Agricultural commodity update

November 2017

Dr Rohan NelsonMatt Miller, Sarah Smith, Jack Mullumby, Andrew Cameron, Ben Agbenyegah, Amelia Brown, Peter Martin, Dale Ashton, Nathan Pitts, Peter Berry, Lisa McKelvie, Matt Howden and Kirk Zammit

Australian Bureau of Agricultural and Resource Economics and Sciences

Overview

Source: ABC

2017–18 $b

20

40

60

80

2003–04 2007–08 2012–13 2017–18f

Livestock

Crops

f ABARES forecast

Value of agricultural production to fall…

9%

… driven by lower crop production…Forecast change in value of agricultural production, 2017−18

… which flows through to exports

Forecast change in value of agricultural exports, 2017−18

Winter rainfall

2016 2017

Spring rainfall

October November – month to date

Crops

Source: agriculturewire.com

World wheat supply and price

2017-18 $US/t

150

200

250

300

350

400

450

Mt

200

400

600

800

1,000

1992-93 1997-98 2002-03 2007-08 2012-13 2017-18f

Opening stocks

Production

World indicatorprice (right axis)

World climate conditions have been mixed

Source: Agricultural Market Information System

August 2017

Mt 50 100 150 200

Argentina

Australia

Canada

United States

India

Black Sea region

China

European Union

2016-172017-18f

Markets:production

Competitors:production

Wheat production, major producers

100

120

140

160

180

200

220

240

260

280

Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17

US no.2 yellowcorn, fob Gulf

France feed barley,fob Rouen

US$/t

World coarse grain prices

Oilseed supplies and price

Chart1

2006-072006-072006-07

2007-082007-082007-08

2008-092008-092008-09

2009-102009-102009-10

2010-112010-112010-11

2011-122011-122011-12

2012-132012-132012-13

2013-142013-142013-14

2014-152014-152014-15

2015-162015-162015-16

2016-172016-172016-17

2017-18f2017-18f2017-18f

Production

Opening stocks

Oilseeds indicator price (right axis)

405.73

66.835

314.2796667533

391.278

75.223

506.4734034603

399.077

63.123

475.8122842234

447.177

57.952

441.8196430402

461.012

75.339

540.4031203047

447.393

85.271

539.1131242915

474.533

66.507

624.6658027856

503.533

67.792

564.334488813

536.869

77.668

428.3338250275

522.5005736826

93.41

378.9763628243

568.3360070394

88.577

384

569.2174233

105.3009113494

363

Sheet1

ProductionOpening stocksOilseeds indicator price (right axis)Supply

2006-07405.766.835314.2796667533472.565

2007-08391.375.223506.4734034603466.501

2008-09399.163.123475.8122842234462.2

2009-10447.257.952441.8196430402505.129

2010-11461.075.339540.4031203047536.351

2011-12447.485.271539.1131242915532.664

2012-13474.566.507624.6658027856541.04

2013-14503.567.792564.334488813571.325

2014-15536.977.668428.3338250275614.537

2015-16522.593.41378.9763628243615.9105736826

2016-17568.388.577384656.9130070394

2017-18f569.2105.3009113494363674.5183346493

Australian winter crop production

Mt

20

40

60

Australia New SouthWales

Queensland Victoria SouthAustralia

WesternAustralia

2016-17estimate2017-18 forecast

10-year averageto 2015-16

36

Climate since September…

Record heat – 24 SeptemberFrost – late August

Flowering Grain fillingImpact on:

Soil water at 1 November Probability of exceeding mediansorghum yield

Prospects for summer crops

$/t del.

50

100

150

200

250

300

350

400

Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17

Feed Wheat(Darling Downs)

Feed Wheat(Geelong)

Strong domestic feed demand

World cotton markets, excluding China

2017–18 USc/lb

25

50

75

100

125

Mt

5

10

15

20

25

Production

Stocks

World Price (right axis)

Australian gin gate price

2017–18 $A/bale

420

440

460

480

500

520

540

2011–12 2013–14 2015–16 2017–18f2017–18 USc/lb

70

75

80

85

90

95

100

US c/lb A$/bale

Source: Olam, Queensland Cotton, ABARES

Cotton industry forecasts 2017–18f

f ABARES forecast

Australian production 2%

Gin-gate return3%

Australian exports 23% GVP1%

Livestock

Source: ABC

http://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjf8YCp48TWAhXmjFQKHVL6COYQjRwIBw&url=http://www.abc.net.au/news/2015-10-16/roma-yards/6859296&psig=AFQjCNFtHR7yM8Z5l7N2ULZSeD0O_9SghQ&ust=1506581421360559http://www.google.com.au/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjf8YCp48TWAhXmjFQKHVL6COYQjRwIBw&url=http://www.abc.net.au/news/2015-10-16/roma-yards/6859296&psig=AFQjCNFtHR7yM8Z5l7N2ULZSeD0O_9SghQ&ust=1506581421360559

Value of livestock production

$ million

Forecast change in value of livestock production, 2017−18

2017-18 c/kg

200

400

600

800

1,000

2001-02 2005-06 2009-10 2013-14 2017-18f

Australian saleyard price

US cow 90CL (cif)

Japan - chilled grassfed fullset (cif)

Beef prices and export indicators

Australia’s frozen beef exports to the US

Chart1

2011-122011-122011-122011-12

2012-132012-132012-132012-13

2013-142013-142013-142013-14

2014-152014-152014-152014-15

2015-162015-162015-162015-16

2016-172016-172016-172016-17

2017-18f2017-18f2017-18f2017-18f

US beef production

Column1

Column2

Exports to United States(right axis)

11784.8191112

205

11723.3573952

209

11377.1306216

263

10759.6104728

470

11021.378416

336

11700.5417176

204

12394.4014

260

Sheet1

US beef productionColumn1Column2Exports to United States(right axis)

2011-1211785205

2012-1311723209

2013-1411377263

2014-1510760470

2015-1611021336

2016-1711701204

2017-18f12394.4014260

kt (sw)

200

400

600

800

1999-00 2002-03 2005-06 2008-09 2011-12 2014-15 2017-18f

OtherUnited StatesAustralia

Japan – beef imports by country of origin

BSE

China – imports of beef

kt (sw)

100

200

300

400

500

600

700

800

2011 2012 2013 2014 2015 2016 2017f

Australia

Rest of worldEntry ofCanada

Entry ofArgentina

Entry ofBrazil

Entry ofthe US

Australian wool exports by destination

kt

100

200

300

400

500

600

2006-07 2008-09 2010-11 2012-13 2014-15 2016-17s

Other

Italy

Czech Republic

Republic of Korea

India

China

China retail sales of garments (all fibres)

billion Yuan

100

200

300

400

500

600

700

2007-08 2009-10 2011-12 2013-14 2015-16

Source: National Bureau of Statistics, China

Wool production and prices

2017–18 c/kg

400

800

1200

1600

2000

million t

100

200

300

400

500

2007-08 2009-10 2011-12 2013-14 2015-16 2017-18f

Production EMI (2017-18 c/kg) (right)

200

300

400

500

600

700

800

Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17

Trade

Restocker

Destocking, dry period

Monthly lamb prices NSW

Restocking

Dry winter2017

Wet period2016

2012 - 2013

Are wool prices the highest on record?

Are wool prices the highest on record?

0

500

1000

1500

2000

2500

3000

1977-78 1982-83 1987-88 1992-93 1997-98 2002-03 2007-08 2012-13 2017-18f

EMI

EMI ($2017-18)

Median

Thanks to: John Ives, Talaheni

EMI in $2017-181974-75 to 2017-18

0

5

10

15

20

25

0 500 1000 1500 2000 2500 3000 3500

2017-18f1550 c/kg

Farm cash incomesNthn Tablelands and NW Slopes and Plains

–100

2016–17 $’000

100

200

300

400

500

1996-97 2000-01 2004-05 2008-09 2012-13 2016–17 y

Grains

Sheep

Beef

Total capital valueNW slopes & plains

Index 2000-01 = 100

50

100

150

200

250

2000–01 2003–04 2006–07 2009–10 2012–13 2015–16p

Agricultural Commodities: September 2017

Australian Crop Report:September 2017

Latest publications:

http://www.agriculture.gov.au/abares/publications

http://www.agriculture.gov.au/abares/publications

agriculture.gov.au/abares

Slide Number 1OverviewSlide Number 3Slide Number 4Slide Number 5Slide Number 6Slide Number 7CropsSlide Number 9Slide Number 10Slide Number 11World coarse grain pricesSlide Number 13Slide Number 14Slide Number 15Slide Number 16Slide Number 17World cotton markets, excluding ChinaAustralian gin gate priceSlide Number 20LivestockSlide Number 22Slide Number 23Australia’s frozen beef exports to the USJapan – beef imports by country of originChina – imports of beefAustralian wool exports by destinationChina retail sales of garments (all fibres)Wool production and pricesMonthly lamb prices NSWAre wool prices the highest on record?Are wool prices the highest on record?EMI in $2017-18�1974-75 to 2017-18 Farm cash incomes�Nthn Tablelands and NW Slopes and PlainsTotal capital value�NW slopes & plainsSlide Number 36agriculture.gov.au/abaresLive exportsLive exports by destinationWool in world marketsJapan consumption of beefSlide Number 42Slide Number 43Slide Number 44