FEATURE ARTICLE 2: THE AGRICULTURE INDUSTRY IN WESTERN AUSTRALIA
Despite experiencing two severe droughts in the five years between 2000-01 and 2004-05, the value of agriculture production in Western Australia increased from $4,387 million to $5,149 million - a rise of $762 million (17.4%). However, there was considerable fluctuation in agriculture production from year-to-year over this period. For example, in 2004-05, the gross value of production in Western Australia decreased by 17.9% ($1,125 million) to $5.1 billion, following strong growth in 2003-04 of 37.9% ($1,724 million). Drought conditions have also affected agriculture production across Australia and appears to have had greater impact in other states and territories, with Western Australia's contribution to total Australian agriculture production rising from 12.8% in 2000-01 to 14.4% in 2004-05. However, the Australian Bureau of Agricultural and Resource Economics (ABARE) has forecast decreases in Western Australia's grain production for 2006-07 due to the impact of the 2006 drought.
Western Australia is a major grain grower, contributing significantly to Australia's wheat and barley production. Fruit production is also prominent, mainly confined to the more temperate areas of the state between Gingin to the north of Perth and Albany on the south coast, where weather conditions are conducive to the cultivation of a wide variety of fruits. Apples are the principal orchard fruit crop grown in Western Australia. Carrots and potatoes are the major vegetable crops. Pastoral activities are also widespread in Western Australia, with livestock raised being primarily cattle for beef production, and sheep for meat and wool. Between 2000-01 and 2004-05, crops were the major source of income from Western Australian agriculture, followed by livestock for meat, and livestock products such as wool, milk and eggs.
This article examines the performance of Western Australia's agriculture industry over the five years to 2004-05, in light of the adverse weather conditions experienced over that time. It looks at the volume and gross value of agriculture production for Western Australia's major agriculture produce, the changing numbers of livestock on farms and the value of agriculture exports in 2004-05. More information will become available from the 2005-06 Agriculture Census due for release in November 2007.
DROUGHT AND AGRICULTURE PRODUCTION
While droughts can occur in all parts of Western Australia, they are most economically damaging in the south-west of the state, an area encompassing most of the state's population and much of its agriculture. However, historically, variability of rainfall in the south-west has been smaller than in the south-east of the state and severe widespread droughts in individual years have been less of an issue in the south-west, although in recent decades this area has experienced a general decline in rainfall.
In recent times, drought has had a major impact on agriculture production in Western Australia. Drought conditions in 2002 impacted negatively on the volume of wheat (down 58.3%), barley (down 53.3%) and canola (down 50.5%) produced in the state in 2002-03. With drought conditions also occurring in 2006, ABARE has forecast decreases in wheat, barley and canola production of 61.9%, 63.6% and 69.5% respectively.
Agriculture income tends to vary significantly from year-to-year, mainly due to variations in production and prices received by farmers for their products. While the current drought is expected to impact on the production of wheat, barley and canola, it is less clear what will happen to the prices of these crops. ABARE expects the decrease in grain production to be offset to some extent by a general rise in grain prices in 2006-07. The 2006 drought is expected to have a similar impact on agriculture production as the 2002 drought, with production increasing strongly in the following year. ABARE predicts that not all of this increased production will result in higher agriculture income. For example, the slaughtering of livestock is forecast to be higher in 2006-07, but farmers are likely to receive lower prices for their stock, resulting in lower agriculture income in 2006-07.
RURAL COMMODITY PRICES
The Western Australian Department of Treasury and Finance compiles an index of rural commodity prices for the state's major agriculture exports, including wheat, barley, lupins, wool, beef and sheep. Over the last five years, rural commodity prices have climbed to record highs for Western Australia's produce, although they have fallen away in the most recent years. Between 1999-2000 and 2002-03, Western Australia's rural commodity prices increased by 50.5% to reach an all time high in 2002-03. Between 2002-03 and 2005-06, rural prices have fallen by 22.5%.
RURAL COMMODITY PRICES, Western Australia
VALUE OF AGRICULTURE PRODUCTION
Generally, movements in rural commodity prices match movements in the value of agriculture production and this has been the case for Western Australia in recent years. In 2001-02, the value of Western Australia's agriculture production increased by 26.3%, as rural commodity prices rose by 6.9%, while in 2004-05 there was a decrease in both the value of the state's agriculture production and rural commodity prices of 17.9% and 9.0% respectively. However, there were years when prices and production values moved in opposite directions. For example, in 2002-03, rural commodity prices rose by 15.5% and the value of agriculture production decreased by 17.9%, as a result of an offsetting decline in agriculture production volumes.
VALUE OF AGRICULTURE PRODUCTION, Western Australia
WESTERN AUSTRALIA'S CONTRIBUTION TO NATIONAL AGRICULTURE PRODUCTION
Western Australia's contribution to Australia's total agriculture production increased from 12.8% to 14.4% between 2000-01 and 2004-05. In 2000-01, Western Australia contributed $4,387 million to Australia's total agriculture production of $34,237 million. By 2004-05, this contribution increased to $5,149 million of Australia's total of $35,555 million. However, there was some volatility during this period. Western Australia's share of Australian agriculture production ranged from a low of 12.8% in 2000-01 to a high of 17.0% in 2003-04, as production recovered strongly following the 2002 drought. In 2002-03, the year affected by the drought, Western Australia's share of Australian agriculture production decreased to 14.0% ($4,550 million).
Over the five years to 2004-05, crop production has risen from $2,815 million to $3,371 million in Western Australia. This was mainly due to a 28.9% rise in the production of cereals for grain. The main cereals grown for grain are wheat and barley. Some of the state's other major crops, like apples, carrots and potatoes, have recorded falling production over the same period.
WESTERN AUSTRALIA'S AGRICULTURE PRODUCTS
Western Australia's agriculture is divided into three major categories, crops, livestock for meat and livestock products. Crops include grain production, as well as fruit and vegetables. In 2004-05, crops made up 65.5% of total agriculture production in Western Australia. Livestock for meat made up 22.4% of total production in that year and includes cattle (beef), calves (veal), sheep (mutton), lambs (lamb), pigs (pig meat), poultry (chicken) and other livestock. Livestock products contributed 12.1% to total production in 2004-05 and includes wool, milk and eggs.
VALUE OF CROP PRODUCTION, Western Australia
% of total crops
|Cereals for grain |
|Legumes for grain |
|Fruit and nuts(a) |
|Nursery production |
|Pasture and grasses |
|Other crops |
|Total crops |
|^ estimate has a relative standard error of 10% to less than 25% and should be used with caution |
|(a) Excludes grapes. |
|Value of Agricultural Commodities Produced, Australia, cat. no. 7503.0. |
Wheat and barley
Western Australia's wheat production contributed 41.5% to Australia's total wheat production in 2004-05. Wheat is the state's most important agricultural product, accounting for 34.8% of total agriculture production and 53.2% of total crop production in 2004-05. Between 2000-01 and 2004-05, wheat production increased by 48.2% (2,805,000 tonnes) to 8,619,000 tonnes or by a gross value of $309 million (20.8%) from $1,484 million to $1,793 million. However, in 2002-03, wheat production dropped by 47.8% to 4,047,000 tonnes as a result of the drought, before recording the largest recovery on record in the following year, with production increasing by 173.5% or 7,023,000 tonnes.
Barley production followed a similar pattern to wheat production over the period. Barley production rose by 83.3% (1,131,000 tonnes) between 2000-01 and 2004-05, from 1,358,000 tonnes to 2,489,000 tonnes. Reflecting this increase was a rise in the value of barley production from $256 million to $436 million. As with wheat, barley production decreased in 2002-03 by 0.7% to 1,349,000 tonnes (or $309 million), before increasing again to 3,170,000 tonnes (or $542 million) in 2003-04.
WHEAT AND BARLEY PRODUCTION, Western Australia
|Agricultural State Profile, Western Australia, 2004-05, cat. no. 7123.5.55.001 |
Fruit production is mainly confined to the more temperate regions of Western Australia, with apples the principal orchard fruit grown in Western Australia. The four most common varieties produced in 2004-05 were Pink Lady (10,900 tonnes or 30.4% of total apple production), Granny Smith (9,100 tonnes or 25.3%), Gala (4,900 tonnes or 13.6%) and Sundowner (2,900 tonnes or 8.1%). Apple production has been relatively poor in recent years, with the volume of apples produced decreasing in each year between 2000-01 and 2004-05. Apple production declined by an average of 4.1% (1,840 tonnes) per year, from 45,100 tonnes in 2000-01 to 35,900 tonnes in 2004-05.
Despite the decrease in the volume of apples produced, the gross value of apple production increased from $37 million in 2000-01 to $40 million in 2004-05. The gross value of apple production did, however, fluctuate somewhat from a low of $36 million in 2002-03 to a high of $41 million in 2003-04.
Potatoes and carrots
Potatoes are the major vegetable crop produced in Western Australia, accounting for 18.0% of total vegetable production in 2004-05, mainly concentrated in the higher rainfall areas of the state's south-west. The production of potatoes remained fairly constant between 2000-01 and 2004-05, with an increase in production from 75,500 tonnes to 81,200 tonnes over the entire period.
The gross value of potato production fluctuated slightly more over this time. The gross value of potato production reached a high of $31 million in 2000-01, before dropping to $27 million in 2001-02 - despite potato production increasing in that year. A gradual increase followed in each of the next three years, with gross values reaching $34 million in 2002-03 and $35 million in 2003-04 and 2004-05.
Carrots are the other major vegetable crop produced in Western Australia, accounting for 17.5% of vegetable production in 2004-05. Nevertheless, the number of carrots produced in the state decreased from 80,300 tonnes to 66,200 tonnes between 2000-01 and 2004-05 (down 17.6% or 14,100 tonnes). There were some good years however, with production increasing in 2001-02 and 2002-03 to 88,200 tonnes and 88,000 tonnes respectively.
The gross value of carrot production also recorded a decline over the five year period, down from $43 million to $34 million between 2000-01 and 2004-05. However, in 2001-02 and 2002-03, the gross value of carrot production did increased to $51 million and $50 million respectively.
Livestock for meat
The value of livestock produced for meat has increased by $208 million (21.9%) over the five years to 2004-05 in Western Australia. The main livestock driving this growth was cattle (and calves) and sheep (and lambs), increasing by $114 million (24.7%) and $72 million (23.3%) respectively. However, the total number of livestock slaughtered decreased by 1,061,200 (15.4%) over the period.
Pastoral activities are widespread in Western Australia. In the southern areas of the state livestock are usually raised in conjunction with grain growing (i.e. wheat-sheep farming of the wheatbelt), while in the north livestock are generally grazed on large specialist stations (i.e. extensive cattle pastoralism). The livestock raised are primarily sheep for meat and wool, and cattle for beef production.
VALUE OF LIVESTOCK PRODUCED FOR MEAT, Western Australia
% of total livestock
|Cattle (and calves) |
|Sheep (and lambs) |
|Other livestock |
|Total livestock |
|np not available for publication but included in totals where applicable, unless otherwise indicated |
|Value of Agricultural Commodities Produced, Australia, cat. no. 7503.0. |
Cattle (and calves)
Cattle (and calves) raised for meat production in Western Australia accounted for 11.1% of the value of state agriculture production and 49.6% of state livestock production in 2004-05. The number of meat cattle (and calves) increased slightly between 2000-01 and 2004-05, from 2,001,000 to 2,011,000. However, there was a much lower number of meat cattle (and calves) in the three intervening years. Cattle (and calf) numbers decreased to 1,980,000 in 2001-02, then to 1,815,000 in 2002-03, before increasing to 1,962,000 in 2003-04. The lower number of cattle (and calves) was due to drought conditions limiting the amount of water and feed available to rear livestock, and as a consequence, many more cattle (and calves) were slaughtered during this period. Since 2001-02 (374,301), the number of cattle (and calves) slaughtered increased in each year to 434,557 in 2002-03, 467,609 in 2003-04 and 514,800 in 2004-05. Over the whole five year period, cattle (and calve) slaughterings rose by 22.3% or 93,800.
The gross value of meat cattle (and calves) increased significantly between 2000-01 and 2004-05, from $458 million to $572 million, but there was some fluctuation in the intervening three years. After initially increasing to $476 million in 2001-02, the gross value of meat cattle (and calves) dropped to $467 million in 2002-03, in line with a decrease in cattle (and calf) numbers in that year. The gross value of meat cattle (and calves) increased again in 2003-04 to $489 million.
Sheep (and lambs)
In 2004-05, sheep (and lambs) for meat production accounted for 7.4% of the value of total agriculture production and 33.0% of total livestock production in Western Australia. Sheep (and lamb) flocks, during the five years to 2004-05, showed a significant increase, rising by 10.6% (2,463,000) from 23,129,000 to 25,592,000.
Despite the higher number of sheep (and lambs) being raised in the state, slaughterings actually decreased from 5,911,300 to 4,671,900 between 2000-01 and 2004-05. The most significant decline occurred in 2001-02, when the number of sheep (and lambs) slaughtered fell by 2,093,373 or 35.4%. The gross value of sheep (and lamb) production increased in each year between 2000-01 and 2002-03, but decreased in each of the following two years. Overall, the gross value of sheep (and lamb) production rose by $72 million or by an annual average of $14,360 (4.7%) over the period.
Western Australia's pig herd numbers showed an overall decline from 286,000 to 266,000 between 2000-01 and 2004-05, despite some strong gains in the initial part of the period. Pig herd numbers increased from 286,000 in 2000-01 to 361,000 in 2001-02, before decreasing to 266,000 in 2004-05. While the slaughtering of pigs generally rose over the period, it did fluctuate from a low of 591,427 in 2001-02 to a high of 674,419 in 2003-04.
Livestock products such as wool, milk and eggs increased marginally (up $1 million or 0.2%) over the last five years in Western Australia. Wool was by far the largest contributor to growth over this period, not surprising given it accounts for 78.4% of total livestock product output and 9.5% of total agriculture production in the state (based on 2004-05 figures).
The volume of taxable wool received by brokers and dealers in Western Australia increased from 115,600 tonnes to 118,802 tonnes between 2000-01 and 2005-06. However, wool receivals were down in each of the intervening years. Wool receivals dropped to 103,000 in 2001-02, then increased in 2002-03 and 2003-04 to 108,700 tonnes and 109,853 tonnes respectively, before decreasing again in 2004-05 to 107,054 tonnes.
The gross value of wool production increased marginally between 2000-01 and 2004-05 from $488 million to $490 million. However, there were some large increases in the value of wool production within the period, rising to $514 million in 2001-02, reaching a high of $691 million in 2002-03 and $558 million in 2003-04, despite declining wool production in these years.
VALUE OF LIVESTOCK PRODUCTS, Western Australia
% of total livestock products
|Liquid whole milk |
|Total livestock products |
|Value of Agricultural Commodities Produced, Australia, cat. no. 7503.0. |
WHERE DOES THE MAJOR PRODUCE GO?
Over half (54.8%) of Western Australia's agriculture production is exported overseas, based on 2004-05 figures. The main agriculture exports for Western Australia include wheat, wool and live sheep. Most of this produce travels to countries in Asia and the Middle East.
Wheat is Western Australia's major agriculture export, accounting for 7.3% of total state exports and around 62.0% of total agriculture exports in 2004-05. Since 2000-01, exports of wheat from Western Australia have increased by 15.5% ($212 million) to $1,583 million in 2005-06. In 2005-06, 98.1% of wheat export values where confidentialised and classified as having 'No country details'. However, when looking at the volume of wheat exports, the major countries receiving Western Australia's wheat in 2005-06 were: Indonesia, Egypt, Republic of Korea, Japan, Iraq, Yemen, Iran, Malaysia, Viet Nam, Kuwait, China, Sudan, Singapore, United Arab Emirates and Myanmar.
Mauritius, Singapore and Malaysia were the major export countries for Western Australia's potatoes in 2005-06, with exports valued at $2.1 million, $1.9 million and $1.7 million for each of these countries respectively. Between 2000-01 and 2005-06, exports of potatoes increased by 31.4% to Mauritius, 1.1% to Singapore and 188.1% to Malaysia.
Western Australia's largest export destination for oats in 2005-06 was India, with exports totalling $1.4 million - an increase of $1.3 million from 2000-01. This was followed by the Philippines who imported oats to the value of $1.1 million in 2005-06, an increase of $0.6 million (110.9%), while the Republic of Korea imported $0.8 million of Western Australia's oats in 2005-06, a rise of $0.3 million (48.8%) from 2000-01.
Western Australia's exports of apples were lower in 2005-06 compared to 2000-01 (down 77.1% or $11 million), partly due to a decline of 61.9% ($4 million) in apple exports to the United Kingdom over this period - the state's largest export market for apples.
Middle eastern countries were the major export markets for Western Australia's live sheep in 2005-06, with Saudi Arabia, Kuwait and Jordan importing live sheep totalling $84 million, $54 million and $37 million respectively. Exports of live sheep to Saudi Arabia increased by $34 million (69.0%) between 2000-01 and 2005-06, while to Kuwait they increased by $15 million (39.4%) and to Jordan by $22 million (136.5%).
China was the major export country for Western Australia's wool, importing $307 million of wool in 2005-06. Wool exports to China increased by $94 million (44.0%) between 2000-01 and 2005-06. India, the second largest export destination for wool, imported wool to the value of $59 million in 2005-06, an increase of $14 million (31.4%) since 2000-01.
VALUE OF AGRICULTURE EXPORTS, By selected commodity and country - Western Australia - 2005-06
Value of exports
|Commodity and country |
|No country details |
|Total wheat |
|Total potatoes |
|Republic of Korea |
|Total oats |
|United Kingdom |
|Total apples |
LIVESTOCK FOR MEAT
|Live sheep |
|Saudi Arabia |
|Total live sheep |
|Total wool |
|- nil or rounded to zero (including null cells) |
|ABS data available on request, International Trade in Goods and Services, Australia, cat. no. 5368.0. |
|Totals include items not listed in the table. |