Media Release

Less favourable weather conditions in South Australia have contributed to a significant fall in statewide crop production in 2017-18, according to the latest BankSA Rural Price Index.

Total winter crop production has dropped 38 per cent this season, with the weaker result also magnified due to the preceding 2016-17 season being a record high year when agriculture accounted for two thirds of the state’s economy growth.

BankSA Regional Executive Manager Peter Panas says the latest result must be taken in context.

“It’s certainly been a more challenging year for South Australian farmers, but we need to remember that the 38 per cent fall in crop production follows a record season for local agriculture,” he said.

“It’s also a better result than the 43 per cent fall predicted by ABARES late last year on the back of the extremely high yields of the year before, and is also in line with crop production decreases nationally.”

Production of the state’s four major crops – wheat, barley, canola and oats – all fell substantially in 2017-18 as a result of poorer weather conditions, while output was also lower across the state’s smaller winter crops such as peas, lentils and lupins.

Of the major crops, barley was the worst affected with strong winds and hail damage in late 2017 contributing to a 40 per cent decline in production.

South Australia’s wheat crop also fell significantly in line with the national wheat crop, which was the smallest in around a decade, however the state’s wheat output still reached 4.1 million tonnes in 2017-18.

The index also shows that the livestock and livestock products commodity group remains the biggest contributor to South Australia’s farm incomes, despite lower beef and veal prices in 2017-18 due to strong competition from Japan and the US.

Meanwhile, South Australia’s horticulture sector has continued its recovery since late 2016 when spring storms and flooding battered the state, with the subsequent price volatility of crops such as onions and tomatoes moderating in recent times.

There are also more promising signs for wine grapes, which remain the state’s largest horticulture crop. The outlook for grape production is positive, and Australian wines continue to carry a premium in export markets.

As usual, the Australian dollar continues to influence farmers’ fortunes, with a stronger Australian dollar – which has risen from 72 US cents in late 2016 to current levels around 80 US cents – adding to a more challenging business climate of late.

“Despite the fall in crop production in 2017-18, South Australia’s farmers are still in pretty good shape overall,” said Mr Panas.

“Having said that, the business backdrop has weakened slightly, with the higher Australian dollar in particular meaning exports have become less competitive on global markets.”

The BankSA Rural Price Index has been tracking farm prices for South Australian farmers since 2000 and is a measure of prices received for grains, livestock and horticulture. It aggregates price movements across 17 products, which make up more than 80 per cent of the state’s farm output, and informs South Australian farmers and farm industries how local farm product prices are faring.