Drought continues but farmers find 'paydirt' at last

Strong livestock markets and a steady national crop value is set to fill the pockets of Australian farmers, a top economic forecast shows.

The value of agriculture, fisheries and forestry production in Australia is set to reach a record $106.4 billion in the 2025-26 financial year.

The forecast by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is $14 billion more than the previous year.

ABARES Executive Director Jared Greenville said agricultural production alone was expected to total $99.5 billion - the highest on record.

"Livestock prices continue to strengthen on the back of firm global and domestic restocker demand, lifting the value of livestock and livestock product output even as turn-off of sheep, lambs and cattle moderates," Dr Greenville said on Tuesday.

"Combined agriculture, fisheries and forestry export value is forecast to rise to $83.9 billion in 2025–26, setting another record."

Farm profitability is also expected to improve, with average broadacre farm cash income forecast to reach $227,000 per farm in 2025–26.

Australia's national winter crop outlook also remains robust, with production on track to reach 66.3 million tonnes - the second largest winter crop on record.

Dr Greenville said harvest is well under way across all states, with significantly above-average yields reported in northern NSW, Queensland and Western Australia. 

But some parts of southeast Australia received a dry spring, which adversely impacted yields in those areas. 

"These latest forecasts highlight the continued strength, resilience and global competitiveness of Australia's agriculture, fisheries and forestry sectors as they head into 2026," he said. 

This is despite a drier than normal summer across large parts of Australia. 

The one anomaly in the positive outlook is that wine grape production and prices set to fall in 2025-26.

It is forecast production will fall by 11 per cent to 1.4 million tonnes - that's 10 per cent below the 10 year average.

And it is not expected to get any better with challenging seasonal conditions and elevated input costs on the horizon.

At the same time, subdued domestic and international consumption is anticipated to continue limiting winemaker demand for grapes in 2025-26, further pressuring prices and reducing incentives for wine grape production.