThe 2016–17 GVP forecasts for livestock industries are shown in Tables 1 and 2.

Table 1 Livestock disposals GVP, 2016–17

Industry Forecast GVP ($m) Percentage change since 2015–16

Cattle and calves 4060 –6

Poultry 619 1

Pigs 333 6

Sheep and lambs 62 –10

Other livestock 40 –7

Table 2 Livestock products GVP, 2016–17


Milk (all purpose) 233 5

Eggs 217 6

Wool 56 2

CropsThe 2016–17 GVP forecasts for crops are shown in Tables 3–6.

Table 3 Fruit and nuts and vegetables GVP, 2016–17


Fruit and nuts 1784 8

Vegetables 1260 3


Table 4 Lifestyle horticulture GVP, 2016–17


Nurseries 898 0

Turf 185 6

Cut flowers 156 3

Table 5 Other crops GVP, 2016–17


Sugar cane 1420 24

Cotton 870 63

Table 6 Cereal grains GVP, 2016–17


Chickpeas 793 68

Wheat 360 –12

Sorghum 257 –18

Other cereal grains 127 –12

Barley 70 –24

Maize 64 7

FisheriesThe GVP for Queensland’s fisheries in 2016–17 is forecast to be $379 million.

In this edition, recreational fishing, which is an important part of Queensland’s fisheries, is included in the forecast for 2016–17 with an estimated value of $94 million. The values of commercial fishing and aquaculture are forecast to be $170 million (2 per cent less than 2015–16) and $115 million (a 4 per cent increase from 2015–16), respectively.

ForestryThe GVP for the forest-growing sector of Queensland’s forest industry in 2016–17 is forecast to be $260 million, 7 per cent greater than last year. This translates into a value of $536 million for the first-stage processing sector.

First-stage processingFor 2016–17, the value of first-stage processing (or value-added production) is forecast to be nearly $4 billion.


Table 7 Forecast value of first-stage processing, 2016–17

Industry Forecast ($m)

Meat processing 1961

Sugar processing 830

Log sawmilling, timber dressing and plywood and veneer manufacturing 536

Fruit and vegetables processing 256

Flour mill and feed processing 130

Milk and cream processing 123

Cotton ginning 99

Seafood processing 57

Total 3992


This edition of Queensland AgTrends In 2012, Queensland AgTrends replaced Prospects for Queensland’s primary industries (launched in 2001) as the authoritative source of statistics, analyses and forecasts for Queensland’s agricultural, fisheries and forestry production. The most recent changes in methodology used in these publications are outlined below.

Total value of Queensland’s primary industriesBefore September 2007, the measure used to value Queensland’s primary industry commodities in Prospects was gross value of production (GVP). From September 2007 onwards, the total value of Queensland’s primary industry commodities reported in Prospects and then AgTrends comprised two components, which are reported separately. These components are a GVP figure for unprocessed primary commodities, and a value of first-stage processing for the commodities in the list below.

Value of first-stage processingFirst-stage processing forecasts for the current year and estimates for previous years are provided for:

• meat processing

• sugar processing

• milk and cream processing

• fruit and vegetables processing

• flour mill and feed processing

• seafood processing

• log sawmilling, timber dressing and plywood and veneer manufacturing

• cotton ginning.

In this edition of AgTrends, estimates of major primary industry processing activity are based on a methodology derived from the 2006–07 Australian Bureau of Statistics (ABS) manufacturing survey and census statistics released in April 2009.

The methodology assumes a constant ratio of farm output to processing output and a constant ratio of processing output to value added by the processing industry. Editions before 2010–11 used the methodology derived from the Queensland 2000–01 manufacturing survey. Therefore, the first-stage processing forecasts for 2016–17 should not be compared with the estimates for years before 2010–11.

Lifestyle horticultureIn September 2008, the then Department of Primary Industries (DPI) commissioned Queensland Treasury’s Office of Economic and Statistical Research (OESR) to undertake a comprehensive, statewide telephone survey to determine the economic value of the lifestyle horticulture industry. Lifestyle horticulture had changed significantly since a previous comprehensive survey in 2001. Now the Department of Agriculture and Fisheries (DAF) uses a new benchmark to improve our understanding of the scope and economic contribution of this important industry.

In Table 9, pages 17–19, the value of the industry is captured under ‘lifestyle horticulture production’ and includes the GVP of nurseries, cut flowers and turf.


ForestryIn Table 9, pages 17–19, the value of Queensland’s forestry industry has two components:

• the gross value of the log timber produced from Queensland’s plantations and native forests before it reaches a sawmill or primary timber processing plant

• the value-added component, which includes log sawmilling, timber dressing, and plywood and veneer manufacturing.

Maps showing main production regionsFor livestock, horticulture and crops, maps are included to show indicative production areas for individual commodities. The maps are based on ABS 2010–11 agricultural census data. They show statistical areas level 2 (SA2s) in Queensland where the majority of production of each commodity is concentrated.

Comparisons with previous yearsFrom 2005–06, the ABS used a new methodology for gathering agricultural data. The ABS’s final GVP estimates for 2014–15, released in March 2016, are included in Table 9 (pages 17–19). Due to this break in the series, the ABS advises that figures from 2005–06 onwards should not be compared to those for previous years.


About Queensland’s primary industriesIn 2014–15, Queensland’s primary industries directly contributed an estimated $7.2 billion to the state economy—this was 2.5 per cent of the gross state product.1

Geographically, Queensland is Australia’s second largest state, covering more than 173 million hectares. Almost 144 million hectares (or 83 per cent) of the land area is used for agriculture. Queensland has the largest area of agricultural land of any Australian state and the highest proportion of land area in Australia dedicated to agriculture.

In 2014–15, Queensland exported $9.2 billion worth of agriculture and food products. Exports of these primary products comprised 20 per cent of the state’s overseas commodity exports in 2014–15.2

In 2013–14, the combined employment associated with the whole food supply chain equated to an estimated 282 000 employees. This means that one in seven Queenslanders was either partly or entirely supported by the food sector.3

1 ABS 2015, Australian national accounts: state accounts, 2014–15, cat. no. 5220.0.

2 ABS 2015, Exports from Queensland and Australia to all countries, by commodity, value, 2014–15; OESR 2015, Standard international trade classification 2 digit, food and live animals.

3 ibid.


About the department

Our visionProductive and profitable agriculture, fishing and forestry sectors

We strive to be:

• a respected collaborator and connector across government, industry and research bodies

• an outcomes-based regulator

• a high-performing customer-focused organisation.

Our objectives• Create the conditions for successful agribusinesses and supply chains which encourage

innovation and productivity.

• Assist people in agribusinesses to respond to challenges and protect environmental values.

• Ensure the sustainable management of natural resources to underpin productivity and protect the environment.

Our purposePromote a sustainable and innovative agriculture, fisheries and forestry sector which adds value to the economy and community.

Our valuesAs individuals and as a department we embed the Queensland Public Service core values in the way we do business:

• Customers first—We know our customers, deliver what matters to Queenslanders and show empathy in decision-making.

• Ideas into action—We challenge the norm, encourage and embrace new ideas, find new solutions and work across boundaries.

• Unleash potential—We expect greatness, lead our colleagues and set clear expectations, and seek, provide and act on feedback.

• Be courageous—We own our actions, both successes and mistakes, take calculated risks and act with transparency.

• Empower people—We lead, empower and trust, playing to everyone’s strengths by developing ourselves and those around us.

Pursuing opportunities and managing risks• Economic, social and environmental change—Source the best available information and data

to provide timely responses to emerging opportunities and challenges to help our industries adapt and grow.

• Innovation—Exploit new technologies and empower our people and partners to try new approaches.


• Return to investment—Partner with like-minded organisations and investors to realise opportunities sooner.

• Governance systems—Adopt contemporary practices and monitor performance to ensure systems are effective.

• Major climatic events and biosecurity threats—Prepare for events and respond to the loss of continuity and fatigue that results when these events occur.

• Skills and capability—Ensure we can access the skills and capability to support current and future organisational functions.

• Business-critical systems—Address our technology infrastructure and processes to achieve business efficiency, digital service delivery and information sharing with service partners.

• Relationships with stakeholders and the community—Inclusively develop policy and manage expectations and issues with respect.


About Queensland AgTrendsQueensland AgTrends has a circulation of approximately 2000, with copies distributed to members of parliament, industry associations, agribusinesses, banks, law firms, local governments, government departments, educational institutions, primary producers and other businesses along the value chain.

This edition of AgTrends contains:

• initial GVP forecasts for 2016–17

• initial forecasts for 2016–17 for first-stage processing

• GVP estimates for 2015–16

• the percentage difference between each 2016–17 forecast and the average for the past 5 years.

AgTrends is available on the DAF website (www.daf.qld.gov.au).

About the AgTrends update The forecasts provided in this edition will be updated in April 2017. Updated forecasts will be made available electronically and can be downloaded from www.daf.qld.gov.au. This is in line with our commitment to upgrade the DAF information technology platform to make services integrated, modern and user-friendly.

ContactWe welcome your feedback. Please send your comments and suggestions to us at:

AgTrends Industry Analysis Unit Department of Agriculture and Fisheries GPO Box 46 BRISBANE QLD 4001

Visit www.daf.qld.gov.au to view current and previous editions of AgTrends and AgTrends update.

Content and procedureIn AgTrends, GVP refers to the output of primary industry operations. Most non-commercial activities, such as home vegetable and flower gardening and hobbyist beekeeping, are not included due to a lack of data. This in no way diminishes the importance of these activities to the economy and society. Recreational fishing is included, but at a conservative valuation.

Gross values of commodities produced are calculated by multiplying the output from each primary industry activity by the average wholesale market price paid to producers.

Estimates of major primary industry processing activity used in this edition of AgTrends are based on a methodology derived from the 2006–07 ABS manufacturing survey and census statistics released in April 2009. The methodology assumes a constant ratio of farm output to processing output and a constant ratio of processing output to value added by the processing industry.

http://www.daf.qld.gov.au







Editions before 2010–11 used the methodology derived from the Queensland 2000–01 manufacturing survey. Therefore, the first-stage processing forecasts from 2010–11 onwards should not be compared with the estimates for previous years.

Value added refers to the additional value created at a particular stage of production. Value-adding that occurs beyond the first round is not included in this analysis. Note that for some industries, there are a significant number of rounds of processing and value-adding beyond the first round. For instance, timber is processed in numerous downstream industries, including wooden structural component, pulp, paper and paperboard, and paper product processing.

Economists use the value-added method as a way of avoiding double-counting. The sum of the value added in each of the different stages of production equals the value of the final product. Final products include consumer goods and fixed capital equipment. In a microeconomic context, value added is simply measured as the value of the output produced minus the costs of the intermediate inputs.

The estimates and forecasts contained in this edition of AgTrends were based on information available in August, September and October 2016, and followed consultation with experts from industry and DAF.

The prices of all overseas-traded commodities are responsive to changes in the exchange rate of the Australian dollar relative to the currencies of our trading partners. Prices paid to primary producers, and therefore gross unit values, could change depending on whether exchange rates increase or decrease.


Climate outlook for November 2016 to March 2017The Science Delivery Division of the Department of Science, Information Technology and Innovation (DSITI) considers that, for most of Queensland, the probability of exceeding median summer rainfall (November 2016 to March 2017) is currently higher than normal.

DSITI’s seasonal outlooks for Queensland are based on the current and projected state of the El Niño – Southern Oscillation (ENSO) phenomenon and on factors that alter the impact of ENSO on Queensland rainfall, such as the more slowly changing extra-tropical sea surface temperature (SST) pattern in the Pacific Ocean.

Figure 1 Probability of exceeding median rainfall for November 2016 to March 2017

Source: The Science Delivery Division, DSITI, 2016.

10–20%

20–30%

30–40%

40–50%

50–60%

60–70%

70–80%

80–90%

90–100%

0–10%


Drought situationCurrently, 84 per cent of Queensland remains drought-declared under state government processes (see Figure 2). However, rainfall totals across much of Queensland were extremely high over winter, with many areas receiving more than 50 millimetres.

Figure 2 Drought-affected areas in Queensland, October 2016

Drought-declared

Partly drought-declared

>40% IDPs

20–40% IDPs

10–20% IDPs

<10% IDPs

(IDPs = individually droughted properties)


World and Australian economic environmentThe latest World Economic Outlook report4 from the International Monetary Fund (IMF) forecasts subdued economic growth for 2016, followed by a gradual acceleration (Table 8). Major issues impacting the world economy include Brexit, realignment in China, commodity exporters facing a declining terms of trade, broad demographic and productivity trends, and geopolitical developments.

Forecasts were changed from those made in July 2016, mainly in reducing United States growth and in the expectation that recession may be easing in Russia and Brazil. Although the effect of Brexit has been mitigated by the devaluation of the British pound so far, banks remain under pressure worldwide. China’s near-term prospects have improved, and the focus of growth is expected to remain the emerging market and developing economies.

Table 8 IMF World Economic Outlook projections

Year-on-year percentage change Difference from July 2016 updatea

Actual Projection

2015 2016 2017 2016 2017

World output 3 .2 3 .1 3 .4 0 .0 0 .0

Advanced economies 2 .1 1 .6 1 .8 –0 .2 0 .0

United States 2 .6 1 .6 2 .2 –0 .6 –0 .3

Euro area 2 .0 1 .7 1 .5 0 .1 0 .1

Japan 0 .5 0 .5 0 .6 0 .2 0 .5

United Kingdom 2 .2 1 .8 1 .1 0 .1 –0 .2

Canada 1 .1 1 .2 1 .9 –0 .2 –0 .2

Other advanced economiesb 2 .0 2 .0 2 .3 0 .0 0 .0

Australia 2 .4 2 .9 2 .7 — —

Emerging market and developing economies

4 .0 4 .2 4 .6 0 .1 0 .0

Commonwealth of Independent States

–2 .8 –0 .3 1 .4 0 .3 –0 .1

Russia –3 .7 –0 .8 1 .1 0 .4 0 .1

Emerging and developing Asia 6 .6 6 .5 6 .3 0 .1 0 .0

China 6 .9 6 .6 6 .2 0 .0 0 .0

Indiac 7 .6 7 .6 7 .6 0 .2 0 .2

ASEAN 5d 4 .8 4 .8 5 .1 0 .0 0 .0

Emerging and developing Europe

3 .6 3 .3 3 .1 –0 .2 –0 .1

Latin America and the Caribbean

0 .0 –0 .6 1 .6 –0 .2 0 .0

Brazil –3 .8 –3 .3 0 .5 0 .0 0 .0

Middle East, North Africa, Afghanistan and Pakistan

2 .3 3 .4 3 .4 0 .0 0 .1

Sub-Saharan Africa 3 .4 1 .4 2 .9 –0 .2 –0 .4

4 IMF 2016, World Economic Outlook, <http://www.imf.org/external/pubs/ft/weo/2016/02>.

Continued

http://www.imf.org/external/pubs/ft/weo/2016/02


Year-on-year percentage change Difference from July 2016 updatea

Actual Projection

2015 2016 2017 2016 2017

World trade volume (goods and services)

2 .6 2 .3 3 .8 –0 .4 –0 .1

Imports

Advanced economies 4 .2 2 .4 3 .9 –0 .4 –0 .3


–0 .6 2 .3 4 .1 –0 .4 0 .0

Exports

Advanced economies 3 .6 1 .8 3 .5 –0 .5 –0 .1


1 .3 2 .9 3 .6 –0 .2 –0 .2

Commodity prices (US dollars)

Oil –47 .2 –15 .4 17 .9 0 .1 1 .5

Non-fuel (average based on world commodity export weights)

–17 .5 –2 .7 0 .9 1 .1 1 .5

a Difference based on rounded figures for the current and July 2016 World Economic Outlook forecasts.

b Excludes the G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States) and euro area countries.

c For India, data and forecasts are presented on a fiscal-year basis and gross domestic product (GDP) from 2011 onward is based on GDP at market prices with fiscal year 2011–12 as a base year.

d Indonesia, Malaysia, Philippines, Thailand, Vietnam.

As institutional rigidity and demographic reality handicap the old growth model, overdue reforms raise doubts about China’s long-term capacity as a prime mover of the world economy.5 The working-age population is now shrinking and the dependency ratio is rising, along with wage pressures and the need for a pension system. Discrepancies between official statistics and other evidence of debt and economic growth indicate systemic problems.6

The United Nations Food and Agriculture Organization (FAO) predicts that, despite the uptick in 2016 (Figure 3), global food prices are returning to the long-run declining trend in real terms after the period of growth from 2008 to 2012 (Figure 4).7 This has negative implications for the reduction of rural poverty in developing countries because it will result in declining farm incomes. Among the individual commodities (Figure 5), sugar showed a spectacular price rise (after a similar decline in the previous year) on expectations of a global shortfall and the appreciation of the Brazilian real. Dairy appears to be recovering from the price slump earlier in 2016, and cereals show the beginning of what may turn out to be a decline. Meanwhile, vegetable oils have been rising through the financial year 2015–16, and meat has returned to its starting level. Despite the price volatility, agriculture’s global terms of trade are favourably impacted by continuing low crude-oil prices and those of other non-agricultural commodities used as inputs or in the making of inputs.

5 Institute of World Economics and Politics, Chinese Academy of Social Sciences 2016, China and World Economy, vol. 24, no. 5, <http://onlinelibrary.wiley.com/doi/10.1111/cwe.2016.24.issue-5/issuetoc>.

6 Business Insider Australia 2016, Chinese economic data has a growing credibility problem, <http://www.businessinsider.com.au/chinese-economic-data-has-a-growing-credibility-problem-2016-1>.

7 OECD & FAO 2016, OECD–FAO Agricultural outlook 2016–2025, <http://www.fao.org/3/a-i5778e.pdf>.

Table 8 continued

http://onlinelibrary.wiley.com/doi/10.1111/cwe.2016.24.issue-5/issuetoc

http://www.businessinsider.com.au/chinese-economic-data-has-a-growing-credibility-problem-2016-1

http://www.businessinsider.com.au/chinese-economic-data-has-a-growing-credibility-problem-2016-1

http://www.fao.org/3/a-i5778e.pdf


140

160

J F M A M J J A S O N D

180

200

220

2002–2004 = 100

2013

2014

2015 2016

Figure 3 The FAO food price index, 2013 to 2016

0

50

1961 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2016

100

150

200

250

2002–2004 = 100

*The real price index is the nominal price index deflated by the World Bank Manufactures Unit Value Index

Nominal

Real*

Figure 4 The FAO food price index, 1961 to 2016

120

155

A S O N D J F M A M J J A

210

255

300

2002–2004 = 100

Sugar

Vegetableoils

Dairy

Meat

Cereals

2015 2016

Figure 5 FAO food commodity price indexes, 2015–16


The Organisation for Economic Co-operation and Development (OECD) is more bullish than the IMF about Australia’s growth prospects, forecasting it to gradually speed up to reach 3 per cent8 in 2017. While acknowledging Australia’s success in rebalancing after the commodity boom, the OECD stresses the need to improve productivity through innovation and the adoption of new technologies, and by improving the taxation system through favouring more efficient types of taxes. Exposure to China and tensions in the housing market are seen as risks, whereas strong household demand and the depreciated exchange rate are among the positive factors expected to drive further employment growth.

8 OECD 2016, OECD Economic Outlook, vol. 2016, no. 1, <http://www.oecd-ilibrary.org/docserver/download/1216021e.pdf?expires=1475729906&id=id&accname=ocid53028540&checksum=45C1FF4C726C96C218B3024CB61AC3D7>.

http://www.oecd-ilibrary.org/docserver/download/1216021e.pdf?expires=1475729906&id=id&accname=ocid53028540&checksum=45C1FF4C726C96C218B3024CB61AC3D7

http://www.oecd-ilibrary.org/docserver/download/1216021e.pdf?expires=1475729906&id=id&accname=ocid53028540&checksum=45C1FF4C726C96C218B3024CB61AC3D7


Primary industries—estimates and forecasts

Table 9 GVP, first-stage processing and total primary industries estimates and forecasts, 2013–14 to 2016–17, and difference between 2016–17 forecast and average for past 5 years

2013–14b 2014–15c 2015–16 forecast,

April 2016d

2016–17 forecast, October

2016d

Change from April forecast

for 2015–16 to October forecast for

2016–17

Average for past 5 years

Difference between 2016–17

forecast and average for past 5 years

Commodity GVPa ($m) ($m) ($m) ($m) (%) ($m) (%)

Livestock disposals

Cattle and calves 3 890 5 076 4 312 4 060 –6 3 995 2

Poultry 494 588 610 619 1 512 21

Pigs 262 270 315 333 6 253 32

Sheep and lambs 61 66 69 62 –10 60 3

Other livestock 43 44 43 40 –7 40 0

Total livestock disposals 4 750 6 044 5 349 5 114 –4 4 860 5

Livestock products

Milk (all purpose) 231 235 222 233 5 235 –1

Eggs 188 202 204 217 6 188 16

Wool 80 61 55 56 2 83 –33

Total livestock productse 501 498 481 506 5 498 2

Total livestock 5 251 6 542 5 830 5 620 –4 5 358 5

Horticulture

Fruit and nuts

Bananas 570 538 580 584 1 521 12

Other fruit and nuts 232 224 248 268 8 199 34

Avocados 167 148 151 225 49 150 50

Strawberries 170 203 180 144 –20 166 –13

Macadamias 54 76 120 140 17 71 97

Mandarins 77 86 94 122 30 78 56

Mangoes 77 58 75 92 23 66 39

Apples 77 58 82 82 0 60 37

Pineapples 73 53 71 74 4 70 6

Table grapes 50 52 53 53 0 45 19

Total fruit and nuts 1 547 1 496 1 654 1 784 8 1 426 25

Continued


2013–14b 2014–15c 2015–16 forecast,

April 2016d


2016d



2016–17





Vegetables

Tomatoes 291 273 294 298 1 273 9

Other vegetables 236 201 217 221 2 227 –3

Capsicums and chillies 155 153 142 154 8 146 6

Beans 79 88 79 85 8 88 –3

Mushrooms 64 70 70 70 0 61 15

Sweet potatoes 52 52 62 64 3 55 17

Lettuce 54 54 54 56 4 57 –2

Potatoes 54 63 53 52 –2 57 –9

Melons (rock melon and cantaloupe)

36 42 55 50 –9 40 26

Sweet corn 38 39 45 50 11 39 29

Zucchinis and button squash 47 46 41 42 2 44 –4

Pumpkin 22 26 33 34 3 25 38

Melons (watermelon) 33 36 33 31 –6 35 –11

Carrots 18 17 25 27 8 22 25

Onions 25 28 25 26 4 25 3

Total vegetables 1 204 1 188 1 228 1 260 3 1 193 6

Total fruit and nuts and vegetables

2 751 2 684 2 882 3 044 6 2 598 17

Lifestyle horticulture production

Nurseriesk 867 880 898 898 0 876 3

Turfk 140 160 175 185 6 145 28

Cut flowersk 151 151 151 156 3 151 3

Total lifestyle horticulture production

1 158 1 191 1 224 1 239 1 1 172 6

Total horticulture 3 909 3 875 4 106 4 283 4 3 770 14

Other field crops

Sugar canef 1 165 1 239 1 141 1 420 24 1 139 25

Cotton (raw)g 698 383 535 870 63 655 33

Other cropsc 55 65 59 52 –13 53 –2

Total other crops 1 918 1 687 1 735 2 342 35 1 847 27

Cereal grains

Chickpeas 100 117 471 793 68 180 339

Wheat 339 329 410 360 –12 401 –10

Grain sorghum 261 486 312 257 –18 340 –24

Other cereal grains 96 129 145 127 –12 106 20

Barley 50 79 92 70 –24 62 14

Maize 44 63 60 64 7 54 19

Total cereal grains 890 1 203 1 490 1 671 12 1 141 46

Total crops 6 717 6 766 7 331 8 295 13 6 758 23

Total agriculture 11 968 13 308 13 161 13 915 6 12 174 14

Table 9 continued

Continued


2013–14b 2014–15c 2015–16 forecast,

April 2016d


2016d



2016–17





Fisheriesc, h, i

Commercial fishing

Crustaceans 121 116 104 102 –2 113 –10

Finfish 65 62 65 64 –2 66 –4

Molluscs 6 5 4 4 –3 7 –47

Total commercial fishing 192 182 173 170 –2 186 –9

Recreational fishing 73 94 94 94 0 81 15

Aquaculture 101 103 111 115 4 102 13

Total fisheries 366 379 378 379 0 369 3

Forestry and loggingc, j 175 187 243 260 7 189 38

Total primary industries (farm gate)

12 509 13 874 13 783 14 554 6 12 732 14

First-stage processing value addedk

Meat processingc 1 822 2 318 2 052 1 961 –4 1 882 4

Sugar processingc 634 655 533 830 56 620 34

Log sawmilling, timber dressing and plywood and veneer manufacturingc

361 386 501 536 7 389 38

Fruit and vegetables processingc

231 226 242 256 6 218 17

Flour mill and feed processingc 69 93 116 130 12 89 46

Milk and cream processingc 122 124 117 123 5 126 –2

Cotton ginningc 80 44 61 99 63 75 33

Seafood processingc 55 57 57 57 0 56 3

Total primary industries (first-stage processing)

3 374 3 902 3 679 3 992 9 3 455 16

Total primary industries 15 883 17 776 17 461 18 546 6 16 187 15

a GVP (gross value of production) is defined as the gross value of commodities produced. It is a measure of economic output. In this

publication, GVP relates to the output of primary industry commercial operations only. The GVP is the value of recorded production at

wholesale prices realised in the marketplace (e.g. cattle sold at saleyards, sugar cane at the mill door, fruit and vegetables at the wholesale

market). It is derived by multiplying the output from each primary industry by the average wholesale price paid to producers.

b ABS final estimates for 2013–14 unless otherwise indicated.

c ABS final estimates for 2014–15 unless otherwise indicated.

d DAF forecasts.

e Excludes minor commodities such as honey, beeswax and mohair.

f Gross value of sugar cane at mill door.

g Includes value of cottonseed and lint.

h Includes catches from both Commonwealth-managed fisheries (including Torres Strait, Gulf of Carpentaria and East Coast Tuna fisheries)

and state-managed fisheries.

i Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimates.

j See page 61 for the definition of value added. The forecasts for the value of first-stage processing in 2009–10 and beyond should not be

compared with the previous years due to the change in value-added ratios.

k The value of the lifestyle horticulture sector has been calculated on a gross-turnover basis rather than a value-added basis and therefore

will contain some double counting.

l Revised GVP data from DAF’s Fisheries group required amendment of previous estimates.

Table 9 continued


Volume of production indexA volume of production index describes the movement in production over a period of time relative to a base period. The volume of production index for each of Queensland’s major agricultural commodities from 2006–07 to 2016–17 is detailed in Table 10.

The index for agriculture for 2016–17 is forecast to be 116. This indicates that Queensland’s agricultural production in 2016–17 is forecast to be 16 per cent higher (on average) than in the base year of 1996–97. On average, the volume of agricultural production in 2016–17 is forecast to be 1 per cent lower than in 2015–16.

Table 10 Volume of production indexa for Queensland’s major agricultural commodities

Commodity 2006–07 2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 (forecast)

2016–17 (forecast)

Wheat 39 48 102 68 77 95 82 52 50 53 74

Grain sorghum 89 251 176 92 118 141 147 86 161 140 114

Barley 18 33 40 26 34 45 40 42 59 47 76

Major cereal grains

51 102 117 73 84 104 96 62 83 78 88

Sugar cane 91 86 82 81 65 67 72 80 85 87 91

Cotton lint 42 26 93 84 211 187 189 190 98 118 192

Major other field crops

78 71 84 81 100 97 100 106 87 94 115

Major fruit 167 148 161 176 125 166 178 164 225 225 220

Major vegetables

122 110 113 109 111 137 103 75 123 154 144

Major fruit and vegetables

145 129 138 144 118 152 142 121 145 190 183

Crops 85 90 103 92 100 110 108 98 98 110 122

Cattle, calves and live exports

140 131 134 133 132 130 136 149 134 152 117

Pigs 127 128 114 113 108 109 110 108 109 130 114

Poultry 147 156 158 168 170 174 174 208 212 221 225

Sheep and lambs

75 69 62 42 34 39 46 49 39 41 45

Major livestock disposals

137 131 132 131 130 129 137 148 136 153 125

Milk (all purposes)

67 61 64 66 61 61 57 54 52 49 51

Wool 54 46 23 19 34 38 34 25 18 12 12

Eggs 260 445 266 290 340 385 395 588 603 413 472

Major livestock products

77 78 61 63 68 72 69 75 72 57 62

Livestock 119 116 112 112 113 113 118 127 118 127 107

Total agricultureb

100 102 107 101 105 111 112 111 107 117 116

a Base of each index is 1996–97 = 100.

b Excludes lifestyle horticulture due to insufficient data.

Source: Compiled by DAF using ABS and DAF data.

The indexes of different commodities and groups of commodities were calculated using a simple Laspeyres index with 1996–97 as the base year. The year 1996–97 was chosen as the base year because it is considered to be a year when average production levels were recorded for most of Queensland’s major agricultural commodities.


Livestock disposals

Cattle and calvesKey findings

• The 2016–17 GVP for Queensland’s cattle and calf industry (including cattle and calves sold for slaughter plus live exports) is forecast to be $4.06 billion.

• Approximately 3.8 million head of cattle and calves were slaughtered in Queensland in 2015–16.

• Meat and Livestock Australia (MLA) forecast that the national herd will fall to 26.2 million head in 2016, the lowest level in 20 years, before rising slightly again in 2017, to 26.3 million head.

• The drought in the previous two seasons—when record slaughterings and live cattle exports were achieved—has reduced herd numbers. This is expected to lead to stronger competition between restockers, feedlots and processors for the limited number of cattle. Fortuitously, the record turn-off

period occurred when demand for export markets for beef had improved and record prices were achieved, particularly for manufacturing-grade meats exported to the United States.

• Over 1.6 million head of cattle were turned off from the Queensland feedlot sector in 2015. This was 57 per cent of the nation’s total and followed firm export demand from South Korea and Japan.

• Big challenges face the feedlot sector with higher prices of feeder cattle and lower premiums for finished cattle than for this time last year.

• Average carcase weights are expected to increase considerably. This is due to widespread rainfall boosting pasture and grain production, much lower stocking rates, a greater proportion of lighter northern cattle exported live, a higher proportion of cattle on feed and fewer female cattle processed.

• The Eastern Young Cattle Indicator (EYCI) passed the 700 cents per kilogram carcase (dressed) weight for the first time but could ease back over the next 6 months.

• The majority of beef abattoirs in Queensland and the other eastern states are reporting lost days (or even weeks) of production to try to stay operational and sustain numbers of stock available for slaughter. The lack of available stock has been cited as the reason for job losses within the sector.

• Beef and veal exports are expected to fall as a result of lower production, not due to waning demand.

• The United States beef sector is significantly stronger than it was 12 months ago, as producers rebuild their herds and enjoy bumper grain harvests. This has increased competition in our Japanese and Korean markets.

• The impact of our free trade agreements with both South Korea and Japan has advantaged Queensland, as tariff reductions make exporting more profitable.

Birdsville

Mount Isa

Longreach

Burketown

Charleville

Weipa

Mackay

Cairns

Townsville

Rockhampton

Bundaberg

ChartersTowers

BRISBANE

beef


• Despite showing early promise as new beef export destinations, China and the Middle East prefer to source their beef from Brazil due to favourable exchange rates and the decline in Australian production.

• Brazil was approved to export to the United States as well as China and is making inroads into Queensland’s traditional markets, particularly in manufactured beef.

• In 2015–16, Queensland exported just under 250 000 head of live cattle. This export was valued at $283.5 million and was 19 per cent of the nation’s total export of 1.3 million head (valued at $1.55 billion).

Forecast

The 2016–17 GVP for Queensland’s cattle and calf industry (including cattle and calves sold for slaughter plus live exports) is forecast to be $4.06 billion. This is 6 per cent lower than the final estimate for 2015–16 but 2 per cent higher than the average for the past 5 years.

Analysis and discussion

Cattle and calves sold for slaughter and total cattle numbers

For 2016–17, the GVP for cattle and calves sold for slaughter is forecast to be $3.8 billion, which is a 29 per cent reduction on last year’s final estimate. In 2015–16, 3.8 million head of cattle and calves were slaughtered in Queensland, 14 per cent less than in the previous year.

0

500

1000

1500

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2009–10

2010–11

2011–12

2012–13

2013–14

2014–15

2015–16

Financial year

Slau

ghte

ring

s (’0

00s)

Figure 6 Queensland cattle and calf slaughterings, 2000–01 to 2015–16

Cattle projections from MLA indicate that the Australian cattle market will battle conflicting forces for the remainder of 2016. From a supply point of view, cattle numbers over the next 2 years will fall to levels not seen in more than 20 years. This is predicted to result in stronger competition between restockers, feedlots and processors for the limited cattle available.

Working to partly offset the projected year-on-year decline in adult cattle slaughter for 2016 will be the expectation of considerably increased average carcase weights. However, beef and veal exports are expected to fall as a result of lower production, rather than due to waning demand. This means the outlook for the remainder of the financial year is very tight. Processors are continuing to work towards shorter weeks where possible. This is mounting pressure on supply into the domestic market as orders fall behind schedule.


From the Australian production point of view, the flow-on effect from a third consecutive year with more than 9 million head exiting the system will be much tighter supplies, especially in 2017, when adult cattle slaughter is forecast to fall below 7 million head for the first time since 1996.

The widespread rainfall over the country over the past few months has led to many producers rebuilding their herds and thus reducing the number of cattle on the market. Therefore, fewer cattle will be available for slaughter, but hopefully this will be offset by heavier finished stock.

0

5

10

15

20

25

30

35

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Tota

l cat

tle a

nd c

alve

s (m

)

YearQueensland Australia

Figure 7 Total cattle and calf numbers, Queensland and Australia, 2005 to 2014

Cattle numbers in Queensland have ranged from approximately 40 to 44 per cent of the total Australian herd over the past decade. By 2014, the numbers had plateaued, but they are expected to increase over the next few years as rebuilding herds become a priority. MLA forecasts that the national herd will fall to 26.2 million head in 2016, the lowest level in 20 years, before rising slightly in 2017, to 26.3 million head.

63

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2015–16

Cattle and calves Cows and heifers

Fincancial year

Perc

enta

ge

Figure 8 Percentage share of total slaughter for cattle and calves and cows and heifers, Queensland, 2000–01 to 2015–16

Source: ABS, 2016.


The female slaughter percentage has decreased since last year and is below the previous high levels of 2014–15 (as shown in Figure 8). The decrease suggests that more producers have started to increase their herd rebuilding in response to improved seasonal conditions.

0

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01/07/2010 01/07/2011 01/07/2012 01/07/2013 01/07/2014 01/07/2015 01/07/2016

EYCI

(c/k

g)

Figure 9 Eastern Young Cattle Indicator (EYCI), 2010 to 2016

Source: MLA, 2016.

In August this year, the EYCI passed the 700 cents per kilogram carcase (dressed) weight for the first time. It was only 14 months before this that it surpassed 500 cents per kilogram. The EYCI is the general benchmark of Australian cattle prices and is a 7-day rolling average. EYCI eligible cattle are C2 and C3 vealer and yearling steers and heifers sold in Eastern Seaboard saleyards.

According to MLA, widespread rain across the eastern states, combined with the national cattle herd sitting at a 20-year low, had pushed the EYCI into previously unchartered territory. Analysis by MLA showed that restockers have been the driving force behind the EYCI bolting past 600 cents per kilogram during June and July.

MLA found that restockers accounted for 41 per cent of EYCI-eligible purchases in July; this was up from 34 per cent in the same month last year. However, MLA found that lotfeeders have held their own, consistently accounting for 44 per cent of EYCI cattle bought in the period from April to July.

MLA also found that processors usually account for 29 per cent of the July EYCI purchases (using the 5-year average), but during July 2016, they collectively only bought 15 per cent. They said that this was the lowest proportion of processor EYCI acquisitions in over 6 years and that it truly highlights where the cattle market strength is being generated.

Looking ahead, MLA said the biggest factor influencing where the EYCI will eventually peak is the depth of restocker pockets. They believe three things typically happen to the EYCI from August to November—prices ease, restockers take a step back and processors purchase fewer EYCI cattle. They stated:

‘Whether or not these trends occur into 2016–17 remains to be seen, but if the average price decline were to be repeated, the EYCI would remain in the mid-600 cents per kilogram … the trend least likely to occur, for the first time, is processors taking any further steps back in the number of EYCI cattle purchased—especially considering the very low proportion of acquisitions they are currently making.’


Exports

According to MLA, following four consecutive years of increasing beef export volumes, beef exports are down by 100 000 tonnes on the same period last year. They predict that Australia will face increased competition from the United States as it rebuilds its herd from a low in 2014, particularly in the Japanese and Korean markets.

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Figure 10 Australian exports of beef and veal, 2015–16

Source: DAF, 2016.

Exports of Australian beef and veal decreased by 13 per cent from 1 347 487 tonnes in 2014–15 to 1 165 973 tonnes in 2015–16. According to Beef Central, these results reflect the general shortage of slaughter cattle combined with the highest livestock procurement prices in the world, which make it difficult for Australia to compete in international markets. This is most evident in the United States and Chinese markets.

For 2015–16, shipments to the United States totalled 334 431 tonnes shipping weight, down nearly 30 per cent on the previous year’s high. According to Beef Central, the United States has been impacted greatly by Australia’s reduced production in manufacturing beef (driven by a reduction in the cow cull) as well as rapid increases in its own beef production over 2015–16.

For China, the year-to-date shipments have totalled less than 65 000 tonnes, which is 30 000 tonnes less than for the corresponding period last year. China has shifted its focus to Brazil and reports suggest that Brazil has become China’s supplier of beef.

Australian exports to Japan were also down (by 12 per cent) on the previous year, at 268 404 tonnes shipping weight. However, Japan has overtaken the United States to become Australia’s largest export market (by volume). There was some excellent growth (10 per cent) in the volume of beef shipped to South Korea, which totalled 173 189 tonnes shipping weight. However, there is increasing competition in both these markets from the United States.

Our Middle Eastern markets have also suffered from the more price-competitive Brazilian beef suppliers, with trade down by over half the volume of last year. One shining light has been the increase in exports to Indonesia, where government action to increase supply to help reduce local beef prices has seen shipments increase over the past year.


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Figure 11 Queensland exports of beef and veal, 2015–16

Source: DAF, 2016.

In 2014–15, Queensland exported 624 626 tonnes of beef and veal, accounting for 54 per cent of Australia’s beef and veal exports. This was a decrease of approximately 85 300 tonnes from the previous year. Japan was Queensland’s largest export market, accounting for 28 per cent of exports, followed by the United States (25 per cent) and South Korea (17 per cent).

Preliminary figures for 2015–16 indicate that Queensland exported $5.5 billion worth of beef, down 5 per cent from the previous year. Interestingly, fresh and chilled beef exports increased by nearly 8 per cent to just over $2 billion, whereas frozen beef exports eased back nearly 13 per cent to just under $2.5 billion. This highlights the former having a price premium over the latter.

Feedlots

In the June 2016 quarter, Queensland’s feedlots were operating at 80 per cent capacity—7 per cent less than the June 2015 quarter. According to the Australian Lot Feeder’s Association (ALFA), the results for the first half of 2015 indicate a decrease in cattle numbers on feed for all states except Queensland, maybe reflecting the high global grain availability and therefore lower feed grain prices.

Over 1.6 million head of cattle were turned off from the Queensland feedlot sector in 2015. This was 57 per cent of the nation’s total and followed firm export demand from South Korea and Japan.

ALFA reports that Australian grain-fed beef exports were 268 504 tonnes shipped weight in 2015–16, which is up 7 per cent year-on-year and 5545 tonnes higher than the previous record of 2006–07. The increase of average carcase weights, as producers turn to grain, reflects producers’ willingness to cash in on the weight gains being paid for at the saleyards.

However, there are big challenges facing the feedlot sector, with relatively higher prices of feeder cattle and lower premiums for finished cattle.


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Figure 12 Queensland cattle on feed and feedlot capacity, March 2010 to June 2016

Source: ALFA/MLA, June 2016 national accredited feedlot survey.

Live cattle exports

The GVP for Queensland’s live cattle exports in 2016–17 is forecast to be $220 million. This is 21 per cent less than the preliminary estimate for 2015–16, but still greater than the average for the past 5 years. In 2015–16, Queensland exported just under 250 000 head of live cattle (19 per cent of the nation’s total of 1.3 million head), valued at $283.5 million.

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Figure 13 Queensland live cattle exports, 1995–96 to 2015–16


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Figure 14 Queensland live cattle exports by country of destination, 1995–96 to 2015–16

The main export countries for live cattle from Queensland in 2015–16 were Vietnam (53 per cent) and Indonesia (45 per cent), with the former significantly increasing its intake over that period. Live cattle exporters are anticipating that the number of cattle available will become particularly tight over the next year as the attention turns to rebuilding of herds. Animal welfare issues remain in focus after unfavourable reporting of slaughtering practices, this time in Vietnam.

PoultryForecast

The GVP for poultry in Queensland for 2016–17 is forecast to be $619 million, a 1 per cent increase on DAF’s final estimate for 2015–16 and 21 per cent higher than the average for the past 5 years.


Queensland poultry meat production is forecast to increase in 2016–17 as lower retail prices (compared to beef, lamb and pork) drive increased chicken meat consumption. ABARES forecasts that Australian poultry meat production in 2016–17 will increase by 2 per cent.9 Chicken meat production has been rising steadily over the past 5 years, with Queensland’s production rising 26 per cent to 245 500 tonnes in 2015–16 (see Figure 15).10 This strong

growth is due to an increase in the quantity of birds produced, combined with improvements in the genetics of poultry birds (which have increased bird weights) and processing efficiencies. Queensland is rivalling Victoria to be the second-largest producing state in Australia, after New South Wales.

Production increases are being supported by consumer demand for chicken meat underpinned predominantly by the growing retail price disparity (favouring poultry) between poultry meat and other meats. Population growth is also contributing to growth in chicken meat demand. ABARES

9 ABARES 2016, Agricultural commodities: June quarter 2016, vol. 6, no. 32, Commonwealth of Australia, Canberra.

10 ABS 2016, Livestock products, Australia, June 2016, cat. no. 7215.0.

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estimates that by 2020–21 annual chicken meat consumption will reach 49 kilograms per person, an 8 per cent increase from 2014–15. In contrast, beef and lamb consumption is expected, over the same period, to decrease by 12 per cent and 2 per cent respectively. Pig meat consumption is forecast to increase by 7 per cent over the same time.11

Farm-gate poultry prices are expected to increase by 3 per cent in 2016–17, due to strong domestic demand. Over the past decade the industry has achieved significant production efficiencies, leading to increased carcase weights and lower production costs.

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Figure 15 Queensland poultry meat production, 2007–08 to 2016–17

Source: ABS 2016, Livestock products, Australia, June 2016, cat. no. 7215.0.

PigsForecast

The GVP for Queensland’s pig production for 2016–17 is forecast to be $333 million, 6 per cent higher than DAF’s final estimate (revised) for 2015–16 and 32 per cent greater than the average for the past 5 years.


The GVP for Queensland’s pig production in 2016–17 is expected to increase as both supply and prices received increase.

ABARES forecasts a national 3 per cent increase in prices received by farmers for pig meat, on the basis of expected higher consumer demand as beef and lamb prices remain strong.12 Queensland’s pig meat production and prices are forecast to be slightly higher than the national average

11 ABARES 2016, Agricultural commodities: March quarter 2016, vol. 6, no. 31, Commonwealth of Australia, Canberra.

12 ABARES 2016, Agricultural commodities: June quarter 2016, vol. 6, no. 2, Commonwealth of Australia, Canberra.

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in the medium term. In 2015–16, pig meat prices in Queensland were 5 per cent higher than the national average at $282.46 per head.13 The forecast price increase follows consecutive price rises since 2010–11 (see Figure 16).

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Figure 16 Queensland pig saleyard prices and slaughterings, 2007–08 to 2016–17

Source: ABS, unpublished slaughter data.

ABARES forecasts a 1 per cent increase in national pig slaughterings, supported by increased domestic demand for pork as beef and lamb retail prices are expected to remain strong. Herd expansion, increased slaughter weights, increased piglet survival rates and reductions in feed prices (a major input to pig production) have all contributed to steady pig meat production increases over the last 5 years. Queensland’s pig slaughterings are forecast to increase for the fourth consecutive year, reaching approximately 1.146 million head in 2016–17.

Australian pig meat exports are forecast to increase by 4 per cent by volume in 2016–17, with exports accounting for approximately 7.5 per cent of production. Queensland’s share of exports is likely to be slightly above the national average, in part due to Queensland’s proximity to major Asian export markets and therefore lower freight costs.

Sheep and lambsForecast

The GVP for Queensland’s sheep and lamb production in 2016–17 is forecast to be $62 million, 10 per cent below DAF’s final estimate for 2015–16 but 3 per cent above the average for the past 5 years.


Although export demand in key markets proved lower than expected in 2015–16, the lower Australian dollar helped prices received by producers. ABARES expects Australian sheep and lamb saleyard prices to rise by around 5 per cent in 2016–17 in response to restocker demand and improving export conditions.14 Queensland’s saleyard prices are forecast to follow this national trend (Figure 17). In 2015–16, Queensland supplied, respectively, 4.7 and 1.4 per cent of the national slaughterings in sheep and lambs. This proportion is expected to continue in the current year.

13 ABS 2016, Livestock products, Australia, June 2016, cat. no. 7215.0.

14 ABARES 2016, Agricultural commodities: September quarter, Commonwealth of Australia, Canberra.


On the supply side, turn-off of lambs and sheep in 2016–17 is forecast to decline. Strong export demand and drought over the last few years resulted in a reduction of the flock. Should follow-up rains continue after a favourable winter, pressure to restock paddocks will reduce numbers available for slaughter and rebuild the national flock from 70.9 million to nearly 72 million by the end of 2016–17. ABARES also forecasts that, despite higher prices, nationwide sheep and lamb slaughterings will fall by 20 and 1 per cent, respectively, in 2016–17.

The demand outlook is positive. Worldwide supply of lamb and sheep meat is subdued, so Australian producers are not facing fierce competition. Domestic demand is steady, and the tightening of beef prices is likely to support lamb. China and the United States have been stand-out markets for Australia. Although Chinese domestic production of sheep meats has been increasing, continuing economic growth stimulates demand. While United States stocks of lamb have been building up, potentially dampening demand growth, the lower Australian dollar improved Australian producers’ competitive position. In all, marginally reduced Australian lamb export volumes are expected be balanced by improved prices, raising the total value by 1 per cent. In contrast, mutton exports are likely to fall 17 per cent by value, with better prices barely cushioning the predicted 18 per cent fall in export volumes.

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Figure 17 Queensland sheep and lamb saleyard prices and slaughterings, 2007–08 to 2016–17

Sources: ABS, ABARES.

For a discussion on wool, see page 34.


Livestock productsAlthough AgTrends generally discusses only the larger primary industry sectors, special mention should be made of the beekeeping industry.

While the direct commodity production of the industry is relatively small (the GVP in 2013–14 was estimated to be $17 million), beekeeping is important to cropping industries. In particular, bees provide significant pollination services as a by-product of honey/pollen collection. The value of pollination is reflected in the gross values of the cropping industries that honey bees service, but these services are difficult to value, primarily because of a lack of data about the extent of reliance on feral honey bees.15

Australia is the last country that is free of the bee parasite varroa mite. If this mite were to become established in Australia, the importance of pollination by managed hives would increase significantly as feral bee numbers dropped. Discovery of varroa-infested Asian honey bees in Townsville in July this year triggered a strong response from Biosecurity Queensland, along with the standard national process for dealing with potentially high-impact biosecurity threats.

MilkForecast

The GVP for milk in Queensland for 2016–17 is forecast to be $233 million, 5 per cent higher than DAF’s final estimate for 2015–16 but 1 per cent lower than the average for the past 5 years.

Milk production in 2016–17 is expected to be about the same as for 2015–16, at around 405 million litres. This is in stark contrast to southern states, where production falls of around 10 per cent are expected this year.

Packaged milk sales for Queensland for 2016–17 are expected to remain close to the levels reached in 2015–16 (585 million litres).


Queensland’s milk production for 2016–17 is likely to be very stable, given that prices for several major processors are unchanged despite falls in the more export-exposed dairy industries of the southern states. It is likely that environmental conditions will largely dictate whether production increases, decreases or stays the same.

A number of factors could significantly influence the northern dairy industry over the year. These include:

• an increase in the share of branded milk sales versus store-brand milk sales

• the outcome of an investigation by the Australian Competition and Consumer Commission into ‘$1 per litre’ milk sold by major retailers and federal government interest in the Australian dairy industry value chain

• the growing general shortage of milk production to meet local market demand

• the growing domestic market demand

• the long-term growing world demand for dairy products, particularly in Asia

• the growing foreign interest in sourcing milk and dairy products from the region, with the potential for foreign investment.

15 The latest Australian figure of $4–6 billion quoted by the New South Wales Department of Primary Industries is unattributed. However, peer-reviewed work puts the value of ecosystem services by bees in New Zealand to nearly NZ$2 billion (<https://peerj.com/articles/2099.pdf>). The figure of $17 million was found by taking the proportion of bee hives in Australia that Queensland has and multiplying it by the Australian GVP estimate.

https://peerj.com/articles/2099.pdf

https://peerj.com/articles/2099.pdf


EggsForecast

For 2016–17, the GVP for eggs in Queensland is forecast to be $217 million, a 6 per cent increase from DAF’s revised estimate for 2015–16 and 16 per cent above the average for the past 5 years.


During 2016–17, Queensland’s farm-gate egg prices are forecast to continue to rise in line with the national trend (1 per cent increase forecast by ABARES). Contributing to this projected rise is the continued shift towards production of high-value eggs, strong demand, improved efficiencies and possible industry consolidation as the industry moves to a smaller number of larger farms.

Queensland’s egg production is forecast to be 105 million dozen in 2016–17, a 6 per cent increase from 2015–16. The production growth is expected to come from flock increases and from increases in the rate of eggs produced per bird. The GVP for eggs has been steadily increasing from the mid-2000s (see Figure 18). The majority of the increase has been through increased production of higher value eggs rather than increases in the gross unit value. Most of the price gains have come from a shift away from cage eggs to barn-laid, free-range and specialty eggs (which command a price premium). Production practices for these eggs have additional costs and risks compared to cage production, so higher egg prices do not necessarily mean higher industry profits.

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Figure 18 GVP of eggs produced in Queensland, 2007–08 to 2016–17

Sources: ABS, Value of agricultural commodities produced, Australia, cat. no. 7503.0, various years; DAF AgTrends 2015–16 revised estimate and 2016–17 forecast.

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WoolForecast

The GVP for wool for 2016–17 is forecast to be $56 million, 2 per cent higher than DAF’s final forecast for 2015–16 but 33 per cent lower than the average for the past 5 years.


The GVP for Queensland’s wool production is forecast to languish for the fourth consecutive year due to adverse seasonal conditions across the main sheep-growing regions. Significant destocking has occurred over this period, which has resulted in lower opening sheep numbers available for shearing and a forecast reduction in clip weights in 2016–17.

The Australian Wool Production Forecast Committee expects the total greasy wool production in Queensland in 2016–17 to be 5.59 million kilograms, which is a 19.5 per cent fall from the final estimate of 2015–16. Although winter rains were encouraging, continuing favourable conditions are required for flock rebuilding. Even so, the wool clip would not show the higher stock numbers until 2017–18.

ABARES forecasts an average Eastern Market Indicator (EMI) price for 2016–17 of 1300 cents per kilogram16, 4 per cent above the 2015–16 price. The EMI finished 2015–16 at 1297 cents per kilogram, not far off the year’s high of 1355 cents per kilogram and 66 points above the start of the year, giving an average of 1250 cents per kilogram over the financial year. The decline of the Australian dollar helped in arresting the price slide over the last few years (see Figure 19).

Wool demand did not live up to expectations in 2015–16, although the price may have found the floor during the year. The price forecast by ABARES is based on improved purchases of wool apparel in response to world economic growth. Resulting processor demand, particularly in China, should maintain market momentum, while limited growth in world wool supplies underwrites price. However, the noticeably improved competitive position of synthetic fibres will continue as long as low hydrocarbon prices do, diluting natural fibres in price-sensitive applications and restricting price rises. As with other exports, a lower Australian dollar is essential for favourable Australian wool returns.

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Figure 19 EMI, 1 July 2011 to 27 May 2016

16 ABARES 2015, Agricultural commodities: June quarter, Commonwealth of Australia, Canberra.


Crops

Horticulture crops

Fruit and nutsForecast

The total GVP for fruit and nuts in Queensland for 2016–17 is forecast to be $1.78 billion. This is 8 per cent higher than DAF’s final estimate for 2015–16 and 25 per cent greater than the average for the past 5 years.


The GVP for bananas for 2016–17 is forecast to be $584 million, 1 per cent greater than DAF’s final estimate for 2015–16 and 12 per cent greater than the average for the past 5 years. The cooler than expected weather has curbed supply slightly. Most of the state’s banana production occurs in the SA2 geographical areas of Tully, Johnstone, Babinda, Atherton, Mareeba, Innisfail and Gordonvale–Trinity in northern Queensland. Panama disease discovered in Tully in 2015 has not affected industry production, as it is still limited to a single farm.

The GVP for strawberries for 2016–17 is forecast to be $144 million, 20 per cent less than DAF’s final estimate for 2015–16 and 13 per cent lower than the average for the past 5 years.

Strawberry production will be lower this year due to the warmer climate in the early part of the season, which affected the valuable early crop. The lighter supply is expected to keep prices buoyant, but the reduced production has meant a lower GVP forecast.

Most of Queensland’s strawberry production occurs in the SA2 geographical boundaries of Dayboro, Beerwah, Wamuran, Elimbah and Caboolture.

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The GVP for avocados for 2016–17 is forecast to be $225 million, 49 per cent greater than DAF’s final estimate for 2015–16 and 50 per cent greater than the average for the past 5 years.

Strong consumer demand for avocados has kept wholesale prices buoyant. Central Queensland is recovering from the wet weather a few years ago that caused yields to decline. New planting and improved yields means production will be greater this year.

Most of the state’s avocado production occurs in the SA2 geographical areas of Bundaberg Region—North, Bundaberg Region—South, Tablelands, Atherton, Mareeba, Crows Nest – Rosalie, Gympie Region and Nanango.

The GVP for macadamias for 2016–17 is forecast to be $140 million, 17 per cent higher than DAF’s final estimate for 2015–16 and 97 per cent greater than the average for the past 5 years.

Queensland’s macadamia production this year is expected to be higher, around 28 000 tonnes (out of 50 000 tonnes total Australian production). The wholesale price is slightly lower than last year, but the greater production has resulted in a higher GVP forecast. The firm prices and growth in production are due to the strong demand from Asia.

Most of the state’s macadamia nut production occurs in the SA2 geographical areas of Bundaberg North – Gooburrum, Bundaberg Region—North, Bundaberg Region—South, Gympie Region and Glass House Mountains.

The GVP for mandarins for 2016–17 is forecast to be $122 million, 30 per cent greater than DAF’s final forecast for 2015–16 and 56 per cent greater than the average for the past 5 years.

Queensland’s mandarin production has increased due to new plantings and favourable growing conditions. Production is estimated to be 81 400 tonnes at an average wholesale price of $1.50 per kilogram.

Most of the state’s citrus production occurs in the SA2 geographical areas of Gayndah–Mundubbera and Central Highlands—West.

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The GVP for mangoes for 2016–17 is forecast to be $92 million, 23 per cent greater than DAF’s final estimate for 2015–16 and 39 per cent greater than the average for the past 5 years.

At this stage, Queensland’s mango production is tracking normally, but it is too early in the season to give an accurate assessment of total production. The higher GVP is due to the wholesale price per tray being revised upwards to reflect the higher prices paid for the premium fruit.

Most of the state’s mango production occurs in the SA2 geographical areas of Tablelands, Burdekin, Mareeba, Collinsville, Bundaberg Region—North and Bowen.

The GVP for apples for 2016–17 is forecast to be $82 million, the same as DAF’s final estimate for 2015–16 and 37 per cent greater than the average for the past 5 years.

Queensland’s apple crop has been large this year, although the national crop is marginally lower. Prices at the moment are similar to last year’s, but the lighter national supply is expected to lift prices slightly higher during the summer months. The new crop is harvested in February to May, and it is too early to give an accurate assessment of total production as trees are currently dormant. At this stage, the apple GVP is expected to remain the same as last year.

Most of the state’s apple production occurs in the Stanthorpe Region.

The GVP for pineapples for 2016–17 is forecast to be $74 million, 4 per cent greater than DAF’s final estimate for 2015–16 and 6 per cent greater than the average for the past 5 years.

Pineapples destined for the cannery are expected to be down marginally (5.5 per cent), while pineapples for the fresh market are forecast to be down by 2 per cent. The slight drop in production is due to some natural flowering that had been triggered by cold nights, which affected the smaller plants and resulted in below-average fruit size. The higher forecast is due to a revised GVP figure for last year and an increase in prices paid for processing fruit.

Most of the state’s pineapple production occurs in the SA2 geographical areas of Wamuran, Yeppoon, Bundaberg Region—North, Elimbah, Glass House Mountains and Beerwah.

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VegetablesForecast

For 2016–17, Queensland’s GVP for vegetables is forecast to be $1.26 billion, 3 per cent higher than 2015–16 and 6 per cent higher than the average for the past 5 years.


The GVP for tomatoes for 2016–17 is forecast to be $298 million, 1 per cent higher than DAF’s final estimate for 2015–16 and 9 per cent higher than the average for the past 5 years.

Prices have been higher than expected in the Bowen region, and this has helped to alleviate some of the falls in production in the Bundaberg region, where producers have diversified into macadamia nut production.

Most of the state’s tomato production occurs in the SA2 geographical areas of Bundaberg Region—South, Collinsville and Bowen.

The GVP for capsicums and chillies for 2016–17 is forecast to be $154 million, 8 per cent more than DAF’s final estimate for 2015–16 and 6 per cent greater than the average for the past 5 years.

As with tomatoes, the prices in the Bowen region have been better than expected, which has helped to boost growers’ returns.

Most of the state’s capsicum and chilli production occurs in the SA2 geographical areas of Collinsville, Bundaberg Region—South and Bowen.

Queensland’s GVP for mushrooms for 2016–17 is forecast to be $70 million, the same as DAF’s final estimate for 2015–16 and 15 per cent higher than the average for the past 5 years.

Most of the state’s mushroom production occurs in the SA2 geographical areas of Greenbank, Stanthorpe Region and Palmwoods.

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The GVP for sweet potatoes for 2016–17 is forecast to be $64 million, 3 per cent higher than DAF’s final estimate for 2015–16 and 17 per cent higher than the average for the past 5 years.

Queensland produces a large percentage of Australia’s sweet potatoes, with Bundaberg being the main growing area.

Other vegetablesThe GVP for lettuce in Queensland for 2016–17 is forecast to be $56 million, 4 per cent greater than DAF’s final estimate for 2015–16 but 2 per cent lower than the average for the past 5 years.

The lettuce crop is expected to be about the same in terms of volume and price over the next year due to good supplies of water.

Most of the state’s lettuce production occurs in the SA2 geographical areas of Lockyer Valley—East, Lockyer Valley—West, Stanthorpe Region, Cambooya–Wyreema, Southern Downs—West and Gatton.

Queensland’s GVP for potatoes for 2016–17 is forecast to be $52 million, 2 per cent less than DAF’s final estimate for 2015–16 and 9 per cent less than the average for the past 5 years.

Most of the state’s potato production occurs in the SA2 geographical areas of Atherton, Lockyer Valley—East, Lockyer Valley—West, Dalrymple, Malanda–Yungaburra and Herberton.

The GVP for watermelons in Queensland for 2016–17 is forecast to be $31 million, 6 per cent less than DAF’s final estimate for 2015–16 and 11 per cent less than the average for the past 5 years.

Most of the state’s watermelon production occurs in the SA2 geographical areas of Burdekin, Collinsville, Chinchilla, Bargara – Burnett Heads, Jondaryan and Lockyer Valley—West.

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Lifestyle horticulture

Production nurseriesForecast

The GVP for production nurseries for 2016–17 is forecast to remain steady at $898 million, 3 per cent above the average for the past 5 years.


The industry has experienced ideal conditions for production, with climatic conditions being favourable for producers as well as end users—a critical aspect driving demand. The market remains buoyant with consumer confidence strong. It is anticipated that the retail, landscape, fruit and vegetable, forestry and revegetation sectors will retain momentum during 2016–17.

As the demand for ‘greenlife’ products continues to grow, the nursery industry has adapted to meet market needs. The industry has ensured its longevity by pursuing sustainable and environmentally friendly production practices combined with strong intrastate and interstate supply chains. Queensland’s production nurseries continue to deliver stock that consumers have confidence in—products being fit for purpose and delivering value for money. Businesses are professional, commercial enterprises whose products service a number of production and service sectors. The versatility of the industry continues to be its strength.

Queensland’s production nurseries are forecast to retain market strength during 2016–17.

Table 11 Production nurseries GVP by sector, 2016–17

Products GVP ($m) Percentage of total production nurseries GVP

Retail stock 395 .1 44 .0

Landscape stock 224 .5 25 .0

Fruit and vegetable stock 184 .1 20 .5

Forestry stock 80 .8 9 .0

Revegetation/rehabilitation stock 13 .5 1 .5

Total 898 .0 100 .0

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nurseryproduction


TurfForecast

The GVP for turf for 2016–17 is forecast to be $185 million, 6 per cent above the 2015–16 estimate and 28 per cent above the average for the past 5 years.


The anticipated boost in the production of turf by 5 per cent in the coming year could be attributed to the strength of the commercial and residential construction sectors. An increase in greenscapes leading up to the Commonwealth Games is expected to sustain growth, and a strong price has created favourable market conditions. A softening of the retail market, including the closure of Masters Home Improvement centres, is expected to have minimal effect on the market.

Production conditions have been favourable. The industry continues to innovate to create efficiencies and maximise production potential. Retailers are stocking a wide variety of turf species, making turf more available to the household buyer. This increased access to turf has been driven by a more sophisticated and discerning consumer and access to water. The industry is forecast to capitalise on these strengths during 2016–17.

Cut flowersForecast

The GVP for cut flowers and foliage for 2016–17 is forecast to be $156 million. This is a moderate 3 per cent increase from 2015–16 (due to demand driven by the domestic market) and is 3 per cent above the average for the past 5 years.


Flower production in Queensland has remained consistent in recent years. The industry is consolidating and businesses are scaling production to meet market demand.

The industry is working together in developing promotional activities to raise awareness of cut flowers and foliage, particularly locally grown products. The inaugural Australian

Flowers Week in September 2016 was designed to celebrate the industry nationally. Cut flowers currently driving demand include lilies and gerbera, as well as more boutique products including selected native and tropical flower and foliage products. Flower seasonality, availability and price point all impact on consumer choice. The industry is forecast to remain strong in 2016–17.

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Other crops

Sugar caneForecast

The GVP for Queensland’s sugar cane for 2016–17 is forecast to be $1.42 billion, a 24 per cent increase on the final estimate for the 2015–16 crop and 25 per cent above the average for the past 5 years. Total revenue from the 2016 Queensland crop, in raw-sugar equivalent, is expected to be $2.25 billion.


Queensland’s 2016–17 crop is forecast to reach 32.9 million tonnes, an increase of 200 000 tonnes from the previous season. This slight increase has been brought about by a small estimated increase in the area planted. Good growing conditions are expected to result in a strong yield of 90 tonnes per hectare. This yield is in line with that of the 2015 season.

The average CCS17 is forecast to reach 13.00 units, well down on the 2015 achievement of 13.97 units. This is due to wet conditions in the early part of the harvest and the associated warmer than average conditions. These climatic conditions resulted in additional growth rather than an increase in the sugar content.

At $41.8 per tonne of sugar cane, the forecast average return to Queensland cane growers for 2016–17 is 33.1 per cent higher than the final estimate for 2015–16.

As at 26 August 2016, Queensland Sugar Limited estimated its harvest pool return to be $527 per tonne IPS18, a 37.6 per cent increase from the 2014–15 estimate of $383, which was one of the lowest in 7 years.

Industry situation

ABARES has forecast that the world sugar price will increase 6 per cent in 2016–17. A key influencer of this is the expectation that demand for sugar will exceed production for the second consecutive year.

Worldwide sugar consumption is forecast to reach a record high of 186 million tonnes, driven by increasing income and population as well as growth in food-processing industries in a number of countries (including India, China and Indonesia).

World sugar production is expected to increase by 3 per cent to 183 million tonnes in 2016–17. An important contributor to this is the forecast increase in Brazil’s harvest. This is due to increased plantings, coupled with significant cane standover from the previous season and a higher proportion of production being allocated to sugar over ethanol. The increased production in Brazil, Europe, Thailand and Australia offsets lower production in China, India and the United States.

As Brazil, Thailand and Australia are major exporters of sugar, the increased production in these countries is expected to result in world sugar exports increasing by 10 per cent in 2016–17. The expected net shortfall of approximately 3 million tonnes of sugar will be supplemented from the world sugar stocks, which are expected to decline to the lowest levels in 5 years.

17 CCS or commercial cane sugar is a measure of sugar content.

18 International polarity scale.

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CottonForecast

The GVP for cotton for 2016–17 is forecast to be $870 million, 63 per cent higher than DAF’s final estimate for 2015–16 and 33 per cent higher than the average for the past 5 years. The 2016–17 season still has very strong prospects, but as always will depend on reliable water supplies.


For 2016–17, the total area sown to cotton in Queensland is forecast to increase by 45 500 hectares to 153 000 hectares. An increase in average yields is expected due to increased irrigated cotton plantings, cotton lint production and cottonseed production. The cotton price is expected to increase from $450 to $510 per bale, and the cottonseed price is expected to remain

constant at $335 per tonne. The irrigated cotton cropping area is expected to increase by 35 per cent to 107 500 hectares. This includes 25 000 hectares on the Darling Downs, 26 000 hectares in the St George – Dirranbandi region, 35 000 hectares in the Border Rivers region and 21 500 hectares in Central Queensland.

Water storages

There have been decreases in irrigated water supplies into the Beardmore and Coolmunda dams since last year, but the Fairbairn dam level has increased marginally. The Leslie dam levels have remained fairly constant at around 20 per cent.

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Beardmore Coolmunda Fairbairn Leslie

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Figure 20 Stored volumes in major Queensland irrigation dams, September 2015 and 2016

Source: SunWater.

Domestic production

A forecast 42 per cent increase in area sown to 153 000 hectares in 2016–17 is estimated to increase cotton lint production to 1 394 750 bales or 316 600 tonnes, up 38 per cent from the 2015–16 level. Cottonseed production is forecast to increase by a third in 2016–17 to 475 000 tonnes, up from the 2015–16 level of 323 000 tonnes.

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World production

As detailed in Table 12, India was the world’s largest cotton producer in 2015–16, yielding just under 5.75 million tonnes and accounting for 27 per cent of world production. The next largest cotton producers were China, the United States and Pakistan, contributing 23 per cent, 13 per cent and 7 per cent respectively to world production. India and the United States are forecast to produce more than this in 2016–17, whereas China will produce less. China is forecast to import nearly 1 million tonnes of cotton in 2016–17. The United States is the world’s largest cotton exporter and is forecast to export 2.5 million tonnes of cotton in 2016–17, accounting for about a third of world cotton exports.

Table 12 World production of cotton, 2015–16 and 2016–17

Country 2015–16 production (’000 tonnes)

Share of world production (%)

2016–17 forecast production

(’000 tonnes)

India 5 748 27 5 879

China 4 790 23 4 572

United States 2 806 13 3 457

Pakistan 1 524 7 1 742

Brazil 1 328 6 1 448

Uzbekistan 827 4 806

Total world production 21 103 100 22 117

Note: Not all cotton producers are represented in the table.

Source: Foreign Agriculture Service, USDA 2016, Cotton: World Markets and Trade Monthly Circular, August 2016.

International supply and demand

For the major world importers, the United States Department of Agriculture (USDA) forecasts the following changes for 2016–17:

• Vietnam down 200 000 bales to 4.8 million on weaker demand for yarn exports

• Pakistan down 200 000 bales to 2.2 million on higher carry-in stocks

• Mexico up 125 000 bales to 1.275 million on a sharply smaller crop.

Changes to rates of cotton exports by most major exporters are also forecast for 2016–17:

• Brazil down 400 000 bales to 3.6 million on lower carry-in stocks

• Malaysia up 100 000 bales to 150 000 on increased transit trade.

As at August 2016, world cotton imports for 2016–17 are forecast to be 7.4 million tonnes and world closing stocks are expected to be 19.5 million tonnes. Total world production is projected to be 22.12 million tonnes, slightly less than the consumption of 24.23 million tonnes. Ending stocks are expected to be lower than in 2015–16.

http://www.fas.usda.gov/../../cotton/circular/Current.htm

http://www.fas.usda.gov/../../cotton/circular/Current.htm


Other major field crops

PeanutsForecast

Peanut GVP for 2016–17 is forecast to increase to $33 million. The current projection is more than double the estimate for 2014–15 of around $15 million. This is due to an increase in area sown in 2016–17 to more than double that for 2014–15, and low yields in 2014–15, despite price being approximately the same at around $990 per tonne.


All factors considered, area sown to peanuts is expected to remain unchanged in 2016–17 from the previous season at 9500 hectares, with yields also remaining unchanged and expected to average 3.5 tonnes per hectare, leaving

the production forecast the same at around 33 000 tonnes. The price is expected to increase to $1000 per tonne, up 5 per cent from $950 per tonne estimated in the March quarter, with a commensurate increase in GVP.

In industry news, the Peanut Company of Australia—the leading supplier of Australian-grown peanuts to domestic and overseas customers, operating out of Kingaroy in Central Queensland—has commenced vertical integration by introducing its own line of snack food and oil branded Picky Picky.

SoybeansForecast

The GVP for soybeans in 2016–17 is projected to be $13 million, 16 per cent above the estimate for the previous season. This is due to an expected larger area sown, despite a fall in price per tonne.


The area sown to soybeans is expected to increase 30 per cent from 11 700 hectares to 15 200 hectares. This is due to moisture conditions improving, particularly along the coast, encouraging soybean plantings. Forecast areas sown include 5500 hectares in North Queensland (although with 90 per cent of soybeans expected to be ploughed back into the paddocks as green manure), 1000 hectares in Central Queensland, 1200 hectares

in Wide Bay, 800 hectares in Burnett, 1500 hectares in the Lockyer, Fassifern and Brisbane valleys, and 5200 hectares on the Darling Downs. Production is estimated to increase 29 per cent from 19 900 tonnes to 25 700 tonnes, despite marginally lower (1 per cent) yields.

Due to larger northern hemisphere oilseed supplies, particularly of soybeans, the price has fallen 10 per cent in the March quarter of 2015–16 from $564 to $505 per tonne. Current prices for crushing soybeans range from $450 to $500 per tonne, with higher quality edible grade beans ranging from $500 to $600 per tonne.

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Approximately 25 per cent of Queensland’s soybeans are sold for crushing, and 75 per cent are sold as edible whole beans. However, excessively wet weather can lead to quality downgrades at harvest, in which case a higher proportion of soybeans would be sold for crushing. On average, 95 per cent of Queensland soybeans are exported and the remainder are sold domestically. Queensland’s major export markets are Taiwan, Papua New Guinea and Malaysia.

SunflowersForecast

The GVP for sunflowers is projected to fall 35 per cent from the revised estimate of $8.5 million to $5.5 million. This is primarily due to a fall in price, in addition to a smaller area sown.


The average price has dropped over 30 per cent from $800 to $550 per tonne due to cheap imports undercutting local prices. These imports are mainly from Brazil and Malaysia, the latter being refined products with no tariff. This sunflower seed is being imported by local health food stores. Despite the devalued Australian dollar, large northern hemisphere oilseed suppliers (of sunflower and soybean) have increased supplies in

general, more than offsetting the unfavourable Australian dollar exchange rate for imports.

The area sown to sunflowers is expected to fall 7 per cent to 10 000 hectares. This is due to the lower sunflower seed price and the strength of competing crop prices such as mung beans ($1100 per tonne) and cotton (more than $500 per bale), in addition to potential competition from sorghum. Yields are expected to be close to the long-term average, with a total output of just 10 000 tonnes. This, coupled with a significantly lower price, is projected to take GVP to a level low by historical standards.

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One development in the sunflower seed market since 2013–14 has been an emerging shortage of birdseed. Sunflower seed sold as birdseed attracts a significant price premium above the average crushing seed (for oil) price, with some sunflower seed sold as birdseed attracting up to $1500 per tonne at its highest end. In 2015–16, the majority of the Queensland crop was reportedly sold as birdseed.

Traditionally grey-striped sunflower seed is sold as birdseed; however, demand for birdseed was so high in 2015–16 that even non-traditional black sunflower was sold for that purpose. This trend may be set to continue into the 2016–17 season, and represents an opportunity to local grain growers who might otherwise suffer undercutting from cheap sunflower seed imports destined for crushing.

Sunflowers for the birdseed market


Summer cereal grains

Grain sorghumForecast

The GVP for sorghum for 2016–17 is projected to be $257 million, 18 per cent below the estimate made in the March quarter for the previous season, due to a smaller area sown and a fall in price. The current forecast is 24 per cent below the average for the past 5 years.


The area sown to sorghum is projected to be 375 000 hectares, about 20 per cent lower than the estimate for the last season of 476 000 hectares. This is in response to the expected price competitiveness of other crops amid a weak sorghum price, and assuming healthy irrigation water supplies underpinned by a

long-term forecast for above-average rainfall in South Queensland and Central Queensland.

Yields are expected to be 6 per cent higher than estimated in the March quarter for the 2015–16 season. This, coupled with smaller area sown, is forecast to take production 17 per cent lower from 1 370 000 tonnes to 1 140 000 tonnes.

The new season price for sorghum is $218 per tonne, translating to $200 per tonne at the farm gate and $225 per tonne at port (for South Queensland). The price for Central Queensland is estimated at $15 less per tonne. The current average Queensland price of $225 per tonne is 7 per cent below that estimated in the March quarter ($242 per tonne), with prices falling in response to increased white and coarse grain production and stocks in the northern hemisphere, including wheat (from the United States, Europe and Black Sea countries) and corn (from the United States). Providing a respite from depressed local prices, over May to June 2016, China showed strong export demand for Queensland sorghum, spiking Queensland prices by around a quarter. This will provide some support for price into the coming season.

MaizeForecast

The GVP for maize is forecast to be $64 million, 7 per cent above the estimate for the previous season of $60 million, mainly due to increased production despite a fall in price. The current projection lies 19 per cent above the average for the past 5 years.


The area sown to maize is forecast to increase to 42 400 hectares, which is about 50 per cent greater than the estimate for 2015–16 of 28 500 hectares. This may partly be prompted by the likelihood of above-average rainfall over spring and early summer. Additionally, maize will likely remain price

competitive with sorghum as a planting crop for growers. Despite the chance of above-average rainfall, at this point in forecasting (before plantings have commenced), close to average yields are assumed. This is a 23 per cent fall from the above-average yields estimated for 2015–16 of

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7.2 tonnes per hectare to 5.5 tonnes per hectare. The increased area sown is expected to more than offset lower yields, taking production 9 per cent higher from an estimated 205 000 tonnes to 235 000 tonnes.

The average price per tonne fell an estimated 9 per cent from $300 to $272 in the March quarter. This was partly in response to larger northern hemisphere coarse grain supplies.

Winter cereal grains

WheatForecast

The GVP for wheat is forecast to be around $360 million, 12 per cent below the estimate of $410 million made in the March quarter for the 2015 winter crop. This is primarily due to a lower price. The current GVP projection is 10 per cent below the average for the past 5 years.


The area sown is estimated to have increased to around 727 000 hectares, which is 15 per cent above the April 2016 estimate of 630 000 hectares. Despite this increase, the current area sown lies below the 10-year average of 822 000 hectares.19 This has been due to dry autumn conditions in South

Queensland, in addition to strong competition from chickpeas (which were attracting prices of around $900 per tonne at wheat planting time).

The first week of June saw significant rainfall in South West Queensland. Despite the rain falling later than hoped for, this spurred rapid plantings mid-June. Rain was light and patchy east of Miles on the Darling Downs, disappointing farmers. Yields are expected to fall 15 per cent from the previous season to around 2 tonnes per hectare due to lower soil moisture profiles in South Queensland. However, this still exceeds the 10-year average of around 1.6 tonnes per hectare. The yield estimate has been revised above the average due to significant rainfall at the end of August for many parts of South Queensland and Central Queensland.

Forecast lower yields are expected to slightly offset the increased area sown, reducing production marginally (2 per cent) to around 1 467 000 tonnes.

In the first week of July, the world wheat price hit the lowest level in a decade, losing $30 per tonne in Australian dollars, with futures falling to $254 per tonne. This was due to a forecast increase in global production of 7 million tonnes to 729 million tonnes, and higher than expected global stocks. Falling wheat prices have been a result of expected big crops in the United States, Europe and Black Sea countries (Russia and the Ukraine). Exacerbating declining wheat prices are increased corn acreages and yields in the United States, causing corn prices to fall significantly. This was despite hot and dry conditions in the United States during critical corn crop development periods over July and August. Reportedly the United States corn crop is still in good condition, increasing the prospect of large global coarse grain supplies. Despite the bearish global grain price conditions, domestic grain prices have been partly shielded by a devalued Australian dollar.

In late May to early June, the Queensland multigrade wheat price was around $295 per tonne, but by October this had peeled back $50 per tonne to be $245 per tonne at the Brisbane port (11 per cent lower than the March price estimate of $275 per tonne). Slightly lower projected Queensland

19 ABS, Agricultural commodities, Australia, cat. no. 7121, years 2005–06 to 2014–15.

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wheat


wheat production coupled with a lower price per tonne has brought the GVP forecast lower than for the previous season.

BarleyForecast

The GVP of barley for winter 2016 (2016–17 crop) is forecast to be $70 million, 24 per cent lower than the GVP estimated for the 2015–16 crop, mainly due to a significant fall in price, in addition to slightly smaller area sown and yields. However, the current forecast is 14 per cent above the average for the past 5 years.


Dry weather prevailed during planting in autumn and was followed by some good but patchy rain during the winter growing phase on the inner Darling Downs. In addition, chickpea prices were particularly strong, resulting in some land traditionally planted to barley and wheat being planted to

chickpeas. These two factors caused a small fall in area sown, by an estimated 3 per cent, from 115 000 hectares to 112 000 hectares. Also, due to the dry weather, yields are estimated to have fallen 6 per cent. This, coupled with smaller area sown, is expected to lead to a fall in production of 9 per cent from 357 000 tonnes to around 326 000 tonnes.

Due to large northern hemisphere supplies of white and coarse grains in 2016 (see Wheat on page 48), local barley prices have peeled back 17 per cent since the March quarter, from $258 per tonne to just $215 per tonne (Brisbane and Central Queensland track). Lower estimated production and price is expected to reduce GVP commensurately.

ChickpeasForecast

The GVP for chickpeas for 2016–17 (2016 winter crop) is forecast to be a record $793 million, nearly 70 per cent higher than that of the 2015 crop, which was valued at around $470 million. This is due to a record area sown, coupled with a high price maintained since the previous season. The current GVP forecast is around 4.4 times the average for the past 5 years. However, caution is required with this forecast, as October rainfall could downgrade expected yields.


Northern New South Wales chickpea growers reportedly received good 2016 summer and autumn rainfall, while

conversely, South Queensland chickpea paddocks received small and patchy rainfall, producing inconsistent soil moisture levels coupled with significant run-off. Although this restricted plantings from May to early June, good rainfall over the rest of June allowed plantings to proceed and so capitalise on high chickpeas prices (around $900 per tonne compared to an average of $500 per tonne since the June quarter of 2008–09).

Lower prices of competing winter crops (wheat and barley) made late planting of chickpeas (even in July) a viable option. However, above-average winter temperatures into June boosted crop

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yield potential, with planting dates spread from early April in Central Queensland (of deep-sown chickpeas) to mid-July in South and Central Queensland.

The area sown to desi chickpeas in Queensland is the biggest on record, estimated to have increased around 70 per cent to from 338 000 hectares to 570 000 hectares. Due to the patchy rainfall in South Queensland, yields are expected to remain the same as in 2015, taking production commensurately higher, to 933 000 tonnes.

The 2016 Indian monsoon season brought higher rainfall than in the previous two seasons, resulting in increased plantings and yields. This has caused chickpea prices to fall slightly since the June quarter from around $900 per tonne to $850 per tonne in the September quarter. However, higher than average price coupled with a record area sown is projected to take chickpea GVP to the highest on record, eclipsing the GVP of wheat and sorghum, which are traditionally Queensland’s largest value crops. However, this projection depends on the price not falling significantly in response to recovering chickpea supplies in India, Queensland’s biggest chickpea export market.


FisheriesForecast

The GVP for Queensland’s fisheries for 2016–17 is forecast to be $379 million, roughly the same as the estimate for 2015–16 but 3 per cent greater than the average for the past 5 years. The commercial fishing sector provides around 45 per cent of the forecast GVP at $170 million, while the aquaculture sector with $115 million and the recreational sector with $94 million20 provide 30 per cent and 25 per cent respectively.

The forecast GVP for Queensland’s aquaculture industry of $115 million is an increase of approximately 4 per cent increase from DAF’s final estimate for 2015–16, and is 13 per cent greater than the average for the past 5 years.


Commercial fisheries

The Queensland commercial fishing sector operates across a number of fisheries managed by agencies governed by both state and federal legislation.

Fisheries Queensland aggregates commercial catch data for the fisheries it manages on the basis of three main sectors:

• crustaceans (including prawns, bugs, crabs and tropical rock lobster)

• finfish (including inshore finfish and offshore finfish)

• molluscs (including scallops and squid).

According to the most recent data available, the GVP of commercial fisheries was $173 million in 2015–16. This is a significant decline from previous years (5 per cent), and is likely associated with a drop in total catch, as prices are relatively stable. There were declines in catches across the crab, prawn, inshore finfish and scallop sectors. Previous financial years were consistently above $190 million in total GVP.

Figures 21 and 22 indicate the output for fisheries managed by Fisheries Queensland for both major categories and subcategories for the last six financial years up to 2015–16.

20 Valued conservatively at the wholesale price of the retained catch. For more discussion of the valuation of recreational fishing, see page 53 of Queensland AgTrends 2014–15, <https://publications.qld.gov.au/storage/f/2014-11-27T00%3A59%3A40.326Z/queensland-agtrends-2014-15.pdf>.

https://publications.qld.gov.au/storage/f/2014-11-27T00%3A59%3A40.326Z/queensland-agtrends-2014-15.pdf

https://publications.qld.gov.au/storage/f/2014-11-27T00%3A59%3A40.326Z/queensland-agtrends-2014-15.pdf


2010–11

2011–12

2012–13

2013–14

2014–15

2015–16

0

5 000

10 000

15 000

20 000

25 000To

nnes

Crustaceans Finfish Molluscs Total

Financial year

Figure 21 Queensland fisheries total catch by major categories, 2010–11 to 2015–16

The total catch of the major fisheries has declined to some extent over recent financial years and by approximately 4.5 per cent in 2015–16. Catches in the major categories were generally lower in 2015–16, but finfish climbed marginally from 8800 tonnes to 9000 tonnes.

0

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es

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Crabs Other crustaceans Prawns Rock lobster Inshore finfishOffshore finfish Other fish Scallops Squid

Figure 22 Queensland fisheries total catch by subcategories, 2010–11 to 2015–16

Inshore finfish (6640 tonnes) and prawns (5160 tonnes) are significant contributors to the overall catch in Queensland, followed by crabs (2500 tonnes) and offshore finfish (2300 tonnes). Of the subcategories, there were increases in the catches for offshore finfish, rock lobster and squid. All other subcategories decreased from the previous financial year.


Figure 23 and 24 show the GVP for the same fisheries by major categories and subcategories. The GVP has not been adjusted for the impact of inflation on the purchasing power of the prices paid and received.

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Figure 24 Queensland fisheries GVP by subcategories, 2010–11 to 2015–16

Crustaceans were the greatest contributor to Queensland fisheries GVP ($105 million), followed by finfish ($65 million). Although the total catch of prawns (by weight) in any year, across subcategories, does not represent the largest contributor to the total catch (47 per cent, compared to inshore finfish at 50 per cent), it generally contributes much more than any other subcategory to


the GVP of fisheries in Queensland. Prawns contributed $60 million to the total GVP of $173 million, followed by offshore finfish at $36 million and inshore finfish at $29 million.

It is expected that the total catch will continue to trend downwards to an estimated 17 320 tonnes in 2016–17, a decline of 2.75 per cent for the year. A second round of licence buybacks and the introduction of net-free zones for inshore fisheries are expected to contribute to the decline, although some effort may be transferred to other fisheries sectors, such as crabbing.

Aquaculture

Prawn farming remains the largest sector of the Queensland aquaculture industry. This sector is expecting an increase in production from the previous season, with the farm-gate value of prawns predicted to reach $82.4 million. This is a 12.9 per cent increase on DAF’s estimated value for 2015–16 of $73.0 million.

Barramundi farming, the second largest sector, is expected to increase production from the previous season. In 2016–17 the sector is expected to achieve a value of about $30.0 million. This is a 15.4 per cent increase on DAF’s estimated value for 2015–16 of $26.0 million.

The freshwater fish sector (primarily silver perch, Murray cod and jade perch) is expected to be valued at $1.6 million. This is a 33 per cent decrease on DAF’s estimated value for 2015–16 of $2.4 million.

The redclaw, oyster and hatchery sectors are expected to increase slightly on the production levels achieved in 2015–16.


ForestryForecast

The GVP for the forest-growing sector of the Queensland forest industry for 2016–17 is forecast to be $260 million. This is 7 per cent higher than DAF’s final estimate for 2015–16 and 38 per cent higher than the average for the past 5 years.

DAF forecasts that the first-stage processing sector of the Queensland forest industry will contribute $536 million to the Queensland economy in 2016–17; this is 7 per cent higher than the previous year’s estimate. Together, the forest-growing and first-stage processing sectors are forecast to contribute $796 million to the Queensland economy in 2016–17.


The higher forecast GVP for the forest-growing sector for 2016–17 reflects an anticipated increase in the value of softwood sales in both the domestic market and exports through the Port of Gladstone. Exports are expected to account for nearly a quarter of the volume of Queensland-produced plantation softwood sold in 2016–17. Softwood exports through the Port of Gladstone commenced early in 2015 as part of a substantial salvage harvesting operation following extensive damage to the exotic pine plantation estate at Byfield from Tropical Cyclone Marcia.

The volume of state-owned native forest log timber production in 2016–17 is forecast to be slightly less than that for 2015–16. Actual sales of state-owned native forest cypress and hardwood log timber as reported by DAF were approximately 252 000 cubic metres for 2015–16, a 10 per cent decrease from the estimated 279 000 cubic metres sold in 2014–15.

Although no reliable data is available for private native forest production, anecdotal evidence suggests that approximately 50 per cent of hardwood timber is sourced from privately owned native forests. It is expected that demand for hardwood log timber from privately owned land will remain strong for the foreseeable future, with the harvest volume remaining stable or increasing slightly in 2016–17.

The prospects for the forest and timber industry largely reflect the activity in the housing and construction sector, which accounts for most of the demand for domestically produced timber in Queensland. Record dwelling commencements in Queensland of around 46 000 were recorded in 2015, and building activity has remained strong in 2016. The Housing Industry Association (HIA) reported that dwelling commencements increased by 13 per cent in Queensland in the 12 months to March 2016. However, the BIS Shrapnel report Building in Australia 2016–2031 warns that the record dwelling commencements will ease in the next year or two and there is expected to be an oversupply in the multi-residential market. This will result in a decline in new building activity post 2016.

Sawn timber production in Queensland is also impacted by the balance of imports and exports of wood products. Although only provisional 2015–16 information is available, overseas trade data shows a modest 8 per cent increase in the value of manufactured wood product imports over 2014–15. For the same period, exports of manufactured wood products and pulp and paper products increased by approximately 10 per cent. There has also been a significant increase in the value of overseas exports of log material in the period as a result of the salvage operation at Byfield.


Before September 2007, Prospects (now published as AgTrends) used the reported turnover of Australian and New Zealand Standard Industrial Classification (ANZSIC) Group 231 (Log sawmilling and timber dressing), as defined and measured by the ABS in their survey of manufacturing, as an indicator of the gross value of forest industry activity in Queensland. However, while this survey does separately report the forest-growing sector, it excludes some elements of the first-stage processing sector and also contains some double-counting.

AgTrends now uses data produced by ABARES in its twice-yearly publication Australian forest and wood products statistics. This publication gives the value of log production (gross value of logs delivered to the sawmill door or wharf gate) as an estimate of the gross value of the forest-growing sector in Queensland. This, together with estimates of the value added to intermediate inputs from ANZSIC Group 231 and ANZSIC Code 2321 (Plywood and veneer manufacturing), provides an overall estimate of Queensland forest industry activity.

A note about forest industry data sources


Press reports about the increasing price of beef raised questions about the impact of this on Australian consumers. In general, different types of meat, fish and other proteins are substituted by consumers, so this overview of consumption trends may address some concerns about the impact of the rising beef price.

The Australian meat consumption pattern has changed significantly over the past 40 years, but the total consumption has been relatively stable (see Figure 25). Australian consumers have increased their consumption of poultry meat and pork at the expense of beef, veal, mutton and lamb.

According to the FAO, in 2015–16, Australians ate around 23.4 kilograms of beef and veal per person. This was a decrease of 3 kilograms per person from the previous year and put Australia behind Uruguay, Argentina, Paraguay, the United States and Brazil in beef and veal consumption per capita. In 2005–06 Australia’s per capita consumption of beef and veal was 38.1 kilograms, and in the late 1970s it peaked at 70.3 kilograms. The decline, however, is in line with similar trends in other western countries in response to the relative costs of alternative proteins and changing demographics.

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Figure 25 Meat consumption in Australia, 1974 to 2016

Special feature: Meat consumption trends in Australia


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Figure 26 World meat consumption, 2015–16

Source: FAO, 2016.

A recent IBISWorld report states that since 2007, annual seafood consumption has remained between 18 and 19 kilograms per person, but it expects that seafood consumption will rise to 19.6 kilograms per capita by 2021. However, according to IBISWorld, this will not be matched by growth in Australia’s fishing industries (which include prawns, rock lobster, crabs, octopus and scallops) and aquaculture industries (which include salmon, trout, oysters and crustaceans). These sectors are forecast to grow annually by only 0.9 per cent and 2.7 per cent respectively from 2015 to 2021, despite the increase in consumption.

IBISWorld claims that the reasons for the predicted increase in consumption are the ongoing rise in disposable incomes and health consciousness, coupled with growing awareness of the specific health benefits of certain types of fish and seafood (particularly salmon). Depleting fish stocks, imports, catching quotas and increasing operating costs are given as reasons why the seafood industry is not expected to grow at the same rate as consumption.

References

IBISWorld 2016, Fishing in Australia: industry report, February 2016. IBISWorld 2015, Seafood retailing in Australia, August 2015. MLA 2016, Fast facts: Australia’s beef industry 2016. OECD & FAO 2016, OECD–FAO Agricultural outlook 2016–2025.

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Figure 27 World seafood and other meat consumption, 2007 to 2014

Special feature: Meat consumption trends in Australia (cont'd)


Queensland’s nursery industry is comprised of production and service sectors. Production nurseries are located near key markets (including metropolitan retail outlets) and near other horticultural production areas. Access to water and labour is crucial to business success. Because of this, a large number of production nurseries have been established in South East Queensland, as well as in the vicinity of regional centres along the Queensland coast.

Production nurseries make a significant contribution to the Queensland economy each year—the forecast value of the industry for 2016–17 is $898 million. The industry has continued to strengthen during periods of climatic and market uncertainty, shown by the rise in GVP over time. The strength of the industry has been its ability to adapt and create efficiencies along the supply chain. It is reported by industry that production nurseries employ approximately 4500 people in 1000 small to medium-sized businesses.

Queensland adds considerably to the national volume of nursery stock grown, being home to the second largest number of production nurseries in Australia (according to Plant Health Australia). Nursery stock is sold both locally and interstate with both markets currently in a strong position. The retail sector is driving this growth and is expected to account for approximately 44 per cent of production during 2016–17. Consumers with increased awareness of environmental management through public programs and initiatives have driven demand for retail ‘greenlife’ products. The diversity of plant products available has ensured that every application is catered for through a mix of retail providers. This has resulted in everyday consumers having ready access to affordable products.

Queensland’s production nurseries do not just service the retail sector but also supply the landscape, fruit and vegetable, forestry and revegetation sectors. The stock produced by Queensland’s production nurseries can be categorised as:

• retail stock—plant stock for independent garden centres, supermarkets and big-box hardware stores

• landscape stock—plant stock for domestic and commercial landscaping

• fruit and vegetable stock—rootstocks and tree varieties for commercial fruit growers and seedlings for commercial vegetable growers

• forestry stock—tree seedlings for hardwood and softwood forestry plantations and farm forestry programs

• revegetation/rehabilitation stock—tree and shrub seedlings for the revegetation of the natural landscape and reclamation of mine sites and contaminated land.

Plant stock produced by production nurseries is the foundation of our horticulture and forestry industries. It is the starting point from which our food is grown and timber for our buildings is planted. The quality of the stock impacts production efficiencies and end-of-line product quality for those industries. Businesses also supply stock to produce the greenscapes in many of our urban centres, as well as for regeneration purposes, to improve environmental health and enhance community wellbeing.

Special feature: Queensland’s production nurseries


• Gross value of commodities produced is a measure of economic output.

• Estimates of the gross values of Queensland agricultural production are calculated and published at the state level by the ABS. Presently, the ABS publishes estimates for most agricultural commodities twice a year.

• A preliminary estimate for a particular financial year is published approximately 4 months after the end of that year. The second (final) estimate is published approximately 12 months after the preliminary estimate.

• Estimates of the gross value of Queensland’s fisheries production are available from DAF.

• All estimates provided in this publication are in nominal dollar values unless otherwise stated.

Notes


Definitionscrops field and horticulture crops

fisheries trawl and non-trawl fishing, and aquaculture

forestry log sawmilling and timber dressing

gross value of commodities produced the value of recorded production at wholesale prices realised in the marketplace (e.g. cattle sold for slaughter and sugar cane at the mill)

livestock disposals cattle, sheep, pigs, poultry, kangaroos and other live animals sold for slaughter, plus live exports minus live imports

livestock products eggs, milk, wool and honey

marketplace generally, the metropolitan market in each state and territory (where commodities are consumed locally, or where they become raw material for a secondary industry); for exports, marketplace prices are generally free-on-board prices

value added the value of the output produced minus the costs of the intermediate goods

Queensland AgTrends 2016–17 Forecasts and trends in Queensland agricultural, fisheries and forestry production

www.daf.qld.gov.au

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Queensland AgTrends 2016–17 - Publications · Queensland AgTrends 2016–17 Forecasts and trends in Queensland agricultural, fisheries and forestry production Department of Agriculture