Queensland AgTrends 2019–20 Forecasts and trends in Queensland agricultural, fisheries and forestry production DAF1068 11/19

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 • the Australian Bureau of Agricultural and Resource Economics and Sciences • the Australian Bureau of Statistics • Meat and Livestock Australia • the United States Department of Agriculture • 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, the Wool Production Forecasting Committee, Queensland Sugar Limited and the Housing Industry Association • market commentators and industry media including ABC Rural, Queensland Country Life, Farmonline, Rabobank, IBISWorld, The Land and Beef Central.

© State of Queensland, 2019.

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 4.0 International (CC BY 4.0) 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 as the source of the publication.

For more information on this licence, visit creativecommons.org/licenses/by/4.0.

The information contained herein is subject to change without notice. The Queensland Government shall not be liable for technical or other errors or omissions contained herein. The reader/user accepts all risks and responsibility for losses, damages, costs and other consequences resulting directly or indirectly from using this information. Contents

Figures ...... iii Tables...... iv Acronyms...... v Summary of key findings ...... 1 Total value of Queensland’s primary industries...... 1 Gross value of production (‘farm gate’)...... 1 Livestock industries...... 1 Crops...... 2 Fisheries...... 2 Forestry...... 2 First-stage processing ...... 3 This edition of Queensland AgTrends ...... 4 Total 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...... 7 Our vision...... 7 Our purpose...... 7 Our objectives...... 7 Strategic opportunities...... 7 Strategic risks...... 7 About Queensland AgTrends ...... 8 About the AgTrends update...... 8 Contact ...... 8 Content and procedure...... 8 Climate outlook for November 2019 to January 2020...... 10 Drought situation...... 12 World and Australian economic environment...... 13 Primary industries—estimates and forecasts...... 17 Volume of production index...... 20

Queensland AgTrends 2019–20 i Livestock disposals...... 22 Cattle and calves...... 22 Poultry...... 30 Pigs...... 32 Sheep and lambs...... 33 Livestock products ...... 34 Milk...... 34 Eggs...... 35 Wool...... 37 Crops...... 38 Horticulture crops ...... 38 Fruit and nuts...... 38 Vegetables ...... 42 Other vegetables...... 43 Lifestyle horticulture...... 44 Production nurseries...... 44 Turf...... 45 Cut flowers...... 45 Other crops...... 46 Sugarcane...... 46 Cotton ...... 47 Other major field crops...... 49 Peanuts...... 49 Soybeans...... 49 Summer cereal grains ...... 50 Grain sorghum...... 50 Maize...... 50 Winter cereal grains...... 51 Wheat...... 51 Barley...... 52 Chickpeas...... 52 Mung beans...... 53 Fisheries...... 54 Forestry ...... 57 Special feature: Developing winged-pearl oyster farming for Aboriginal and Torres Strait Islander communities...... 59 Notes...... 60 Definitions ...... 60

Queensland AgTrends 2019–20 ii Figures

Figure 1 Chance of exceeding the median rainfall for November 2019 to January 2020...... 10 Figure 2 Chance of exceeding the median growth for October to December 2019...... 11 Figure 3 Drought-affected areas in Queensland, September 2019...... 12 Figure 4 FAO food price index, 2016 to 2019...... 15 Figure 5 FAO food commodity price indexes, 2018–19...... 15 Figure 6 FAO food price index, 1961 to 2019...... 16 Figure 7 Volume of production index for Queensland’s major agricultural categories, 1996–97 to 2019–20...... 21 Figure 8 Queensland cattle and calf slaughterings, 2004–05 to 2019–20...... 23 Figure 9 Total cattle and calf numbers, Queensland and Australia, 2007–08 to 2017–18...... 24 Figure 10 Percentage share of total slaughter for cattle and calves and cows and heifers, Queensland, 2002–03 to 2018–19 ...... 25 Figure 11 EYCI, 2010 to 2018...... 26 Figure 12 Over-the-hook price indicators, 2010 to 2019...... 26 Figure 13 Australian exports of beef and veal, 2018–19...... 27 Figure 14 Queensland exports of beef and veal, 2018–19...... 27 Figure 15 Queensland cattle on feed and feedlot capacity, 2011 to 2019...... 28 Figure 16 Queensland live cattle exports, 2008–09 to 2018–19...... 29 Figure 17 Queensland live cattle exports by country of destination, 2008–09 to 2018–19 ...... 29 Figure 18 Queensland poultry production, 2010–11 to 2019–20...... 30 Figure 19 Poultry varieties in Australia, 2018–19...... 31 Figure 20 Queensland pig production, 2010–11 to 2019–20...... 32 Figure 21 Queensland sheep and lamb saleyard prices and slaughterings, 2010–11 to 2019–20...... 33 Figure 22 Queensland egg production, 2010–11 to 2019–20...... 35 Figure 23 Australian egg production types, in terms of industry revenue, 2018–19...... 36 Figure 24 Queensland wool GVP and the EMI, 2010–11 to 2019–20...... 37 Figure 25 Stored volumes in major Queensland irrigation dams, September 2018 and 2019 ...... 47 Figure 26 Queensland fisheries total catch by major categories, 2012–13 to 2016–17...... 54 Figure 27 Queensland fisheries current GVP by major categories, 2012–13 to 2016–17...... 55 Figure 28 Queensland fisheries catch by subcategories, 2012–13 to 2016–17...... 55 Figure 29 Queensland fisheries current GVP by subcategories, 2012–13 to 2016–17...... 55 Figure 30 Queensland fisheries total catch trend analysis, 2012–13 to 2021–22...... 56

Queensland AgTrends 2019–20 iii Tables

Table 1 Livestock disposals GVP, 2019–20...... 1 Table 2 Livestock products GVP, 2019–20...... 1 Table 3 Fruit and nuts and vegetables GVP, 2019–20...... 2 Table 4 Lifestyle horticulture GVP, 2019–20...... 2 Table 5 Other crops GVP, 2019–20...... 2 Table 6 Cereal grains GVP, 2019–20...... 2 Table 7 Forecast value of first-stage processing, 2019–20...... 3 Table 8 IMF World economic outlook projections for gross domestic product...... 14 Table 9 GVP, first-stage processing and total primary industries estimates and forecasts, 2016–17 to 2019–20...... 17 Table 10 Volume of production index for Queensland’s major agricultural commodities...... 20 Table 11 Production nurseries GVP by sector, 2019–20...... 44 Table 12 World production of cotton, 2018–19 and 2019–20...... 48

Queensland AgTrends 2019–20 iv Acronyms

ABARES 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 ASEAN-5 Association of Southeast Asian Nations’ five strongest economies (Indonesia, Malaysia, the Philippines, Thailand and Vietnam) CCS commercial cane sugar DAF Department of Agriculture and Fisheries EMI Eastern Market Indicator EYCI Eastern Young Cattle Indicator FAO Food and Agriculture Organization of the United Nations GVP gross value of production IMF International Monetary Fund IPS international polarity scale MLA Meat and Livestock Australia OECD Organisation for Economic Co-operation and Development SA2 statistical area level 2 USDA United States Department of Agriculture

Queensland AgTrends 2019–20 v Summary of key findings

Total value of Queensland’s primary industries For 2019–20, the total value of Queensland’s primary industry commodities (combined gross value of production and first-stage processing) is forecast to be $17.80 billion, 5 per cent less than for 2018–19 and 6 per cent less than the average for the past 5 years.

Gross value of production (‘farm gate’) For 2019–20, the gross value of production (GVP) of Queensland’s primary industry commodities at the ‘farm gate’ is forecast to be $13.94 billion, 5 per cent less than for 2018–19 and 7 per cent less than the average for the past 5 years.

Livestock industries The 2019–20 GVP forecasts for livestock industries are shown in Tables 1 and 2.

Table 1 Livestock disposals GVP, 2019–20

Industry Forecast GVP ($m) Percentage change since 2018–19 Cattle and calves 5137 –6 Poultry 573 1 Pigs 242 12 Other livestock 42 5 Sheep and lambs 17 2

Table 2 Livestock products GVP, 2019–20

Industry Forecast GVP ($m) Percentage change since 2018–19 Eggs 239 5 Milk (all purpose) 170 –15 Wool 85 0

Queensland AgTrends 2019–20 1 Crops The 2019–20 GVP forecasts for crops are shown in Tables 3–6.

Table 3 Fruit and nuts and vegetables GVP, 2019–20

Industry Forecast GVP ($m) Percentage change since 2018–19 Fruit and nuts 1927 1 Vegetables 1222 –4

Table 4 Lifestyle horticulture GVP, 2019–20

Industry Forecast GVP ($m) Percentage change since 2018–19 Nurseries 939 2 Turf 327 0 Cut flowers 161 0

Table 5 Other crops GVP, 2019–20

Industry Forecast GVP ($m) Percentage change since 2018–19 Sugarcane 1020 –6 Cotton 237 –58

Table 6 Cereal grains GVP, 2019–20

Industry Forecast GVP ($m) Percentage change since 2018–19 Grain sorghum 356 7 Wheat 205 10 Other cereal grains 132 –2 Chickpeas 83 –39 Maize 72 1 Barley 28 –20

Fisheries The GVP for Queensland’s fisheries for 2019–20 is forecast to be $405 million.

In this edition, recreational fishing, which is an important part of Queensland’s fisheries, is included in the forecast for 2019–20 with an estimated value of $94 million. The values of commercial fishing and aquaculture are forecast to be $181 million (the same as for 2018–19) and $130 million (8 per cent greater than for 2018–19).

Forestry The GVP for the forest-growing sector of Queensland’s forest industry for 2019–20 is forecast to be $283 million, 1 per cent greater than for last year. This translates into a value of $484 million for the first-stage processing sector.

Queensland AgTrends 2019–20 2 First-stage processing For 2019–20, the value of first-stage processing (or value-added production) is forecast to be nearly $3.86 billion.

Table 7 Forecast value of first-stage processing, 2019–20

Industry Forecast ($m) Meat processing 2306 Sugar processing 560 Log sawmilling, timber dressing, and plywood and veneer manufacturing 484 Fruit and vegetables processing 265 Milk and cream processing 90 Flour mill and feed processing 68 Seafood processing 61 Cotton ginning 27 Total 3860

Queensland AgTrends 2019–20 3 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 agricultural, fisheries and forestry production. The most recent changes in methodology used in these publications are outlined below.

Total value of Queensland’s primary industries Before September 2007, the measure used to value Queensland’s primary industry commodities in Prospects was 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 processing First-stage processing forecasts for the current year and estimates for previous years are provided for: • meat processing • sugar processing • log sawmilling, timber dressing, and plywood and veneer manufacturing • fruit and vegetables processing • milk and cream processing • flour mill and feed processing • seafood processing • 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 2019–20 should not be compared with the estimates for years before 2010–11.

Lifestyle horticulture In September 2008, the former Department of Primary Industries commissioned Queensland Treasury’s Office of Economic and Statistical Research 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 for nurseries, cut flowers and turf.

Queensland AgTrends 2019–20 4 Forestry In Table 9, pages 17–19, the value of Queensland’s forest 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 regions For 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 years From 2005–06, the ABS used a new methodology for gathering agricultural data. The ABS’s final GVP estimates for 2016–17, released in July 2018, 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 with those for previous years.

Queensland AgTrends 2019–20 5 About Queensland’s primary industries

In 2017–18, Queensland’s primary industries directly contributed an estimated $10.63 billion on a value-added basis to the state economy—this was 3.1 per cent of the gross state product.1

Geographically, Queensland is Australia’s second-largest state, covering more than 173 million hectares. This area is more than twice the size of Texas, four times that of Japan and seven times that of Great Britain. 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 2017–18, Queensland exported approximately $12 billion worth of agriculture and food products. This figure includes an estimate for sugar exports. Exports of these primary products comprised 12 per cent of the state’s overseas commodity exports in 2017–18.2

Queensland is Australia’s largest producer and exporter of beef, with just under three-quarters of the state’s $5.4 billion of beef exports going to Asian markets. Beef is the most significant agricultural commodity for Queensland, with cattle and calf sales worth an estimated $5.2 billion in 2017–18.3 Queensland also has the largest amount of certified organic agricultural production land in Australia, with almost 2.3 million hectares in total, including large tracts of organic grazing land in the Channel Country. Almost 70 per cent of Australia’s expanding organic beef industry is in Queensland.

Queensland is one of the largest producers of pork in Australia. The estimated GVP in 2017–18 was $248 million.4

Queensland is also one of the largest producers of fruit and vegetables in Australia. Its major vegetable crops include tomatoes, capsicums, beans, mushrooms, sweetpotatoes and lettuce.5

The state grows over 95 per cent of Australia’s bananas and is the nation’s biggest producer of tropical fruits such as mangoes, pineapples and avocados.6

Queensland produces around 95 per cent of Australia’s raw sugar, and a large percentage of this product is sold on the world market.7

In 2016–17, the combined employment associated with the whole food supply chain equated to around 300 000 employees. This means that roughly one in seven Queenslanders was either partly or entirely supported by the food sector.8

1 ABS 2018, Australian national accounts: state accounts, 2017–18, cat. no. 5220. 2 ABS 2018, Exports from Queensland and Australia to all countries, by commodity, value, 2016–17; Office of Economic and Statistical Research 2018, Standard international trade classification 2 digit, food and live animals. 3 ABS 2019, Value of agricultural commodities produced, Australia, 2017–18, cat. no. 7503. 4 As above. 5 As above. 6 As above. 7 As above. 8 AgTrends update, April 2019.

Queensland AgTrends 2019–20 6 About the department

Our vision A productive and profitable agriculture, fisheries and forestry sector, on a sustainable basis.

Our purpose Promote a sustainable and innovative agriculture, fisheries and forestry sector, develop rural businesses and add value to communities and the economy.

Our objectives 1. Work with industry to create the conditions to drive innovation, productivity and jobs.

2. Build capacity of agribusinesses and communities to meet sector challenges.

3. Promote responsible use of natural resources to underpin productivity, environmental sustainability and healthy lifestyles.

Strategic opportunities Economic shifts—Rapidly growing middle classes and a focus on food security in Asia, South America and Africa are driving increases in food demand, giving the department opportunities to support Queensland’s produce and agricultural expertise in new and expanded markets, and to facilitate new sources of investment for the sector.

Virtual connections—Exploiting advances in technology and big data will change the way government, business and customers operate; it will be easier and cheaper to interact, transact and make better decisions.

Strategic partnerships—Strong partnerships with research organisations, industry bodies and government agencies will enable the department to leverage expertise and share responsibility for managing risks.

Informed consumers—Assisting businesses to meet consumer expectations about the origin, safety and ethical production of food and fibre will help to increase demand for Queensland produce.

Strategic risks Disruptive events—High-impact external threats (e.g. climatic events, pests, diseases, economic shocks and cyber attacks) will challenge the capacity of the department and the sector to respond rapidly, reform our processes and stretch resources across competing priorities.

Protection of biological ecosystems—More efficient and environmentally sustainable industry practices, and improved management and prevention of invasive pests and weeds, may not fully meet community and industry aspirations for protecting Queensland’s environment and lifestyles.

Climate change—Agriculture, forestry and fisheries production faces significant pressure from climate change, which may compromise operations in the longer term.

Organisational agility—Challenges in adapting and renewing business models, securing partnerships and resourcing may affect the department’s ability to keep pace with change, innovate and meet expectations.

Queensland AgTrends 2019–20 7 About Queensland AgTrends Queensland 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 2019–20 • initial first-stage processing forecasts for 2019–20 • GVP and first-stage processing estimates for 2016–17 and 2017–18 and forecasts for 2018–19 • averages for the past 5 years and changes over the past 5 years.

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

About the AgTrends update The forecasts provided in this edition will be updated in April 2020. Updated forecasts will be made available electronically and can be downloaded from 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.

Contact We 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 daf.qld.gov.au to view current and previous editions of AgTrends and AgTrends update.

Content and procedure In 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.

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.

Queensland AgTrends 2019–20 8 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 2019, 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.

Queensland AgTrends 2019–20 9 Climate outlook for November 2019 to January 2020

For most of Queensland, the probability of exceeding the median rainfall for the next three months (November 2019 to January 2020) is currently low or very low, particularly for areas of eastern, central and south-eastern Queensland (Figure 1).

The seasonal outlook is based on analysis of key climate drivers that influence Australia. The Bureau of Meteorology indicates that a dry outlook for north-eastern Australia will continue into December. Daytime temperatures are likely to be above average, with a spell of hot weather likely in mid-to-late October for most areas. Nights are likely to be cooler than average for the remainder of October in the far north and in parts of the north-east during November. Elsewhere, nights are generally likely to be warmer than average.

Figure 1 Chance of exceeding the median rainfall for November 2019 to January 2020 Source: Australian Bureau of Meteorology.

Queensland AgTrends 2019–20 10 Most Likely Tercile for Pasture Growth November 2019 to January 2020

Top (68-100%) Middle (34-67%) Bottom (1-33%) Lakes White = Seasonally low growth

Figurewww.LongPaddock.qld.gov.au 2 Chance of exceeding the median growth for October to December 2019 Source: The Long Paddock, .

Queensland AgTrends 2019–20 11 Drought situation

At 1 September 2019, 66.1 per cent of Queensland was officially drought-declared (Figure 3).

Figure 3 Drought-affected areas in Queensland, September 2019 Source: The Long Paddock, .

Queensland AgTrends 2019–20 12 World and Australian economic environment

The International Monetary Fund (IMF)9 uses the ominous expression ‘synchronised slowdown’ for the global economy (Table 8), most notably in industrial output and associated with a global decline in car manufacturing, reduced investor confidence due to proliferating trade disputes and a slowing of Chinese economic growth. Not surprisingly, trade growth has also slowed markedly.

At 3 per cent, expected global growth for 2019 is the weakest since 2009. However, far from foreshadowing a recession, the IMF forecasts improved prospects for 2020 and following this a return to higher rates of 3.6 per cent, driven by emerging market and developing economies, primarily in Asia. Although China’s structural economic deceleration is expected to continue, India is forecast to post sustained high-growth figures of over 7 per cent.

In contrast to official Australian optimism, the IMF expects our economic growth to be only 1.7 per cent in 2019, accelerating to 2.3 per cent in 2020, still a respectable figure in the developed world.

9 See .

Queensland AgTrends 2019–20 13 Table 8 IMF World economic outlook projections for gross domestic product

Year-on-year percentage change Difference from July 2019 update Actual Projections

2018 2019 2020 2019 2020 World output 3 6. 3 0. 3 .4 –0 .2 –0 1. Advanced economies 2 .3 1 7. 1 7. –0 .2 0 0. United States 2.9 2.4 2.1 –0.2 0.2 European Union 2.2 1.5 1.6 –0.1 –0.2 Euro area 1.9 1.2 1.4 –0.1 –0.2 Japan 0.8 0.9 0.5 0.0 0.1 United Kingdom 1.4 1.2 1.4 –0.1 0.0 Canada 1.9 1.5 1.8 0.0 –0.1 Other advanced economiesa 2.6 1.6 2.0 –0.5 –0.4 Australia 2.7 1.7 2.3 Emerging market and developing 4 7. 3 .9 4 6. –0 .2 –0 1. economies Emerging and developing Asia 6.4 5.9 6.0 –0.3 –0.2 China 6.6 6.1 5.8 –0.1 –0.2 India 6.8 6.1 7.0 –0.9 –0.2 ASEAN-5b 5.2 4.8 4.9 –0.2 –0.2 Emerging and developing Europe 3.1 1.8 2.5 0.6 0.4 Russia 2.3 1.1 1.9 –0.1 0.0 Latin America and the Caribbean 1.0 0.2 1.8 –0.4 –0.5 Brazil 1.1 0.9 2.0 0.1 –0.4 Middle East and Central Asia 1.9 0.9 2.9 –0.5 –0.3 Sub-Saharan Africa 3.2 3.2 3.6 –0.2 0.0 World growth Based on market exchange rates 3.1 2.5 2.7 –0.2 –0.2 World trade volume (goods and 3.6 1.1 3.2 –1.4 –0.5 services) Imports Advanced economies 3.0 1.2 2.7 –1.0 –0.6 Emerging market and developing 5.1 0.7 4.3 –2.2 –0.8 economies Exports Advanced economies 3.1 0.9 2.5 –1.3 –0.4 Emerging market and developing 3.9 1.9 4.1 –1.0 –0.5 economies Commodity prices (US$) Oil 29.4 –9.6 –6.2 –5.5 –3.7 Non-fuel (average based on world 1.6 0.9 1.7 1.5 1.2 commodity import weights)

a Excludes the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) and euro area countries. b Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

Queensland AgTrends 2019–20 14 Amid the stern words to world leaders about how not to make things worse, the IMF report does not say much about agriculture. The OECD–FAO agricultural outlook 2019–202810 notes the strong supplies of agricultural commodities over the last several years, and expects supply growth to keep pace with the demand from an increasing global population. Even though global quantitative food deficits are not likely, the triple nutritional burden of quantitative undernourishment, micronutrient deficiencies and obesity are increasingly found within individual low- and middle-income countries.

In trade, the report sees increasing supply from Latin America and the Caribbean, with Africa boosting its share of world imports from 35 to 50 per cent between 2019 and 2028. Despite continuing population and income growth, India’s overall trade position is not expected to change, due to domestic production keeping pace. Given the higher general trade barriers for agricultural commodities than for industrial ones, free trade agreements between and among countries remain the main facilitators of trade growth. 1068 Fig 4 1068 Fig 5 The September 2019 FAO food price index was 3.3 percentage points above that for 2018, but generally around the level of the previous years since the major rise in 2016 (Figure 4 ).11 FAO Food Price Index FAO Food Commodity Price Indices

2002–2004 = 100 2002–2004 = 100

185 240 Dairy 2017 177 208

Sugar 169 Meat 176 2019 2018 161 Cereals 2016 144 153 Vegetable oils

145 112 JFMAMJJASOND SONDJFMAMJJA S 2018 2019

Figure 4 FAO food price index, 2016 to 2019 Figure 5 FAO food commodity price indexes, 2018–19

Among the individual commodities (Figure 5), sugar prices did not sustain their rise during the year, while cereals and vegetable oils were treading water. Meats finished the period well above the starting point, while dairy showed extreme volatility.

The last decade’s food prices in real terms have been at the level of the 1960s and 1970s, still well above those during the low period of 1985–2005 (Figure 6).

10 See . 11 Source for Figures 4, 5 and 6 is .

Queensland AgTrends 2019–20 15 1028_Fig 6

FAO Food Index in nominal and real terms

2002–2004 = 100

250 Nominal 200

150 Real* 100

50

0 1961 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2019

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

Figure 6 FAO food price index, 1961 to 2019

FAO expects food prices to remain at the current levels in real terms over the next decade, as many markets are saturated and productivity growth will maintain supplies. Expanded consumption due to population growth will be in Africa, the Middle East and the Indian subcontinent. Global urbanisation and a shift to more processed foods are expected to continue underpinning demand for sugar and vegetable oils. Meat demand is likely to remain strong in the Americas, while fresh dairy will supply protein needs, particularly in South Asia. Animal feeds will continue to be sought after, causing a shift among cereals away from those for direct human consumption.

Overall, from a largely steady land area, global food production is expected to grow around 15 per cent over the next decade. Expansion in livestock production will be affected by the outcome of the global African swine fever epidemic, while aquaculture is expected to reach a 55 per cent share of all seafood by 2028.

Queensland AgTrends 2019–20 16 Primary industries—estimates and forecasts

Table 9 GVP, first-stage processing and total primary industries estimates and forecasts, 2016–17 to 2019–20

2016–17 2017–18 2018–19 2019–20 Change Last Change estimateb estimatec forecast, forecast, from April 5 years from April 2019d October to October average 5-year 2019d average to current forecast

Commodity GVPa ($m) ($m) ($m) ($m) (%) ($m) (%) Livestock Livestock disposals Cattle and calves 5 483 5 248 5 447 5 137 –6 5 383 –5 Poultry 650 561 570 573 1 592 –3 Pigs 293 248 216 242 12 269 –10 Sheep and lambs 9 11 17 17 2 32 –46 Other livestock 46 41 40 42 5 43 –2 Total livestock disposals 6 481 6 109 6 290 6 011 –4 6 319 –5 Livestock products Eggs 234 225 228 239 5 220 9 Milk (all purpose) 251 230 201 170 –15 231 –26 Wool 76 98 85 85 0 76 11 Total livestock productse 561 553 514 494 –4 527 –6 Total livestock 7 042 6 662 6 804 6 505 –4 6 846 –5 Horticulture Fruit and nuts Bananas 572 580 574 576 0 569 1 Other fruit and nuts 264 285 285 289 1 261 11 Avocados 225 211 267 265 –1 200 32 Mandarins 107 143 143 158 10 115 38 Macadamias 140 153 141 147 4 126 17 Strawberries 144 193 137 145 6 171 –15 Mangoes 96 113 113 113 0 91 24 Apples 90 93 93 84 –10 83 1 Table grapes 53 65 84 84 0 61 37 Pineapples 70 64 65 66 2 65 2 Total fruit and nuts 1 761 1 900 1 902 1 927 1 1 743 11 Vegetables Tomatoes 250 298 280 280 0 279 0 Other vegetables 220 231 243 232 –4 222 4 Capsicums and chillies 132 141 168 168 0 147 14 Beans 72 130 83 81 –2 90 –10 Sweet corn 41 82 55 78 42 52 49 Melons (rock and cantaloupe) 50 59 66 66 0 54 21 Mushrooms 70 70 63 63 0 69 –8 Sweetpotatoes 64 64 64 62 –3 61 1 Zucchini and button squash 39 41 47 47 0 43 10 (Continued)

Queensland AgTrends 2019–20 17 Table 9 continued

2016–17 2017–18 2018–19 2019–20 Change Last Change estimateb estimatec forecast, forecast, from April 5 years from April 2019d October to October average 5-year 2019d average to current forecast

Commodity GVPa ($m) ($m) ($m) ($m) (%) ($m) (%) Vegetables (continued) Lettuce 56 82 50 33 –34 59 –44 Melons (watermelon) 31 37 32 29 –9 34 –14 Pumpkin 30 40 40 28 –30 34 –19 Potatoes 52 52 40 24 –40 52 –54 Carrots 27 44 24 16 –33 29 –44 Onions 26 30 23 15 –35 27 –44 Total vegetables 1 160 1 401 1 278 1 222 –4 1 253 –2 Total fruit and nuts and vegetables 2 921 3 301 3 180 3 149 –1 2 996 5 Lifestyle horticulture production Nurseriesk 902 907 921 939 2 902 4 Turf k 180 327 327 327 0 234 40 Cut flowersk 161 161 161 161 0 157 3 Total lifestyle horticulture production 1 243 1 395 1 409 1 427 1 1 292 10 Total horticulture 4 164 4 696 4 589 4 576 0 4 288 7 Other field crops Sugarcanef 1 527 1 234 1 087 1 020 –6 1 259 –19 Cotton (raw)g 622 882 564 237 –58 583 –59 Other cropsc 81 134 52 38 –27 78 –51 Total other field crops 2 230 2 250 1 703 1 295 –24 1 921 –33 Cereal grains Grain sorghum 139 302 334 356 7 315 13 Wheat 361 246 187 205 10 301 –32 Other cereal grains 247 181 135 132 –2 186 –29 Chickpeas 744 377 136 83 –39 369 –78 Maize 45 39 71 72 1 54 33 Barley 102 58 35 28 –20 75 –63 Total cereal grains 1 638 1 203 898 876 –2 1 265 –31 Total crops 8 032 8 149 7 191 6 747 –6 7 474 –10 Total agriculture 15 074 14 811 13 995 13 253 –5 14 320 –7 (Continued)

Queensland AgTrends 2019–20 18 Table 9 continued

2016–17 2017–18 2018–19 2019–20 Change Last Change estimateb estimatec forecast, forecast, from April 5 years from April 2019d October to October average 5-year 2019d average to current forecast

Commodity GVPa ($m) ($m) ($m) ($m) (%) ($m) (%) Fisheriesc,h Commercial fishing Crustaceans 80 107 112 112 0 104 8 Finfish 64 67 63 63 0 64 –2 Molluscs 3.6 4 6.1 6 0 4 37 Total commercial fishing 148 178 181 181 0 172 5 Recreational fishing 94 94 94 94 0 94 0 Aquaculture 92 105 120 130 8 106 22 Total fisheries 334 377 395 405 3 373 9 Forestry and loggingc,i 260 270 279 283 1 248 14 Total primary industries (farm gate) 15 668 15 458 14 669 13 941 –5 14 940 –7 First-stage processing value addedj Meat processingc 2 485 2 343 2 413 2 306 –4 2 424 –5 Sugar processingc 860 635 553 560 1 647 –13 Log sawmilling, timber dressing, and 423 435 472 484 3 426 14 plywood and veneer manufacturingc Fruit and vegetables processingc 246 277 267 265 –1 252 5 Milk and cream processingc 132 121 106 90 –15 122 –26 Flour mill and feeding processingc 127 93 70 68 –2 98 –31 Seafood processingc 50 57 59 61 3 56 9 Cotton ginningc 71 100 64 27 –58 66 –59 Total primary industries (first-stage 4 395 4 063 4 004 3 860 –4 4 091 –6 processing) Total primary industries 20 062 19 521 18 673 17 801 –5 19 031 –6 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, sugarcane 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 2016–17 unless otherwise indicated. c ABS final estimates for 2017–18 unless otherwise indicated. d DAF forecasts. e Excludes minor commodities such as honey, beeswax and mohair. f Gross value of sugarcane at the mill door. g Includes value of cottonseed and lint. h Includes catches from state-managed fisheries. i Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimates. j See page 60 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.

Queensland AgTrends 2019–20 19 Volume of production index A 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 2009–10 to 2019–20 is detailed in Table 10. The long-term trends for major categories are shown in Figure 7.

The index for agriculture for 2019–20 is forecast to be 94. This indicates that Queensland’s agricultural production in 2019–20 is forecast to be 6 per cent lower (on average) than in the base year of 1996–97.

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

Commodity 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20 (forecast) (forecast) Wheat 68 77 95 82 52 50 66 76 39 22 28 Grain sorghum 92 118 141 147 86 161 117 60 97 91 106 Barley 26 34 45 40 42 59 87 102 44 21 17 Major cereal grains 73 84 104 96 62 83 84 76 56 43 50 Sugarcane 81 65 67 72 80 85 89 95 87 87 82 Cotton lint 84 211 187 189 190 98 114 172 201 102 52 Major other field crops 81 100 97 100 106 87 94 113 114 89 60 Major fruit 176 125 166 178 164 215 215 223 239 219 242 Major vegetables 109 111 137 103 75 78 81 89 86 92 83 Major fruit and vegetables 144 118 152 142 121 123 150 158 164 157 161 Crops 92 100 110 108 98 93 103 108 36 92 86 Beef 133 132 130 136 149 134 152 117 127 133 113 Pigs 113 108 109 110 108 109 130 114 110 118 109 Poultry (chicken meat) 168 170 174 174 208 212 221 225 214 211 216 Sheep and lambs 42 34 39 46 56 44 40 5 7 13 10 Major livestock disposals 131 130 129 137 148 136 153 124 130 136 129 Milk (all purposes) 66 61 61 57 54 52 49 51 52 44 38 Wool 19 34 38 34 25 18 12 12 19 16 15 Eggs 290 340 385 395 588 603 413 472 450 643 660 Major livestock products 63 68 72 69 75 72 57 62 63 69 66 Livestock 112 113 113 118 127 118 127 106 112 117 105 Total agricultureb 101 105 111 112 111 104 113 110 110 103 94 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.

Queensland AgTrends 2019–20 20 1068_Fig 7

Volume index over time 300

250

200

Major fruit Major livestock disposals Index 150

100 Major vegetables

50 Major livestock products Major cereal grains

0

1996–971997–981998–991999–002000–012001–022002–032003–042004–052005–062006–072007–082008–092009–102010–112011–122012–132013–142014–152015–162016–17

(forecast) (forecast) 2017–18 (forecast) 2018–19 2019–20 Financial year

Figure 7 Volume of production index for Queensland’s major agricultural categories, 1996–97 to 2019–20

Queensland AgTrends 2019–20 21 Livestock disposals

Cattle and calves

Key findings

Weipa beef • Over 3.77 million cattle and calves were processed in Queensland in 2018–19, 6 per cent more than in the last financial year. However, if there is a return to Cairns average rainfall conditions, the slaughter rates are expected to fall in 2019–20

Burketown Townsville as producers consolidate and recommence herd rebuilding. Charters Towers Mackay Mount Isa • The national herd is expected to decrease slightly in 2019–20 from 26.4 million

Rockhampton Longreach head if drought conditions persist.

Birdsville Bundaberg • Average carcase weights are expected to decrease slightly, based on the Charleville BRISBANE current poor rainfall outlook. • The number of cattle at grain feedlots in Australia remains near record levels, primarily due to feed availability, firm export demand for grain-fed beef and mitigation against continuing drought conditions. • Cattle sold at saleyards eased, as the Eastern Young Cattle Indicator (EYCI)—the leading indicator of domestic markets sales—has fallen below 500 cents per kilogram carcase (dressed) weight for the first time in 3 years, although it is still above the average for the past 5 years. However, weighted average saleyard prices for cattle are forecast to increase in 2019–20 due to lower supply of cattle and strong demand for our beef in the export markets. • Most of the Queensland cattle suitable for slaughter are sourced directly from cattle producers by meatworks on a carcase-weight price basis and this is indicated by the over-the-hook price. Prices for cattle sold directly to processors improved during 2018–19. • Exports of Australian beef increased by 9 per cent from 1 157 017 tonnes in 2017–18 to 1 261 143 tonnes in 2018–19. According to ABARES, beef exports will decrease to 995 000 tonnes in 2019–20. • Exports of Queensland beef increased, with firm export growth and drought conditions bringing large numbers to processors. Export estimates indicated an increase from $4.5 billion (644 719 tonnes) in 2017–18 to $5.4 billion (697 512 tonnes) in 2018–19. • Meat and Livestock Australia (MLA) believes that Australian beef exports to the United States, Japan and South Korea will fall in 2019–20 but exports to China will increase due to the presence of African swine fever in China. • The GVP for Queensland’s live cattle exports in 2019–20 is forecast to be $315 million. This is less than the final estimate for 2018–19 but still greater than the average for the last 5 years. The main reason for this forecast drop is the contraction in the number of cattle suitable for export.

Forecast The 2019–20 GVP for Queensland’s cattle and calf industry (including cattle and calves sold for slaughter and live exports) is forecast to be $5.14 billion. This is 6 per cent lower than the final estimate for 2018–19 and 5 per cent lower than the average for the past 5 years.

Queensland AgTrends 2019–20 22 Analysis and discussion

1068_FigCattle and calves8 sold for slaughter For 2019–20, the GVP for cattle and calves sold for slaughter is forecast to be $4.82 billion, which is a 5 per cent reduction on last year’s final estimate. In 2018–19, 3.77 million head of cattle and calves were slaughtered in Queensland,Cattle and 7 per calf cent slaughterings more than in the (QLD) previous year.

5.0

4.5

4.0

3.5

3.0

2.5

2.0

Slaughterings (m) 1.5

1.0

0.5

0

2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20 2011–012 (forecast) Financial year

Figure 8 Queensland cattle and calf slaughterings, 2004–05 to 2019–20

MLA believes that seasonal conditions during spring 2019 will play a huge role in how the market performs in the second half of the year, with any improvement to pasture conditions likely to see graziers’ demand for young cattle and females increase. In the meantime, a weak Australian dollar is assisting exporters of Australian beef, as domestic processors continue to rely on overseas markets to absorb increased supply.

Slaughter Over 3.77 million cattle and calves were slaughtered in Queensland in 2018–19, 6 per cent more than in the last financial year. However, if the present drought conditions experienced across much of the country over winter continue throughout spring and summer, producers could turn off more stock over the last quarter of 2019. Record numbers of cattle at feedlots will assist beef processors during this period.

Production Beef and veal production for the year to June 2019 was just under 1 110 000 tonnes carcase weight for Queensland. The total was 3 per cent higher year-on-year than for the previous year. Ongoing dry conditions will likely see more cows and heifers sent to slaughter over the closing months of 2019, and will lower the quality of grass-fed cattle. MLA expects carcase weights to decline back to long-term trend figures for the remainder of 2019. As approximately 30 per cent of cattle are fed at feedlots, the impact of drought on carcase weight is masked to an extent by higher carcase weights achieved through grain feeding. These cattle are destined for high-value grain-fed beef markets in Japan, South Korea, Europe and China.

Queensland AgTrends 2019–20 23 Cattle numbers Cattle numbers in Queensland have ranged from approximately 40 to 45 per cent of the total Australian herd over the past decade. By 2015–16, the cattle numbers had fallen due to poor seasonal conditions and the pressure of large live-export cattle consignments. Since then the cattle numbers have started to rise again due to1068_Fig9 herd rebuilding by graziers across the country. Unfortunately, due to the return of drought conditions, these numbers are expected to trend downwards again if significant rain is not received over the next few months. Total cattle and calves

35

30

25

20

15

10 Total cattle and calves (m) Total 5

0

2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18

Financial year

Queensland Australia Figure 9 Total cattle and calf numbers, Queensland and Australia, 2007–08 to 2017–18 Source: ABARES annual statistics, 2018.

One of the few measures available to the beef industry to forecast the condition of the static herd is the female proportion of the state’s slaughter. This level may be used to interpret the impact of seasonal conditions, as pregnant female cattle require a higher plane of nutrition and would be the last to be sold during drought.

The female slaughter percentage has increased by 5 per cent since last year, making it the highest in over a decade (Figure 10). The increased percentage suggests that producers have reduced their herd rebuilding in response to seasonal drought conditions as well as firm demand from export markets, particularly, Japan, China and the United States.

Queensland AgTrends 2019–20 24 1068_Fig10

100

38 42 42 36 36 38 39 38 38 42 35 38 42 45 40 40 43 48 80

60

Percentage 40

62 58 58 64 64 62 61 62 62 58 65 62 58 55 60 60 57 52

20

0 2002–03 2004–05 2006–07 2008–09 2010–11 2012–13 2014–15 2016–17 2018–19 Financial year

Share of cattle and calves Share of cows and heifers

Figure 10  Percentage share of total slaughter for cattle and calves and cows and heifers, Queensland, 2002–03 to 2018–19 Source: ABS, 2018.

Price A Rabobank spokesperson said that while global markets will have a bearing on Australian cattle prices, the local supply of cattle—dictated largely by seasonal conditions—will influence prices over the next 12 months.

‘There are a number of scenarios that could play out … For example, if Australian beef producers get a good spring, this would see restocker interest in the market remain high, and prices would hold up accordingly, but come off a bit from their record highs … Alternatively, if the season remains dry, particularly in central Queensland, this could see cattle rebuilding efforts put on hold, and prices could ease a bit more.’

ABARES believes that in 2019–20 Australian saleyard prices of beef cattle will rise by 8 per cent, reflecting strong demand for beef in global markets and a lower supply of cattle in the saleyards.

Most cattle slaughtered in Queensland are sourced directly from graziers by meatworks on a carcase-weight price basis or an over-the-hook price. Figure 12 indicates the prices paid for cattle at abattoirs where over 60 per cent of production is destined for export markets.

The tightening availability of slaughter-ready cattle and the firming demand for export beef assisted the national over-the-hook indicators, which averaged up to 10 per cent higher year-on-year during 2018–19 for Queensland-grown steers. This result nearly matches the previous 2016 high.

Queensland AgTrends 2019–20 25 1068_Fig11

800

700

600

500

400

EYCI (c/kg) 300

200

100

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 11 EYCI, 2010 to 2018 Source: MLA, 2019.

800

700

600 Queensland over-the-hook 100-day grain-fed steer Trade steer 500 Heavy steer

400 Medium cow

300 Price indicator (c/kg carcase weight) 200 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Figure 12 Over-the-hook price indicators, 2010 to 2019 Source: MLA, 2018.

Exports Exports of Australian beef increased by 9 per cent from 1 157 017 tonnes in 2017–18 to 1 261 143 tonnes in 2018–19. In August 2019, according to ABARES, the United States and Japan commenced discussion on a new trade agreement. This deal, if implemented, is expected to bring tariff reductions on imports of United States beef to similar levels that Australia enjoys under the Comprehensive and Progressive Agreement for Trans- Pacific Partnership. This would put downward pressure on finished cattle prices in Australia.

For 2018–19, Australian beef shipments to the United States totalled nearly 247 350 tonnes shipping weight, up nearly 8 per cent on the previous year’s high. Exports to the United States are supported by ongoing demand for lean manufacturing trimmed beef for burger production and a strengthening United States economy.

There has been a continued rise in beef exports to China, from $746 million in 2016–17 to $1.75 billion in 2018–19. Beef exports to ‘Other Asia’ (see Figure 13) were greater than to any other region in 2018–19 at 29 per cent of total Australian meat exports (334 000 tonnes shipping weight).

Queensland AgTrends 2019–20 26 Australian exports to Japan decreased by 5000 tonnes from the previous year to 302 755 tonnes shipping weight. As a result, Japan has fallen to be the second-largest of Australia’s export markets by volume at 26 per1068_Fig13 cent. In contrast, there was an increase of 13 per cent in the volume of beef shipped to South Korea, which totalled 195 085 tonnes shipping weight. However, there is increasing competition in both these markets from the United States. The United States has a more mature free trade agreement with South Korea than with Australia, giving a greater tariff advantage to their beef imports. Australia (2018 – 19 - Beef and veal exports)

Eastern Europe Western Europe Canada West Other destination European Union Middle East Canada East Taiwan United States West United States East South Korea Other Asia Japan 0 5 10 15 20 25 30

Percentage of total exports

Figure 13 Australian exports of beef and veal, 2018–19 Source: DAF, 2019.

In 2018–19, Queensland exported 697 512 tonnes of beef and veal, accounting for 55 per cent of Australia’s beef and veal exports. This was an increase of approximately 52 793 tonnes from the previous year. Japan was Queensland’s largest export market, accounting for 31 per cent of exports, and was followed by ‘Other Asia’ 1068_Fig14(25 per cent) and South Korea (19 per cent). Preliminary estimates for 2018–19 indicate that Queensland exported $5.36 billion worth of beef, up 18 per cent from the previous year. Fresh and chilled beef exports increased by 19 per cent to nearly $2.33 billion, whereas frozenQueensland beef exports (2018 increased – 19 - Beef by nearly and 19 veal per exports)cent to just over $3.04 billion.

Eastern Europe Western Europe Canada West Other destination European Union Middle East Canada East Taiwan United States West United States East South Korea Other Asia Japan 0 5 10 15 20 25 30 35

Percentage of total exports

Figure 14 Queensland exports of beef and veal, 2018–19 Source: DAF, 2019.

Queensland AgTrends 2019–20 27 Feedlots Cattle on feed in Australia for the April–June 2019 quarter increased by only 1832 head (0.2 per cent) from the same period last year. At that time there was a 9 per cent increase from the March quarter, reaching the unprecedented level of 1 120 459 head, according to the results of the latest Australian Lot Feeders’ Association (ALFA) and MLA survey.

An increase of numbers on feed was recorded in all states apart from New South Wales, which saw a decrease of 10 per cent to 316 812 head. Western Australia had the greatest percentage increase of 51 per cent (18 169 head) from the previous year, closely followed by South Australia (48 per cent) and Victoria (8 per cent) with 14 853 and 5587 head respectively.

In June 2019, the European Commission agreed that 35 000 tonnes of the European Union’s 45 000 tonnes import quota for hormone-free beef will be allocated to the United States. This may reduce the European Union market share currently held by other exporting nations such as Australia. The United States will receive an initial allocation of 18 500 tonnes, and this will increase to 35 000 tonnes over the next 7 years.

Beef shipped within the current 45 000 tonne quota is tariff-free; exports outside of this allocation attract large tariffs, making them uneconomic. The European Union quota is serviced on a first-in, first-served basis, and Australia recently supplied about one-third (13 000 tonnes) of the quota, valued at an estimated $238 million dollars in 2018. 1068_Fig 15 Although small in volume, the European Union quota is the highest paying beef market that Australia has access to. Our domestic production and processing systems are devoted to meeting key protocols for access, such as traceability, supply chain accreditation and prohibition of hormonal growth promotants.

900 000 800 000 Total capacity 700 000 Cattle on feed 600 000 500 000 400 000

Number of cattle 300 000 200 000 100 000 0 July 2013 Oct. 2018 Oct. 2011 Apr. 2015 May 2019 May 2012 Jan. 2017 Mar. 2018 Mar. 2011 Feb. 2014 Nov. 2015 Dec. 2012 Aug. 2017 June 2016 Sept. 2014

Figure 15 Queensland cattle on feed and feedlot capacity, 2011 to 2019 Source: ALFA and MLA, June 2019 national accredited feedlot survey.

Live cattle exports The GVP for Queensland’s live cattle exports in 2019–20 is forecast to be $315 million. This is less than the final estimate for 2018–19 but still greater than the average for the past 5 years.

The main export destinations for live cattle from Queensland in 2018–19 were Vietnam (48 per cent) and Indonesia (46 per cent), with both significantly increasing their intake over that period.

However, according to MLA, while challenges abound, the fundamentals for growth in beef consumption in South-East Asia remain strong, with the region hosting some of the fastest growing populations and economies in the world.

Queensland AgTrends 2019–20 28 Indonesia1068_Fig16 has negotiated to import Brazilian beef to assist in demand for beef. The presence of Indian buffalo meat has impacted the price of cheaper meat cuts in Indonesia, but has not significantly affected the sales of Australian live cattle or beef sales to Indonesia. Queensland live cattle exports ($)

400

350

300

250

200 GVP ($m) 150

100

50

0

2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 (forecast) Financial year 1068_Fig17 Figure 16 Queensland live cattle exports, 2008–09 to 2018–19 Queensland live cattle exports by country of destination

180

160

140

120

100

GVP ($m) 80

60

40

20

0

2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 (forecast) Financial year Indonesia Vietnam Other Figure 17 Queensland live cattle exports by country of destination, 2008–09 to 2018–19

Queensland AgTrends 2019–20 29 Poultry

Forecast Weipa poultry The GVP for Queensland poultry in 2019–20 is forecast to be $573 million, 1 per cent higher than the ABS estimate for 2018–1912 and 3 per cent lower than the Cairns average for the past 5 years. Burketown Townsville Charters Towers Mackay Mount Isa Analysis and discussion

Rockhampton Longreach The GVP is expected to increase from 2018–19 as a result of increasing price

Birdsville Bundaberg competition between major supermarkets Woolworths and Coles. This puts Charleville BRISBANE pressure on poultry processors to reduce their prices, significantly limiting growth 1068_Fig18 in the price paid per bird to industry operators (Figure 18).

160 500

450 140

400 120 350

100 300

80 250

200 60 Slaughterings (m)

150 Gross unit value (c/bird) 40 100

20 50

0 0 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20 (estimate) (forecast) Financial year

Slaughterings Gross unit value

Figure 18 Queensland poultry production, 2010–11 to 2019–20 Note: Gross unit value refers to average gross unit value across all grades in principal markets and includes the cost of containers, commission and other expenses incurred in getting the commodities to their principal markets, which are significant. Source: For production: ABS, 7215—Livestock products, Australia, livestock slaughtered—chickens, original.

Queensland remains the second-largest poultry-producing state in Australia (accounting for 21 per cent of total Australian GVP in 2018–19), with New South Wales being the largest producing state (28 per cent).

At the national level, ABARES forecasts that Australian poultry meat production will increase by 1 per cent from the previous financial year, reaching 1.27 million tonnes (carcase weight), or 670 million birds. An expected 2 per cent increase in GVP will result in a total GVP of $2910 million. The poultry consumption level is expected to reach 50.0 kilograms per capita in 2019–20.

12 ABS, 7215—Livestock products, Australia, gross value of livestock slaughtered, released 14 August 2019.

Queensland AgTrends 2019–20 30 Health consciousness is projected to rise over the next 5 years, with consumers likely to increasingly prefer eating leaner white meats (such as chicken) instead of red meats. Also, demand for high-value birds is projected to grow, boosting industry revenue over the next 5 years.

Although input prices for poultry are relatively stable compared with those for other types of meat, the domestic price of wheat feed is expected to reach $376.10 per tonne in 2019–20, which is an increase of 2.6 per cent from the previous year.

While the1068_Fig19 poultry industry grows various types of birds, chickens (mainly conventionally farmed) still dominate the industry and accounted for over 91 per cent of industry revenue in 2018–19. Other poultry varieties include duck, turkey and game birds (Figure 19).

2.1% Turkey 1.5% 4.8% Other poultry Duck

24.1% Free-range and organic chickens 67.5% Conventionally farmed chickens

Figure 19 Poultry varieties in Australia, 2018–19 Source: IBISWorld 2019, Poultry meat farming in Australia, risk ratings report, August 2019.

Queensland AgTrends 2019–20 31 Pigs

Forecast Weipa pigs The GVP for Queensland pig production for 2019–20 is forecast to be $242 million, 12 per cent higher than the ABS estimate for 2018–1913 and 10 per cent lower than Cairns the average for the past 5 years. Burketown Townsville Charters Towers Mackay Analysis and discussion Mount Isa

Rockhampton Longreach The GVP is forecast to increase from 2018–19, as sow numbers are expected to

Birdsville Bundaberg fall due to higher slaughter; this is in response to low pigmeat prices and rising

Charleville BRISBANE feed costs (Figure 20). The combination of high feed prices and low pig prices is reducing the profitability of Australian pig producers.

Queensland is the second-largest pig-producing state in Australia, accounting for 22 per cent of total Australian slaughterings in 2018–19. South Australia is the largest producing state, with 24 per cent.

The first case of African swine fever in China was confirmed in August 2018. The disease has now spread to all parts of China and to some countries in South-East Asia. According to ABARES, African swine fever is assumed to present more risks to Australian imports than to Australian production, because biosecurity 1068_Fig20requirements for pigmeat imports and natural geographic barriers reduce the risk of the disease affecting the Australian pig herd.

1.20 300

1.18

250 1.16

1.14 200

1.12

1.10 150 Slaughterings (m)

1.08 Gross unit value ($/head)

100 1.06

1.04 50

1.02

1.00 0 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20 (estimate) (forecast) Financial year

Slaughterings Gross unit value

Figure 20 Queensland pig production, 2010–11 to 2019–20 Note: Gross unit value refers to average value, which is calculated by dividing the total value by the number of pigs slaughtered. Source: For production: ABS, 7215— Livestock products, Australia, livestock slaughtered—excluding chickens, original.

13 ABS, 7215—Livestock products, Australia, gross value of livestock slaughtered, released June 2019.

Queensland AgTrends 2019–20 32 Sheep and lambs

Forecast The GVP for Queensland sheep and lamb production in 2019–20 is forecast to be $17.3 million, which is 2 per cent above DAF’s final estimate for 2018–19 but 46 per cent below the average for the past 5 years.

Analysis and discussion Nationally, saleyard lamb prices and sheep prices in 2019–20 are forecast to rise by 4 per cent and 6 per cent, respectively, due to increased competition between processors and restockers and strong Chinese demand for mutton. Ongoing strong export demand for sheepmeat will encourage processors to offer high prices in saleyards.

However, the upward price trend forecast at the national level contradicts the prices expected for Queensland, which are forecast to be 6 per cent below the 2018–19 levels for lambs and 5 per cent below for sheep (see Figure 21).

In eastern Australia, restocker demand is expected to increase as flock rebuilding begins. In 2019–20, sheepmeat production is forecast to fall due to lower turn-off in the areas of eastern Australia that were affected by drought conditions during 2018–19.

In 2018–19, Queensland supplied, respectively, 1.50 and 0.34 per cent of the national slaughterings in sheep and lambs. The current forecast assumes that the same proportions will continue in this financial year. ABARES forecasts that national slaughterings of sheep and lambs will be 7.1 million and 20.3 million, respectively, in 2019–20. Using last year’s proportions, the Queensland forecast is 106 800 sheep and 68 500 lambs slaughtered.

Strong global demand—especially in China, the Middle East and the United States—combined with falling production in major sheepmeat exporting countries is expected to result in higher export prices. The outbreak of African swine fever in China is expected to have significant impacts on global protein markets, but any increases in Chinese imports of Australian sheepmeat are expected to be modest, as most Australian production is already 1068_Fig21 exported at high prices to other markets. The effect on Queensland sheep and lamb producers is also expected to be minor, given their share in national supply.

160 700 000

140 600 000

120 500 000

100 400 000

80 300 000 Slaughterings

Price (A$/head) 60

200 000 40

100 000 20

0 0

2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2010–11 2017–18 2018–19 2019–20 (estimate) (forecast) Financial year Sheep slaughterings Lambs slaughterings Sheep price Lambs price

Figure 21 Queensland sheep and lamb saleyard prices and slaughterings, 2010–11 to 2019–20 Sources: ABS, ABARES. For a discussion on wool, see page 37.

Queensland AgTrends 2019–20 33 Livestock products

Although 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 (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.14

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 last year triggered a strong response from Biosecurity Queensland, along with the standard national process for dealing with potentially high-impact biosecurity threats.

Milk

Forecast The GVP for milk for 2019–20 is forecast to be $170 million, 15 per cent lower than DAF’s final estimate for 2018–19 and 26 per cent lower than the average for the past 5 years.

Analysis and discussion Production is expected to fall by around 15 per cent in 2019–20 to around 305 million litres, and is forecast to continue falling. This is because of ongoing drought, very high feed prices and the farmgate milk price not increasing enough to cover rising costs. The Darling Downs area—the biggest dairy area in Queensland—is struggling with the drought, and a major exodus of farmers is expected there and in other regions over the next year. This is having a crippling effect on the industry, and substantial milk price increases as well as significant widespread rainfall are required to avoid large drops in farm numbers and production.

Factors that will influence the Queensland dairy industry over the year ahead are: • the impact of extreme drought on feed production • the record high grain and hay prices and a shortage of these due to widespread drought across Australia • whether farmgate milk prices can be increased sufficiently and quickly enough to minimise falls in production and farm numbers • the review of the national dairy industry, which recommends transformational change to industry structures.

14 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 (). 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.

Queensland AgTrends 2019–20 34 Eggs

Forecast Weipa eggs The GVP for eggs for 2019–20 is forecast to be $239 million, 5 per cent higher than DAF’s final forecast for 2018–19 and 9 per cent higher than the average for the Cairns past 5 years. Burketown Townsville Charters Towers Mackay Analysis and discussion Mount Isa

Rockhampton Longreach Egg production is forecast to be 147 million dozen for 2019–20, 3 per cent higher

Birdsville Bundaberg than the estimates by Australian Eggs Limited for 2018–19. This moderate increase Charleville BRISBANE in production reflects a challenging year for egg farmers in Queensland and nationally, with strong supply having an impact on prices and margins (see Figure 22).

In fact, Queensland supply continues to grow at or slightly above overall consumption growth. Due to severe drought conditions, feed prices have gone up significantly and these increases are now just starting to come through to the farm gate, after pushback from supermarkets trying to keep prices low.

Following a major outbreak of Salmonella enteritidis (historically absent in Australia), several flocks were removed from supply (approximately 900 000 birds of a national flock of 20.5 million) in New South Wales and Victoria, leading to a shortage of supply and pushing prices up, particularly in the wholesale markets. The 1068_Fig22shortage is expected to last until mid-2020.

160 250

140

200 120

100 150

80 Production (m) 100 60 Gross unit value (c/dozen)

40 50

20

0 0

2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20 (estimate) (forecast) Financial year Production, dozens Gross unit value Figure 22 Queensland egg production, 2010–11 to 2019–20 Note: Gross unit value refers to average value, which is calculated by dividing the total value by the number of dozens produced. Sources: For production: ABS, 7121–Agricultural commodities, Australia.

Queensland AgTrends 2019–20 35 Population growth is projected to support a rise in total egg consumption, with consumers continuing to purchase eggs as a cheaper source of protein than meat. Consumer demand is shifting towards higher value products1068_Fig23 (such as free-range and organic eggs), and free-range eggs have grown as a proportion of production and industry revenue over the past 5 years (Figure 23). Many Australian consumers have transitioned from cage eggs to free-range eggs in response to concerns regarding animal welfare.

3.4% Organic, specialty and other niche eggs 9.5% Barn-laid eggs

54.4% 32.7% Free-range eggs Cage eggs

Figure 23 Australian egg production types, in terms of industry revenue, 2018–19 Source: IBISWorld, Egg farming in Australia, industry report A0172, May 2019.

Queensland AgTrends 2019–20 36 Wool

Forecast The GVP for wool for 2019–20 is forecast to be $85 million, the same as DAF’s final forecast for 2018–19 and 11 per cent higher than the average for the past 5 years.

Analysis and discussion The Australian Wool Production Forecasting Committee expects that Australian shorn wool production in 2019–20 will reach 285 million kilograms greasy. This is a 5 per cent decline from the levels in 2018–19, and is consistent with ABARES estimates. The decline is due to lower sheep numbers. High adult slaughter rates in 2018–19 (up 16 per cent from 2017–18) and reported low marking rates have contributed to a decrease in the number of sheep shorn.

The Eastern Market Indicator (EMI) price for wool is a weighted average price across different wool types. In 2018–19, the EMI averaged 1945 cents per kilogram. For 2019–20, the EMI is forecast to fall (see Figure 24), as higher volumes of superfine wool come onto the market and historically high prices cause some processors to substitute lower cost fibres. The high EMI is creating an incentive for processors to substitute wool with cheaper synthetic fibres that can be blended with lower cost medium micron wools (20.6 to 22.5 microns).

In Queensland, while some strategic buying of sheep (woolly wether lambs and young ewes in good condition) is occurring, the sell-off is still greater than the buy-in. The price of breeding ewes is the limiting factor for those producers looking to build numbers. High wool and sheepmeat prices are generating confidence, but purchasing remains hesitant. Any expected increase in fleece weight in central areas will be negated by decreases in the southern and eastern regions. A reduction in sheep shorn is forecast to reduce shorn wool production by 17.3 1068_Fig24per cent to 6.7 million kilograms in 2019–20.

140 2500

120 2000 100

80 1500 EMI (c/kg) GVP ($m) 60 1000 40 500 20

0 0

2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20 (estimate) (forecast) Financial year Wool GVP Australian Wool Exchange EMI, clean equivalent

Figure 24 Queensland wool GVP and the EMI, 2010–11 to 2019–20

Queensland AgTrends 2019–20 37 Crops

Horticulture crops Fruit and nuts

Forecast The total GVP for fruit and nuts in Queensland for 2019–20 is forecast to be $1.93 billion. This is 1 per cent higher than DAF’s final estimate for 2018–19 and 11 per cent greater than the average for the past 5 years.

Analysis and discussion

Weipa bananas The GVP for bananas for 2019–20 is forecast to be $576 million, almost the same as DAF’s final estimate for 2018–19 but 1 per cent greater than the average for the Cairns past 5 years.

Burketown Townsville Charters Towers Mackay The banana crop was lower in 2018–19 because of the flooding that occurred Mount Isa between Cairns and Cardwell in March 2018. Also, unfavourable weather had Rockhampton Longreach some impact on the crop. However, production has improved and is forecast to be Birdsville Bundaberg higher for 2019–20. Banana farmgate prices are forecast to be marginally lower Charleville BRISBANE due to the increased supply.

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.

The GVP for strawberries for 2019–20 is forecast to be $145 million, 6 per cent

Weipa strawberries higher than DAF’s final estimate for 2018–19 and 15 per cent lower than the average for the past 5 years.

Cairns Strawberry production and consumer demand have improved since the tampering Burketown Townsville Charters that occurred around mid-September 2018. This year, the growing season has Towers Mackay Mount Isa been quite good. Despite some heavy rain affecting the winter harvest, the cold

Rockhampton nights and warm days have been favourable, resulting in good-quality fruit. Longreach However, extremely dry conditions and high temperatures in the Granite Belt Birdsville Bundaberg have reduced the availability and quality of runners, although some growers are Charleville BRISBANE using alternative planting methods to counteract the reduction in runner supply. Strawberry prices (farmgate and retail) were around average levels at the start of the season but have fallen during the peak season. Retail prices in September were around $1 per punnet in the supermarkets.

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

Queensland AgTrends 2019–20 38 The GVP for avocados for 2019–20 is forecast to be $265 million, 1 per cent less

Weipa avocados than DAF’s final estimate for 2018–19 and 32 per cent greater than the average for the past 5 years.

Cairns Queensland avocado production is forecast to be slightly lower in 2019–20 than in Burketown Townsville Charters 2018–19, although consumer demand for avocados remains strong and prices are Towers Mackay Mount Isa buoyant and expected to be similar to those for last year.

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

The GVP for macadamias for 2019–20 is forecast to be $147 million, 4 per cent greater than DAF’s final estimate for 2018–19 and 17 per cent greater than the Weipa macadamias average for the past 5 years.

Cairns Very hot temperatures, high humidity and low rainfall during the summer have Burketown Townsville Charters impacted the macadamia crop this season. The lower crop has disrupted the Towers Mackay Mount Isa kernel availability to the markets and the nut size has been smaller this harvest.

Rockhampton However, export demand for macadamias remains strong, with Japan, Taiwan, Longreach Europe and the United States all increasing Australian kernel imports. Also, Birdsville Bundaberg

Charleville investment in new plantings has expanded and demand for macadamia farming BRISBANE land has significantly increased in the past few years. Strong consumer demand has led to higher prices and increased the GVP forecast, despite the lower forecast volumes for this season.

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 2019–20 is forecast to be $158 million, 10 per cent greater than DAF’s final estimate for 2018–19 and 38 per cent greater than the Weipa citrus average for the past 5 years.

Cairns Seasonal conditions have been favourable this year and volumes coming from Burketown Townsville Charters all the growing regions have been solid. Mandarin farmgate prices are forecast Towers Mackay Mount Isa to be similar to those for last year, around the 3-year average. Also, exports of

Rockhampton mandarins to Asia are growing due to strong demand for high-quality, easy-peel Longreach mandarins. This trend should continue for the foreseeable future. Birdsville Bundaberg

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

Queensland AgTrends 2019–20 39 The GVP for mangoes for 2019–20 is forecast to be $113 million, the same as

Weipa mangoes DAF’s final estimate for 2018–19 and 24 per cent greater than the average for the past 5 years.

Cairns Flowering has been progressing well in the North Queensland growing regions Burketown Townsville Charters and volumes are expected to be similar to those for last season. The Queensland Towers Mackay Mount Isa seasonal harvest commences in the Dry Tropics regions (Townsville, Burdekin and

Rockhampton Bowen) in mid-November, then in Mareeba and Dimbulah in early December, in Longreach Central Queensland in late December, and in South East Queensland in January. Birdsville Bundaberg

Charleville BRISBANE 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 2019–20 is forecast to be $84 million, 10 per cent lower

Weipa apples than DAF’s final estimate for 2018–19 and 1 per cent greater than the average for the past 5 years.

Cairns Extremely dry conditions and high temperatures on the Granite Belt will affect Burketown Townsville Charters the early-season apple crop next year and will likely have some impact on the Towers Mackay Mount Isa March–April crops also. Rain in the next couple of months is crucial, with several

Rockhampton Longreach tree types already stressed from the heat, and lack of rain will further impact flowering. Fruit size is expected to be smaller this year than last year, resulting in Birdsville Bundaberg

Charleville lower tonnage harvested, but the fall in supply is expected to keep prices higher BRISBANE than average. Galas are harvested in January–February. The main varieties—Red Delicious, Fuji and Granny Smith—are harvested in March and Pink Ladies are harvested around April.

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

The GVP for pineapples for 2019–20 is forecast to be $66 million, 2 per cent greater than DAF’s final estimate for 2018–19 and 2 per cent greater than the Weipa pineapples average over the past 5 years.

Cairns Some plants and fruit were lost following the heavy rainfalls in North Queensland Burketown Townsville in February this year. However, the overall volumes of fresh fruit and processed Charters Towers Mackay fruit in Queensland are expected to be similar to those for last year. Fresh fruit Mount Isa

Rockhampton prices are forecast to be marginally higher than for last year, resulting in a slightly Longreach higher GVP forecast. Birdsville Bundaberg

Charleville BRISBANE 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.

Queensland AgTrends 2019–20 40 The GVP for table grapes for 2019–20 is forecast to be $84 million, the same as DAF’s final estimate for 2018–19 and 37 per cent greater than the average over the Weipa table grapes past 5 years.

Cairns Table grape volumes are a bit lighter this year than last year, but consumer demand Burketown Townsville Charters for grapes is strong and prices are likely to be marginally higher due to the lower Towers Mackay Mount Isa supply.

Rockhampton Longreach The Central Highlands region grows most of the state’s table grapes (on average Birdsville Bundaberg around 70 per cent). The suitable soils, subtropical climate and ideal geographical Charleville BRISBANE location help growers to provide early-season high-quality grapes, which often attract very good prices. The first Queensland harvest commences in Emerald around November.

Queensland AgTrends 2019–20 41 Vegetables

Forecast For 2019–20, Queensland’s GVP for vegetables is forecast to be $1.222 billion, 4 per cent lower than for 2018–19 and 2 per cent lower than the average for the past 5 years.

Analysis and discussion

Weipa tomatoes The GVP for tomatoes for 2019–20 is forecast to be $280 million, the same as DAF’s final forecast for 2018–19 and the average for the past 5 years. Cairns

Burketown Townsville There is expected to be no change in the production of tomatoes across the state Charters Towers in 2019–20. Most of the state’s tomato production occurs in the SA2 geographical Mackay Mount Isa areas of Bundaberg Region—South, Collinsville and Bowen. Rockhampton Longreach

Birdsville Bundaberg

Charleville BRISBANE

The GVP for capsicums and chillies is forecast to be $168 million for 2019–20, the capsicums same as DAF’s final forecast for 2018–19 but 14 per cent greater than the average Weipa and chillies for the past 5 years.

Cairns There is expected to be no change in the production of capsicums and chillies Burketown Townsville Charters across the state in 2019–20. Most of the state’s capsicum and chilli production Towers Mackay Mount Isa occurs in the SA2 geographical areas of Collinsville, Bundaberg Region—South

Rockhampton and Bowen. Longreach

Birdsville Bundaberg

Charleville BRISBANE

The GVP for mushrooms for 2019–20 is forecast to be $63 million, the same as DAF’s final estimate for 2018–19 but 8 per cent lower than the average for the past Weipa mushrooms 5 years.

Cairns Most of the state’s mushroom production occurs in the SA2 geographical areas of Burketown Townsville Greenbank, Stanthorpe Region and Palmwoods. Charters Towers Mackay Mount Isa

Rockhampton Longreach

Birdsville Bundaberg

Charleville BRISBANE

The GVP for sweetpotatoes is forecast to be $62 million for 2019–20, slightly lower than DAF’s final forecast for 2018–19 and slightly above the average for the past 5 years. Queensland produces a large percentage of Australia’s sweetpotatoes, and Bundaberg is the main growing area.

Queensland AgTrends 2019–20 42 Other vegetables The GVP for lettuce for 2019–20 is forecast to be $33 million, down by one-third

Weipa lettuce from DAF’s final forecast for 2018–19 and 44 per cent below the average over the past 5 years.

Cairns Water shortages in the Lockyer Valley are expected to reduce production over Burketown Townsville Charters 2019–20. Towers Mackay Mount Isa Most of the state’s lettuce production occurs in the SA2 geographical areas of Rockhampton Longreach Lockyer Valley—East, Lockyer Valley—West, Stanthorpe Region, Cambooya– Birdsville Bundaberg Wyreema, Southern Downs—West and Gatton. Charleville BRISBANE

The GVP for potatoes for 2019–20 is forecast to be $24 million, 40 per cent lower than DAF’s final forecast for 2018–19 and 54 per cent less than the average for the Weipa potatoes past 5 years.

Cairns Water shortages in the Lockyer Valley are expected to reduce production over Burketown Townsville 2019–20. Most of the state’s potato production occurs in the SA2 geographical Charters Towers Mackay areas of Atherton, Lockyer Valley—East, Lockyer Valley—West, Dalrymple, Mount Isa

Rockhampton Malanda–Yungaburra and Herberton. Longreach

Birdsville Bundaberg

Charleville BRISBANE

The GVP for watermelons for 2019–20 is forecast to be $29 million, 9 per cent less than DAF’s final forecast for 2018–19 and 14 per cent less than the average for Weipa melons the past 5 years.

Cairns Water shortages in the Lockyer Valley are expected to reduce production Burketown Townsville over 2019–20. Most of the state’s watermelon production occurs in the SA2 Charters Towers Mackay geographical areas of Burdekin, Collinsville, Chinchilla, Bargara – Burnett Heads, Mount Isa

Rockhampton Jondaryan and Lockyer Valley—West. Longreach

Birdsville Bundaberg

Charleville BRISBANE

Queensland AgTrends 2019–20 43 Lifestyle horticulture Production nurseries

Forecast Weipa nursery production The GVP for production nurseries for 2019–20 is forecast to be $939 million, 2 per cent greater than last year’s estimate and 4 per cent above the average for Cairns the past 5 years. Burketown Townsville Charters Towers Mackay Mount Isa Analysis and discussion

Rockhampton Longreach Australia’s population continues to increase, and the production nursery sector

Birdsville Bundaberg is expected to benefit from an associated increased demand for fruit, vegetables Charleville BRISBANE and plantings associated with urban development.

The retail sector continues to be dominated by big-box stores, while the influence of independent garden centres continues to decline. Although the number of retailers is relatively stable, individual outlets are now more likely to be located in prime retail locations and represent a smaller number of larger businesses. The influence of larger, more sophisticated retailers in the sector has provided more certainty to growers and they are now less speculative in the choice of the varieties they grow and in volumes of production.

Over the last 12 months, demand for stock exceeded supply to a limited extent. This trend is expected to continue in 2019–20 but, with the retail sector dominated by retailers operating to a high-volume, low-margin business model, the increased GVP in the nursery sector is expected to be driven by increased sales rather than margins.

As the nursery sector depends on a continuous supply of irrigation water, producers who rely on stored surface water may be impacted by the drought. However, water availability is not expected to have a material impact on production at the state level over 2019–20. Water restrictions in Sydney are expected to reduce demand from that region, but this is likely to be balanced by increased demand from Melbourne and South East Queensland.

Table 11 Production nurseries GVP by sector, 2019–20

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

Retail stock 412.7 43.9 Landscape stock 236.1 25.1 Fruit and vegetable stock 193.6 20.6 Forestry stock 82.9 8.8 Revegetation/rehabilitation stock 14.1 1.5 Total 939 .4 100 0.

Queensland AgTrends 2019–20 44 Turf

Forecast Weipa turf The GVP for turf for 2019–20 is forecast to be $327 million, the same as the final estimate for 2018–19 but 40 per cent higher than the original forecast for that year. Cairns

Burketown Townsville Analysis and discussion Charters Towers Mackay Mount Isa While the overall value of the industry has not changed since 2018–19, there has Rockhampton Longreach been some movement in the underlying factors contributing to the GVP. Growers

Birdsville Bundaberg are expected to benefit from an increase in prices in 2019–20, but this is likely Charleville BRISBANE to be balanced by decreased production levels caused by the drought in the southern Queensland growing regions.

Water-efficiency measures continue to deliver benefits for the industry, with some growers now able to reduce irrigation frequency from every second day to every third day. Smaller growers without access to on-farm water storage have been impacted disproportionately by drought conditions. This has led to a rationalisation, with some smaller growers leaving the industry. This has not necessarily reduced the overall area cultivated for turf, as some larger growers have increased their plantings.

The peak industry body, Turf Queensland, estimates that industry rationalisation has resulted in approximately 80 growers producing turf in Queensland. This is a 20 per cent decrease from the number reported in the 2018–19 forecast.

Cut flowers

Forecast Weipa cut flowers The GVP for cut flowers and foliage for 2019–20 is forecast to be $161 million. This is the same as the final estimate for 2018–19 but 3 per cent above the average for Cairns the past 5 years. Burketown Townsville Charters Towers Mackay Mount Isa Analysis and discussion

Rockhampton Longreach The GVP of the cut flower sector is expected to remain steady over 2019–20. Birdsville Bundaberg Demand for native plants and wildflowers is expected to remain strong, as these Charleville BRISBANE products are popular with domestic and export customers. There appears to be a developing market for certain flowers, grasses and palm fronds to be supplied specifically for their potential to be sold as dried products. Some growers are taking advantage of his situation and drying on-farm, but drying is also being undertaken by wholesalers.

In recent years, domestic producers have been impacted by competition from imports. However, from 1 September 2019, shipments of cut flowers and foliage from Kenya, Colombia and Ecuador that are produced using a systems approach will no longer be allowed into Australia without valid import permits. The permits have been introduced to address the high volumes of live pests of biosecurity concern that have arrived on imported cut flowers and foliage; however, by reducing supply, these new requirements could also benefit the domestic cut flower industry.

Queensland AgTrends 2019–20 45 Other crops Sugarcane

Forecast Weipa sugarcane The GVP for sugarcane for 2019–20 is forecast to be $1.020 billion. This is approximately 6 per cent lower than the GVP for the 2018–19 crop. Total revenue Cairns from the 2019–20 Queensland crop, in raw-sugar equivalent, is expected to be Burketown Townsville $1.58 billion. Charters Towers Mackay Mount Isa Analysis and discussion Rockhampton Longreach

Birdsville Bundaberg Queensland’s 2019–20 sugarcane crop is forecast to be 29.60 million tonnes, Charleville 889 000 tonnes lower than that for 2018–19. BRISBANE The lower forecast is a based on a number of factors. Overcast conditions in northern Queensland have reduced crop growth, while drought has had similar impacts in southern growing regions. In response to drought and low financial returns in recent times, some growers have elected to reduce inputs and/or ratoon their crops beyond the optimum for their growing region. This is expected to have a negative impact on cane yield.

The average commercial cane sugar (CCS) for Queensland’s crop is expected to be 13.60 in 2019–20. While this does not compare favourably with the CCS of 14.45 achieved in 2018–19, it is only slightly below the 5-year state average of 13.75. The CCS for 2018–19 was exceptional and is thought to be the highest state figure for at least 50 years.

As at 16 August 2019, Queensland Sugar Limited estimated its harvest pool return to be $392 per tonne international polarity scale (IPS). This is approximately 5.1 per cent higher than the 2018–19 final estimate of $373.

Despite the slightly higher sugar price, the average return to Queensland canegrowers for 2019–20 is forecast to be down 3.64 per cent from the final estimate for 2018–19, to $34.40 per tonne. This lower return is due to the expected lower CCS than for last season.

Forecast pricing is based on a single value for the upcoming season. Since changes were made to Queensland’s sugar marketing arrangements in December 2015, there are a variety of options available to growers to forward- price a proportion of their crop. Consequently, single values are now considered to be less representative of the financial returns to individual growers.

Industry situation

Indian sugar production will continue to be a significant influence on the global industry over the next 12 months.

In 2018, drought during India’s planting period (August to October) resulted in fewer plantings. There has also been flooding in one of the country’s most significant growing areas. Both of these factors are likely to result in reduced production in India.

However, during August 2019, the Government of India revised support programs to its industry. These changes could increase sugar exports from India, which, in turn, would likely maintain the currently depressed world sugar prices.

If world oil prices are low, Brazil’s industry tends to divert more of its crop away from ethanol and into sugar production. This could balance any decreased production from India. However, prolonged instability in the Middle East may raise oil prices, and so support sugar prices.

World sugar stocks remain at an all-time high. If demand for sugar outstrips production, the high levels of sugar in storage will most likely prevent price rises.

Queensland AgTrends 2019–20 46 Cotton

Forecast Weipa cotton The GVP for cotton for 2019–20 is forecast to be $237 million, 58 per cent less than DAF’s final estimate for 2018–19 and 59 per cent below the average for the Cairns past 5 years. Burketown Townsville Charters Towers Mackay Mount Isa Analysis and discussion

Rockhampton Longreach The area planted to cotton is forecast to fall by over 60 per cent to

Birdsville Bundaberg 45 000 hectares in 2019–20 and is expected to comprise mainly irrigated cotton. Charleville BRISBANE Cotton production is forecast to fall by about half to 86 000 tonnes of cotton lint and around 130 000 tonnes of cottonseed.

Water1068_Fig25 storages ThereDam have storage been significant levels decreases in irrigated water supplies into the major dams across the state. Fairbairn Dam has the highest level at 16.4 per cent, and the rest are at pretty dire levels.

60

50

40

30

20 Percentage of capacity

10

0 Beardmore Coolmunda Fairbairn Leslie

2018 2019

Figure 25 Stored volumes in major Queensland irrigation dams, September 2018 and 2019 Source: SunWater.

World production As detailed in Table 12, China was the world’s largest cotton producer in 2018–19, yielding just over 6 million tonnes and accounting for 23 per cent of world production. The next largest cotton producers were India, the United States and Brazil, contributing 22 per cent, 15 per cent and 11 per cent respectively to world production. India, the United States and Pakistan are forecast to produce more in 2019–20 than in 2018–19, but China is expected to produce the same amount. The United States is the world’s largest cotton exporter and is forecast to export 3.6 million tonnes of cotton in 2019–20, accounting for just under 40 per cent of world cotton exports.

Queensland AgTrends 2019–20 47 Table 12 World production of cotton, 2018–19 and 2019–20

Producer 2018–19 production Share of world production 2019–20 forecast (’000 tonnes) (%) production (’000 tonnes)

India 5 770 22 6 423 China 6 042 23 6 042 United States 3 999 15 4 760 Brazil 2 787 11 2 613 Pakistan 1 655 6 1 742 Turkey 806 3 893 Total world production 25 920 100 27 194

Note: Not all cotton producers are represented in the table. Source: Foreign Agriculture Service, USDA 2019, Cotton: world markets and trade monthly circular, August 2019.

International supply and demand For the major world importers, the United States Department of Agriculture (USDA) forecasts the following changes for 2019–20: • India will be up by 200 000 bales to 1.6 million due to higher internal prices. • Turkey will be up by 100 000 bales due to higher forecast mill use. • Pakistan will be up by 100 000 bales due to tighter stocks.

Changes to rates of cotton exports by most major exporters are also forecast for 2019–20: • United States exports will decrease by 700 000 bales due to lower supply. • Brazilian exports will increase by 500 000 bales due to higher early-season export.

As at September 2019, world cotton imports for 2019–20 are forecast to be 9.4 million tonnes and world closing stocks are expected to be 18.23 million tonnes. Total world production is projected to be 27.19 million tonnes, slightly more than the consumption of 26.5 million tonnes.

Queensland AgTrends 2019–20 48 Other major field crops Peanuts

Forecast Weipa peanuts The GVP for peanuts is forecast to be $13 million. This is 17 per cent below the forecast of March 2019 ($18 million). Cairns

Burketown Townsville Analysis and discussion Charters Towers Mackay Mount Isa Currently there is no subsoil moisture in the Central Queensland peanut-growing Rockhampton Longreach region around Kingaroy. Exacerbating this problem, many state dam storages are

Birdsville Bundaberg currently at very low levels. Fairbairn Dam in Central Queensland is currently at Charleville BRISBANE around 16 per cent capacity, the lowest on record since the dam was constructed in 1972. Glenlyon Dam, which supplies the Texas and Bonshaw regions of the northern New England Tableland in New South Wales, is currently at just 12 per cent capacity; and Beardmore Dam, of St George, is at only 6 per cent capacity. These record-low dam levels are impacting medium-priority irrigation water entitlements to agriculture, including peanuts in Central Queensland, for which no irrigation water entitlement is currently available. Also, there is no overland water flow through these catchment areas to fill on-farm irrigation water storages.

The only peanuts planted for the 2019–20 season are expected to be irrigated crops that use on-farm and local storages. Total Queensland plantings will depend on what is planted in northern Queensland (Atherton Tableland) and Rockhampton.

The area sown to peanuts is forecast to fall 33 per cent, from 6000 hectares in the previous season to 4000 hectares. However, as the new crop is expected to be irrigated, average yield is forecast to increase around 40 per cent, to average 3.25 tonnes per hectare. Overall, production is estimated to fall 7 per cent, from 14 000 tonnes in the 2018–19 season to 13 000 tonnes.

Some peanuts may fetch $1150 to $1200 per tonne for good-quality kernels. However, allowing for some potential downgrade in kernel quality due to continuing dry conditions, an average of $1000 per tonne is expected. The price is expected to remain unchanged from last season. Lower production is forecast to bring the peanut GVP commensurately lower.

Soybeans

Forecast Weipa soybeans The GVP for soybeans is forecast to be $8.5 million, around 4 per cent higher than the estimate for 2018–19 of $8.1 million. Cairns

Burketown Townsville Charters Analysis and discussion Towers Mackay Mount Isa The area sown to soybeans is forecast to be 12 800 hectares, 51 per cent higher Rockhampton Longreach than the 8500 hectares estimated for the previous season and 7 per cent above 15 Birdsville Bundaberg the 10-year average. The average yield is forecast to be just 1.45 tonnes per Charleville BRISBANE hectare, about the same as the estimate for 2018–19 but 21 per cent below the 10-year average of 1.83 tonnes per hectare. This allows for a drier than average spring and summer, in line with expectations of continued El Niño weather patterns. Production is forecast to be 18 550 tonnes, about 50 per cent more than the estimate for the previous season of 12 500 tonnes but 7 per cent below the 10-year average of 19 850 tonnes.

15 AgTrends 2008–09 to 2017–18.

Queensland AgTrends 2019–20 49 Summer cereal grains

Grain sorghum

Forecast Weipa grain sorghum The GVP for sorghum for the 2019–20 summer season is forecast to be $356 million, 7 per cent greater than the forecast in the March quarter for 2018–19. Cairns This is 13 per cent greater than the average for the past 5 years. Burketown Townsville Charters Towers Mackay Analysis and discussion Mount Isa

Rockhampton Longreach The area sown to sorghum is forecast to be 425 000 hectares, 11 per cent more

Birdsville Bundaberg than the 381 000 hectares estimated for the previous season and 5 per cent higher Charleville 16 BRISBANE than the 10-year average (2008–09 to 2017–18) of around 404 000 hectares. It is expected that grain growers will want to capitalise on plantings, given continued strong domestic demand from animal feedlots and firm export demand. However, actual plantings will depend on grain farms in southern and central Queensland receiving sufficient rainfall during the crop-sowing months (September to November) to boost the much-depleted subsoil moisture, particularly in southern Queensland.

The longer term weather outlook is potentially El Niño, or possibly dry conditions. To capture this probability, yield is forecast to fall 16 per cent below the 10-year average of around 3 tonnes per hectare, to 2.5 tonnes per hectare. This exceeds the average yield estimate for the last season (2.4 tonnes per hectare) by 4 per cent, again reflecting overall dry conditions.

The greater area sown, coupled with slightly higher yields, is forecast to take production to 1 062 500 tonnes, 16 per cent higher than the 913 000 tonnes estimated for the March quarter of 2018–19 and 12 per cent below the 10-year average of around 1.2 million tonnes.

Maize

Forecast

Weipa maize The GVP for maize is forecast to be $72 million. This is 1 per cent above the forecast made in the March 2018–19 quarter of $71 million and 33 per cent above Cairns the average over the past 5 years. Burketown Townsville Charters Towers Mackay Analysis and discussion Mount Isa

Rockhampton Longreach The area sown to maize is forecast to be 35 440 hectares, close to the 10-year 17 Birdsville Bundaberg average (2008–09 to 2017–18) but 6 per cent greater than the 33 370 hectares Charleville BRISBANE estimated for the previous season. To allow for the expected continuing El Niño dry weather patterns into the 2019–20 summer, yields are forecast to fall 14 per cent below the 10-year average, from 4.93 tonnes per hectare to 4.23 tonnes per hectare. This also allows for the possibility that some growers of irrigated maize may not have access to their medium-priority water entitlements in central and particularly southern Queensland. (Irrigation water allocations in the northern Queensland maize-growing region of the Atherton Tableland are not likely to be impacted.) Overall, the smaller yield is expected to be offset by the slightly larger area sown, giving a production forecast of 150 000 tonnes, the same as for the 2018–19 season but 14 per cent below the 10-year average production of 174 000 tonnes.

The price is expected to be $480 per tonne, marginally (1 per cent) higher than the estimate made in the March quarter for 2018–19 of $475 per tonne. Overall, the GVP of maize is forecast to be marginally higher in proportion to price.

16 ABS 2019, Agricultural commodities, Australia, cat. no. 7121. 17 ABS 2019, Agricultural commodities, Australia, cat. no. 7121.

Queensland AgTrends 2019–20 50 Winter cereal grains

Wheat

Forecast Weipa wheat The GVP for wheat is forecast to be just $205 million for 2019–20 (2019 winter crop). This is 10 per cent greater than the GVP estimate made for 2018–19 but Cairns 32 per cent below the average over the past 5 years.

Burketown Townsville Charters Towers Mackay Analysis and discussion Mount Isa

Rockhampton Longreach Autumn and winter conditions across the state’s grain-growing regions in the

Birdsville Bundaberg south have been extremely dry, particularly in July, which had below-average Charleville rainfall. As a result, yield expectation on the eastern and western Darling Downs BRISBANE remains below the long-term median. In contrast, however, central Queensland received reasonable sowing rains in autumn and above-average rainfall in July, increasing the chance of yields above the long-term median in this region. For spring, there is a significantly reduced chance of receiving above-average rainfall for most of the state’s cropping regions, indicated by a consistently negative Southern Oscillation Index. Conditions are so dry in southern Queensland that the yield outlook is below the 10th percentile of all years for the last 119 years. However, due to boosted subsoil moisture profiles in central Queensland, yield outlook is 10–20 per cent above the median yield of all years for this region, which is expected to produce about 85 per cent of the Queensland wheat crop.

The average yield outlook for the state is below the long-term median yield. Widespread and above-average rainfall across that state’s grain-growing regions, particularly in southern Queensland, would be needed to improve the current yield outlook and potential.

The area sown to wheat is estimated to be 372 500 hectares, marginally (1 per cent) below the estimate made in the March quarter for 2018–19 and 53 per cent below the 10-year average (2008–09 to 2017–18) of 797 000 hectares. In southern Queensland, 175 000 hectares was planted, but because of the very dry autumn and no follow-up rains during the winter crop-growing phase, 90 000 hectares had to be abandoned. This left a net of around 85 000 hectares that will be able to produce a saleable crop. The wheat that was left in the ground will be used as fodder for cattle feed.

Yields are expected to average around 1.5 tonnes per hectare, 29 per cent above the 1.17 tonnes per hectare of the previous season but 14 per cent below the 10-year average of 1.76 tonnes per hectare. These yields are forecast to take production to 562 475 tonnes, 29 per cent higher than the 437 667 tonnes produced in 2018–19 but 60 per cent below the 10-year average of 1.4 million tonnes. This highlights the impact of current and recent drought years.

Local wheat prices have softened somewhat below those expected, as wheat crops in South Australia, Western Australia and Victoria have been boosted by good rainfall. However, demand for grain—particularly wheat— from Queensland feedlots has been strong, giving support to white and coarse grain prices. The Australian Premium White wheat price is expected to average $364 per tonne, 15 per cent below the estimate for 2018–19 of $428 per tonne. Overall, higher forecast production is expected to more than offset the decrease in price, taking GVP commensurately higher.

Queensland AgTrends 2019–20 51 Barley

Forecast Weipa barley The GVP for barley for 2019–20 is forecast to be $28 million, 20 per cent below the forecast in the March quarter for 2018–19 and 63 per cent lower than the average Cairns for the past 5 years. Burketown Townsville Charters Towers Mackay Analysis and discussion Mount Isa

Rockhampton Longreach The area sown to barley is estimated to be 54 667 hectares, 16 per cent below

Birdsville Bundaberg that of the previous season (64 833 hectares). Very dry autumn conditions and Charleville BRISBANE lack of subsoil moisture, particularly in southern Queensland on the Darling Downs, greatly hampered planting opportunities. The current estimate for area sown is almost 50 per cent below the 10-year average (2008–09 to 2017–18) of 104 700 hectares.18 Yields are forecast to be marginally (2 per cent) lower than for last season, down from 1.38 tonnes per hectare to 1.36 tonnes per hectare, which is 36 per cent below the 10-year average of 2.12 tonnes per hectare. The notably smaller area sown estimated for this season, coupled with lower yields, is forecast to take barley production to 74 167 tonnes, down 17 per cent from the 89 700 tonnes estimated for the previous season and a significant 67 per cent below the 10-year average of around 222 000 tonnes. This reflects the very dry autumn and winter conditions, in addition to the dry conditions of last season.

Malting barley usually attracts a premium price above the feed barley price, and approximately 10 per cent of the barley crop will be malting barley grade. However, due to the high overall demand for barley by feedlots, the malting barley price is expected to stay in line with that of feed barley. The barley price is estimated to have fallen to $375 per tonne, down 4 per cent from the $390 per tonne estimated in the March 2018–19 quarter. Smaller production, coupled with a slightly lower price, is projected to reduce barley GVP commensurately.

Chickpeas

Forecast Weipa chickpeas The GVP for chickpeas is forecast to be just $83 million, 39 per cent below the forecast in the March quarter for 2018–19 and 78 per cent below the average for Cairns the past 5 years. Burketown Townsville Charters Towers Mackay Mount Isa Analysis and discussion

Rockhampton Longreach On average, about one-third of the state’s chickpeas are grown in central

Birdsville Bundaberg Queensland and two-thirds in southern Queensland. However, because of very dry Charleville BRISBANE autumn planting conditions and no follow-up rain during winter, the area planted to chickpeas in southern Queensland has contracted to about 142 000 hectares, down 27 per cent from the 195 000 hectares estimated in the March quarter for the 2018–19 season. Conversely, the area sown in central Queensland has increased to 110 000 hectares, up more than 50 per cent from the 70 000 hectares estimated in the March quarter for the previous season. This means that about three-quarters of Queensland’s chickpeas are forecast to be produced in central Queensland, and the remainder in southern Queensland. This reflects the impact of the protracted drought on Queensland, particularly in the south.

18 ABS 2019, Agricultural commodities, Australia, cat. no. 7121.

Queensland AgTrends 2019–20 52 Despite the dry conditions, particularly in southern Queensland, the average yield is forecast to increase slightly to 0.93 tonnes per hectare, up 6 per cent from 0.87 tonnes per hectare. This is because the majority of the crop has been planted in central Queensland, which has better soil moisture profiles (from ample rains) than the much-depleted subsoil moisture profiles of southern Queensland. The smaller area sown is forecast to more than offset increased yields, causing a 23 per cent fall in production from 170 000 tonnes to around 131 000 tonnes. The current production forecast is about half of the 10-year average (2008–09 to 2017–18) of 258 000 tonnes, and reflects unusually dry conditions in combination with planting responses to a lower chickpea price.

India’s tariff on Queensland pulses (including chickpeas) has remained in place since March—it is 60 per cent on the import price of chickpeas and 33 per cent on the import price of lentils. This has suppressed Indian demand for pulse imports and the price received by Queensland pulse growers. As a result, the average chickpea price has fallen around 20 per cent from $800 per tonne in the previous quarter to around $630 per tonne for both central and southern Queensland. Reportedly, some grain growers have opted to switch to alternative but good-return crops such as barley and wheat. However, this has been hampered by the dry conditions over the Queensland autumn planting and winter crop-growing seasons. The lower forecast chickpea production coupled with a lower price is projected to take GVP commensurately lower.

Mung beans

Forecast Weipa mung beans The GVP for mung beans is forecast to be $16.5 million, 8 per cent below the estimate in the March quarter for 2018–19 of $18 million.19 Cairns

Burketown Townsville Charters Towers Analysis and discussion Mackay Mount Isa

Rockhampton The area sown to mung beans is forecast to be the same as for the drought- Longreach impacted crop of last season, at 50 000 hectares.20 This lies 7 per cent below Bundaberg Birdsville the 6-year average of 54 000 hectares.20 Because of the expected continuing Charleville BRISBANE dry conditions in spring and summer of 2019–20, yields are forecast to average the same as last season at 0.3 tonnes per hectare, 63 per cent under the 6-year average of 0.8 tonnes per hectare. With area sown and yields expected to remain unchanged from last season, production is forecast to remain the same at 15 000 tonnes. This lies 70 per cent below the 6-year average of around 49 000 tonnes.

The price is estimated to have fallen 8 per cent from $1200 to $1100 per tonne since the March quarter of 2018–19. Interestingly, the current price is approximately in line with the 6-year average of $1067 per tonne. With the production forecast to remain unchanged, GVP is projected to fall commensurately with price.

19 Forecast and analysis provided by Tod Jorgensen, Associated Grain, CEO, Dalby, Queensland. 20 AgTrends 2013–14 to 2018–19.

Queensland AgTrends 2019–20 53 Fisheries

Forecast The GVP for fisheries for 2019–20 is forecast to be $405 million, 3 per cent greater than the estimate for 2018–19 and 9 per cent greater than the average for the past 5 years. The commercial fishing sector provides nearly half of the forecast GVP at $181 million, while the aquaculture sector with $130 million and the recreational sector with $94 million21 provide 32 per cent and 23 per cent respectively.

The forecast GVP for Queensland’s aquaculture industry of $130 million is 8 per cent greater than DAF’s final estimate for 2018–19 and 22 per cent greater than the average for the past 5 years.

Analysis and discussion

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 based on three main sectors—crustaceans, finfish and molluscs. The crustacean sector includes the total catch of prawns, bugs, crabs and tropical rock lobster, while the finfish sector is made up of inshore and offshore finfish. The mollusc sector is made up of the total catch of scallops and squid.

Figures 26 and 27 indicate the output for fisheries managed by Fisheries Queensland for the major categories over the five financial years up to 2016–17.

The total catch and GVP for all subcategories are shown in Figures 28 and 29. Catch (T) by category – Queensland Fisheries

25 000

20 000

15 000 Tonnes 10 000 Crustaceans

Molluscs 5 000 Finfish

Total 0

2012–13 2013–14 2014–15 2015–16 2016–17

Financial year

Figure 26 Queensland fisheries total catch by major categories, 2012–13 to 2016–17

21 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, .

Queensland AgTrends 2019–20 54 GVP by category – Queensland Fisheries

250

200

150 Value ($m) 100 Crustaceans

Molluscs 50 Finfish

0 Total GVP

2012–13 2013–14 2014–15 2015–16 2016–17

Figure 27 Queensland fisheries currentFinancial GVP yearby major categories, 2012–13 to 2016–17

Catch (T) by sub-category – Queensland Fisheries

9000

8000 Crabs 7000 Offshore finfish 6000 Inshore finfish 5000 Scallops

4000 Rock lobster

Tonnes Prawns 3000 Squid 2000 Other fish

1000 Other crustaceans 0

2012–13 2013–14 2014–15 2015–16 2016–17

Financial year Figure 28 Queensland fisheries catch by subcategories, 2012–13 to 2016–17 GVP by sub-category – Queensland Fisheries

90 Crabs 80 Offshore finfish 70 Inshore finfish 60 Scallops 50 Rock lobster

Value ($m) 40 Prawns 30 Squid 20 Other fish

10 Other crustaceans 0

2012–13 2013–14 2014–15 2015–16 2016–17

Financial year

Figure 29 Queensland fisheries current GVP by subcategories, 2012–13 to 2016–17

Queensland AgTrends 2019–20 55 Trend analysis on the major categories indicates that all categories will demonstrate some level of decline. Total catch (t)

21 000

20 000

19 000

18 000

Tonnes 17 000

16 000

15 000

14 000 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 2021–22

Financial year Figure 30 Queensland fisheries total catch trend analysis, 2012–13 to 2021–22

Aquaculture

The gross value of the Queensland aquaculture industry is forecast to be $130 million in 2019–20. This figure is 8 per cent greater than the previous year and is 22 per cent greater than the average over the past 5 years.

Prawn farming remains the largest sector of the Queensland aquaculture industry. This sector is expecting an increase in production from the previous season due to the recent investment by Tassal—purchasing two grow-out farms in Queensland—and the continued recovery of farms located on the Logan River following the outbreak of white spot virus. The farmgate value of prawns is predicted to approach $90.0 million.

Barramundi, the second-largest sector, is expected to increase production from the previous season and achieve an estimated value of $30.0 million.

Freshwater fish production (primarily silver perch, Murray cod and jade perch) has an estimated value of $3 million, which is a stable annual figure.

The oyster and hatchery sectors are expecting to increase slightly on production levels achieved in 2018–19.

Queensland AgTrends 2019–20 56 Forestry

Forecast The GVP for the forest-growing sector of the Queensland forest industry for 2019–20 is forecast to be $283 million. This is 1 per cent higher than DAF's final estimate of $279 million for 2018–19, and 5 per cent higher than the average of $270 million for the period 2016–17 to 2018–19.

DAF forecasts that the first-stage processing sector of the industry will contribute $484 million to the Queensland economy in 2019–20; this is 3 per cent higher than the 2018–19 final estimate of $472 million.

Together, the forest-growing and first-stage processing sectors are forecast to make a contribution of $767 million to the Queensland economy in 2019–20.

Analysis and discussion

The modest increase in the forecast GVP for the forest-growing sector for 2019–20 reflects an easing of sales of softwood into domestic markets. Exports of plantation softwood sold in 2019–20 are also forecast to be lower than in 2018–19, as the salvage of cyclone-damaged plantations at Byfield concludes.

The forecast sales of state-owned native forest timber in 2019–20 are 6 per cent lower than for the previous financial year. This is mainly due to a decrease in demand for lower quality logs in central Queensland and a reduction in the uptake of poles. In 2018–19, sales of native cypress and hardwood log timber were 260 000 cubic metres, which is a 4 per cent increase from the 251 000 cubic metres sold in 2017–18.

Although no reliable data is available for privately owned native forest production, anecdotal evidence suggests that approximately 50 per cent of locally sourced hardwood timber is from privately owned native forests. It is expected that demand for hardwood log timber from privately owned land in both domestic and export markets will remain stable for the financial year, and that a similar volume will be harvested in 2019–20.

The prospects for the forest and timber industry are largely driven by the activity in the housing and construction sector, which accounts for most of the demand for domestically produced timber in Queensland, in particular for plantation-sourced timber. The construction sector is experiencing a decline in activity and this is reflected in a 15 per cent reduction in dwelling commencements through 2017–18. Initial statistics for 2019 indicate that the dwelling commencements have continued to ease at a similar rate to the previous year. BIS Oxford Economics forecasts that Queensland will continue to experience a downturn in dwelling commencements until the early 2020s.

Sawn timber production in Queensland is also impacted by the balance of forest and timber industry imports and exports. Although only provisional 2018–19 information is available, overseas trade data shows a modest increase in the value of imports of forest and timber products to $898 million. This increase was attributed to pulp and paper imports, which increased from $365 million in 2017–18 to $417 million in 2018–19. Imports of both log material and manufactured wood products remained constant between 2017–18 and 2018–19. For the same period, exports of manufactured wood products and pulp and paper via Queensland ports increased by 12 per cent. However, there was an easing in the exports of log material with a decrease of 1 per cent to $165 million for 2018–19, which reflects anecdotal reports of a slight easing in demand for timber by China, in particular for native acacia species.

Queensland AgTrends 2019–20 57 A note about forest industry data sources

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 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.

Queensland AgTrends 2019–20 58 Special feature: Developing winged-pearl oyster farming for Aboriginal and Torres Strait Islander communities

The winged-pearl oyster (Pteria penguin) is one of four The proposed project would assess the potential to major pearl oyster species used globally for commercial develop Pteria penguin farming in tropical Australia pearl production. Recent years have seen increasing for pearl and pearl-meat production by Aboriginal and demand for mabe pearls (blister pearls or half-pearls) Torres Strait Islander communities. Pearl farming would from export and domestic markets, stimulating deliver regional industry diversification, training and pearl production in the Pacific. However, despite its skills development, income generation and employment abundance along our northern coastline, Pteria penguin pathways. It could also foster the development of is not used for pearl production in Australia. upstream and downstream industries in spat collection and value-adding. Importantly, the project aligns with Agricultural economist Bill Johnston is working on a Australian and Queensland government policies that DAF-supported PhD thesis that investigates the support northern development as well as growth for economics of pearl culture in the western Pacific. His these communities. research highlights the unique economic potential for mabe pearl and pearl-meat production by coastal The major goal of the project is to show both the Aboriginal and Torres Strait Islander communities in technical and economic feasibility of Indigenous pearl Queensland. farming in Queensland. Ultimately, this work could help to the develop a broader tropical Indigenous pearl Much of the technological knowledge for the production farming sector. Additionally, it will establish a spat of Pteria penguin originated from projects funded by the collection program across numerous sites in northern Australian Centre for International Agricultural Research, Australia plus demonstration pearl farms in Aboriginal and the results of these projects show the potential and Torres Strait Islander communities. These operations benefits from ongoing economic research. The real will be owned and staffed by the communities. Members excitement is the possibility of extending the success of of these communities will be trained in all aspects 22 the projects in Fiji and Tonga to coastal communities of mabe oyster farming and production, as well as all in northern Australia. A proposed project aims to post-harvest, artisanal and value-adding work investigate the development of community-centric mabe associated with the production of mabe pearls, pearl farms through the Cooperative Research Centre for pearl-shell handicrafts and pearl meat. Developing Northern Australia.

Production of mabe pearls to a commercial standard can be achieved with minimal training. The production period (9–10 months) is shorter than for round pearls, and specialised technical skills are not required. Community members could undertake mabe pearl production as well as handicraft production for domestic tourist markets.

An interesting by-product from this industry is pearl meat, which is in high demand and commands high prices (>$100 per kilogram fresh and $400 per kilogram dried) in niche domestic and overseas markets.23 Current Australian pearl-meat production is low at about 200 kilograms per year and, as a result, demand for pearl meat far exceeds supply. However, Pteria penguin is a fast-growing species with a relatively high meat yield and may be an appropriate species for economically viable pearl-meat production in Australia. Top: Jewellery made using mabe pearls Bottom: Mabe pearls in the shell

22 For example, ‘Half-pearl industry development in Tonga and Vietnam’; see aciar.gov.au. 23 Cygnet Bay Pearls, . Queensland AgTrends 2019–20 59 Notes

• 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.

Definitions

crops field and horticulture crops fisheries trawl and non-trawl fishing, and aquaculture forestry log sawmilling and timber dressing gross value of the value of recorded production at wholesale prices realised in the commodities produced marketplace (e.g. cattle sold for slaughter and sugarcane 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 2019–20 60 Queensland AgTrends 2019–20 Forecasts and trends in Queensland agricultural, fisheries and forestry production daf.qld.gov.au