Rural Bank report: Grain drives record ag exports in top 12 markets

Chinese buyers led a 50pc lift in Australia's overall farm sector exports above the five-year average during last financial year, according to latest numbers crunched by Rural Bank.

Victoria again took the crown as Australia's leading export state after a big year nationally for farm sector production.

Output was exemplified by a whopper grain crop, particularly in the west where export grain value grew 43pc, helping lift West Australia into second spot, overtaking NSW.

The total value of Australian farm export sales reached almost $80b in 2022-23.

For the second year running, China pushed Japan and the US to second and third places respectively on the market performance table.

Yet, Australia's top 13 export markets all recorded year-on-year growth, and the leading 12 all hit record highs.

Although the current financial year's shrinking crop output would coincide with lower agricultural commodity prices worldwide, subsequently cutting forecast farm export volumes and values well below the past two record years, Rural Bank tipped demand from hungry China and other growing customers such as Vietnam and Indonesia would still make 2023-24 our third most valuable export year ever.

The Australian Bureau of Agricultural and Resource Economics and Sciences' last week forecast 2023-24 farm export values would be about $52b, or near to average.

Rural Bank noted the offshore sales value decline would primarily be due to less crop area planted and lower yields, with current estimates suggesting a 34pc slide in winter crop production compared to last season.

Grain was last year's biggest export performer, increasing in value by 30pc to be worth $31b.

China's relaxation of some of its contentious import restrictions during the past year also enabled a growth rebound in beef and cotton exports contributing notably to its total $16.6b ag trades bill from Australia - up $3.1b on 2021-22 figures.

However, it was Chinese hunger for our wheat which made the most impact, representing a 66pc jump, worth $1.5b.

Substantial global wheat price rises and bigger volumes available for export fuelled more sales to other export destinations, too.

Wheat contributed largely to the Vietnamese, South Korean, Indonesian and Thai markets all growing their imports of Australian produce by more than $1b each.

In fact, Vietnam became Australia's fourth biggest farm products customer, with a 53pc jump in value to $1.8b, largely due to strong wheat and cotton export growth.

"Cotton exports worldwide were another particular bright spot," observed Rural Bank's head of agribusiness development, Andrew Smith.

"They more than doubled in value to $4.9b, up $2.7b from the year before.

"Like cotton, increased beef production helped drive a rise of $726 million in the value of cattle industry exports."

Rural Bank's report said with the cattle herd rebuilt after drought, the volume of beef exports had returned above 1 million tonnes for the first time since 2019-20.

However, the 8pc rise in cattle export earnings last year to $13b was primarily driven by a greater volume of beef sales, particularly to China and the US, while average export prices remained stable.

It forecast more earnings growth from offshore beef customers, to record highs, this financial year because of ongoing production increases and strong global demand, particularly from the US while its herd was rebuilding.

Sheepmeat exports fell $105m in value to total $4.8b, weakened by softer consumer demand and increased supplies undermining the trade price, which was likely to continue to mean another slight decline in 2023-24 returns.

Wool exports were also down about 2pc, or $74m, to $3.2b, again due to weaker demand and lower prices which more than offset an increase in volume.

Weaker prices were tipped to hit wool export values again in the current trading year.

Dairy sector exports fell in value by $96 million to $3.1b, but were still at their third highest value point on record, thanks to record average export prices early in the year.

Easing global markets, increased global production and high Australian farmgate milk prices would see Australian dairy export returns decline this year.

The value of horticultural exports rose 11pc to $2.8b, largely because of increased grape and nut sales and rising production volumes.

Overall horticultural returns were set to keep rising on the back of strong production forecasts for key export varieties and improving quality.

In a state-by-state comparison, Victoria continued to lead the tally as Australia's largest value exporter with a $1.3b, or 8pc, rise to a record $19b, accounting for 24pc of national agricultural offshore sales returns.

Gain crops, horticulture, and beef were the major growth drivers.

WA was the largest growth state, lifting its export values $4b, or 33pc, to a record $16b, primarily on the back of crop sales, up 23pc, which followed a 78pc rise the previous year.

WA also had growth in seafood, sheep and beef exports.

NSW saw an $830m, or 7pc, rise to a record $13b, driven by more crop and wool exports, but it wasn't enough to stop WA jumping ahead and relegating the eastern state to third place.

Queensland retained its position in fourth, having slipped from the third spot a year before, although its exports grew in 2022-23, up $2b, or 18pc to $12.5b thanks to strong crop and cattle industry exports.

Cattle, the largest source of agricultural export value in Queensland, accounted for 57pc of the state's exports.

South Australian export value beat its 2021-22 record, up $1.4b, or 19pc to $9b, mainly driven by cropping returns where exports lifted $1.4b, or 36pc to $5b.

Wine remained SA's second largest export industry, but saw a fourth consecutive year of decline.

Also declining were Tasmania's overall export numbers, down $17m to $1b, led by dairy exports falling $71m, or 26pc, but seafood and horticulture exports lifted.

Northern Territory's agricultural export value also declined for a third consecutive year, down 5pc to $392m, the lowest for the territory since 2013-14 because of cattle exports, down $54m, or 13pc, in 2022-23.