Australian agricultural export values fall by 8.5%, but beef exports boom

The latest Australian Agricultural Exports Report by Rural Bank has revealed a notable decline in the value of the nation’s agricultural exports, which fell by 8.5% to $72.4 billion in the 2023-24 financial year. This is a significant drop of $6.7 billion compared to the record high achieved in 2022-23. 

States with substantial cropping industries were the most affected by this downturn, with Western Australia, NSW, and South Australia experiencing the largest declines. Conversely, Victoria and Queensland were the only states to record growth in export value. Queensland, in particular, saw a substantial rise in beef exports, propelling it to become Australia’s second-largest agricultural exporter, surpassing Western Australia and NSW. 

Neil Burgess, Senior Manager Industry Affairs at Rural Bank, highlighted that while cropping exports were the primary driver of the overall decline, the sector still recorded its second most valuable year on record.  

"The value of crop exports fell by $8.4 billion, or 27.3%, but agriculture accounted for a slightly greater share of Australian goods exports, growing to 13.5%," Mr Burgess said. 

Despite the challenges in cropping, the value of other agricultural commodities rose by $1.7 billion (3.6%), reaching a record high.  

Notably, the cattle industry experienced the most significant growth in export value, increasing by $1.6 billion (over 12%) due to heightened production and robust demand from the US.  

Sheep industry exports also saw a moderate lift to a record total of $5.1 billion. Wool faced a decline of 12%. 

Looking forward, the report indicated wool and dairy exports were expected to face further challenges in 2024-25, with reduced production and lower prices anticipated.  

Mr Burgess noted that the horticulture sector was forecast to add growth, driven by better production and pricing conditions. 

Top trading partners: China and the US 

China remained Australia’s top export market for agricultural commodities, with export values increasing for a third consecutive year by 2% to $16.8 billion.  

This growth was largely driven by barley, cotton, and wine, though other products like wheat, dairy, wool, and sheep meat saw significant declines. 

The US also saw an impressive 21% increase in Australian agricultural exports, driven primarily by beef.  

"Beef export value is set to increase again in 2024-25 as production grows and higher prices are supported by tight US supply," Mr Burgess added. 

What the report said about: Cattle 

Australia's cattle industry saw a remarkable year in 2023-24, with beef export values surging by $1.6 billion (+12.3%) to reach a record $14.7 billion. This growth was primarily driven by an increase of $1.4 billion (+72.1%) in exports to the US, where reduced domestic production fuelled demand for Australian beef. 

The year also saw significant increases in both frozen and fresh beef exports, with total beef export volume rising by 26.7% to 1.3 million tonnes, the second-highest on record. Despite this volume increase, the average export price of beef fell by 8.9%, reflecting lower local cattle prices. 

However, the live cattle export market faced challenges, with values declining by 24.6% due to weaker prices.  

The US emerged as Australia’s top export market, with China falling to second place, recording an 8.6% decline in export value. 

Looking ahead, Australian beef export values are forecast to rise again in 2024-25, supported by increased production and strong demand from the US.  

Marginal declines are expected in South Korea and Japan due to rising domestic production in those countries.  

China’s economic challenges may also limit growth in export values to that market.  

What the report said about: Sheep 

Australia's sheep industry achieved a record export value of $5.1 billion in 2023-24, marking a $309.3 million (+6.5%) increase from the previous year. This growth was driven primarily by a 26.3% surge in sheepmeat export volume, which more than compensated for a decline in average unit prices. 

Lamb exports led the charge, with export value rising by $344.3 million (+10.7%) to a record $3.6 billion. Despite a 13.2% drop in average export prices, the significant volume increase kept the overall export value strong. However, the mutton market faced challenges, with export values slightly declining by 0.5% to $1.2 billion, even as volumes reached record highs. 

Sheep skin exports saw a modest increase, with values up by $10.2 million (+4.8%) to $225 million. However, live sheep exports continued their downward trend, falling by 45.5% in value to $46.3 million, reflecting ongoing challenges in the sector. 

The US reclaimed its position as Australia’s largest sheep export market, with values increasing by $79.6 million (+6.9%) to $1.2 billion. The Middle East, particularly Iran, saw the most significant growth, with export values soaring by 64% to $1.2 billion. 

Looking ahead to 2024-25, the outlook for Australian sheep exports is stable, with expected higher prices offsetting lower volumes due to tighter supply. While lamb and mutton prices are likely to increase, the phase-out of live exports may continue to challenge the industry. 

What the report said about: Wool 

The Australian wool industry experienced a challenging year in 2023-24, with export values falling by $382.8 million (-12%) to a total of $2.8 billion. This marked the second consecutive year of decline, driven by weak demand that pushed wool prices to their lowest levels since 2014-15. The average export price of wool fell by 13.9% to $8,307/tonne, with the most significant price drops observed in fine wools, particularly those below 20-micron. 

While there was a 2.2% increase in export volume, which marked the fourth consecutive year of growth, it was not enough to offset the steep decline in prices. The expanding sheep flock has contributed to a 38.1% rise in export volume since 2019-20, but this was accompanied by a drop in the value of exports due to falling prices. 

China remained the dominant market for Australian wool, accounting for 84.6% of the total export value, despite a $154 million (-6.1%) decline to $2.4 billion. Export volume to China increased by 7%, reaching its highest level since 2006-07. In contrast, export volumes to India and Italy fell by over 20%, leading to significant declines in export value—31.2% and 39.1% respectively. 

The outlook for 2024-25 remains bleak, with further declines in both export prices and volumes expected to drive wool export values lower for a third consecutive year.  

Export prices are likely to continue their downward trend due to weak global demand, particularly from China, Europe, and the US, where challenging economic conditions persist. 

Adding to the difficulties, the volume of wool exports is expected to decline, breaking the growth trend of the past four years. Dry conditions across major sheep-producing regions have halted flock expansion, leading to a projected 10.3% decline in the number of sheep shorn in 2024-25. This reduction, combined with lighter wool cuts due to dry conditions, could see export values fall by around 10% to $2.5 billion, making it another tough year for the Australian wool industry.