National and international issues affecting New South Wales

Dr Steve Hatfield-DoddsExecutive Director

Australian Bureau of Agriculturaland Resource Economics and Sciences

15 November 2017

ForecastingStatistics Analysis

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

World economic growth

a ABARES assumption. b includes China.

Chart1

3.2113.51312709773.6285276418

1.6592.07832358091.9975425218

4.3274.46776159564.7137020815

6.76.76.4

2016

2017a

2018b

Sheet1

20162017 a2018 bWorldOECDEmerging bChina

World3.2113.51312709773.628527641820163.21.74.36.7

OECD1.6592.07832358091.99754252182017a3.52.14.56.7

Emerging b4.3274.46776159564.71370208152018b3.62.04.76.4

China6.76.76.4

Sheet1

2016

2017a

2018b

Australian dollar has fallen and is assumed to stay relatively low

201718: US77c

Parity

10 year average: US88c

a ABARES assumption.

Gross value ofproduction

Value of agricultural production and exports

f ABARES forecast.

Value of exports

Value of agricultural production and exports

f ABARES forecast.

Gross value ofproduction

Major Australian agricultural exports

S ABARES estimatef ABARES forecast.

Long term trends shaping Australian agriculture

Output markets and consumer demand

Technology development and uptake

Input markets and structural change

Societys expectations of farmers

Climate change

Maintaining competitiveness is keyTotal factor productivity and farmer terms of trade 1977 to 2014

0

50

100

150

200

250

300

1977

78

1980

81

1983

84

1986

87

1989

90

1992

93

1995

96

1998

99

2001

02

2004

05

2007

08

2010

11

2013

14

Total factorproductivity

Farmer termsof trade

Index197778=100

%

30

60

90

million

500

1000

1500

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

Urban high-income

Urban middle-income

Rural

Urban populationshare (right axis)

Output markets and consumer demandChina population by income and urban share, 1950-2050

Output markets and consumer demand

0 2 4 6 8 10

Vegetables

Sugar

Sheep and goat meat

Dairy

Cereals

Starches

Fruit

Beef

$US billion (2009 terms)

20502009

China food imports 2009 and 2050

source: WTO 2016

Value of agricultural exports, 2014

Output markets and consumer demand

Technology development and uptake

TFP Index255075

100125150175200225250275300325350

1961

1964

1967

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

BrazilChinaAustralia

Agricultural productivity index comparison

Technology development and uptakeValue of Australian rural R&D funding

Includes agriculture, forestry and fisheries, related inputs and downstream processing

12%

60%

31%

201415 $m

800

1,600

2,400

3,200

Private funding Public funding

total

public

private

INCREASE 2005-06 to 2014-15

Structural change in farming

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Large farms

Medium farms

Small farms

Share of farm numbers Share of output

1978-1980 1978-19802014-2016 2014-2016

Share of farm numbers and output by farm size 1978-1980 and 2014-2016

Society's expectations of farmers

Climate change: Adaptation

Climate change: new market opportunities and challenges

Source: Figure 14, CSIRO (2015) Australian National Outlook

agriculture.gov.au/abares

Slide Number 1Slide Number 2Slide Number 3Slide Number 4Slide Number 5Slide Number 6Major Australian agricultural exportsLong term trends shaping Australian agricultureSlide Number 9Slide Number 10Output markets and consumer demandSlide Number 12Technology development and uptakeTechnology development and uptakeStructural change in farming Slide Number 16Climate change: AdaptationClimate change: new market opportunities and challenges agriculture.gov.au/abaresEffect of climate on productivity growthEffect of climate on productivity growthEffect of climate on productivity growth