According to the Australian Bureau of Agricultural and Resource Economics and Sciences Agricultural Commodities Report, Australian wine grape production is forecast to increase by 21 per cent to 1.6 million tonnes in 2023-24, however prices are forecast to fall by 9 per cent to reach an average of $590 per tonne in the same period.
After widespread heavy rainfall and waterlogging in 2022-23, predominantly drier weather through the 2023-24 growing season had helped reduce the risk of mildew, ABARES said.
This has provided a better opportunity for growers to actively manage the issue through improved access to vineyards for spraying.
Despite heavy rains in some regions around harvest, the quantity and quality of grapes harvested is expected to be good.
In 2024-25, wine grape production is forecast to increase marginally on the back of forecast good growing conditions, high water availability and easing disease pressure.
“However, the higher production potential will likely be constrained as growers leave grapes on vines, or engage in heavy pruning to put their vines in “survival mode” due to continuing low prices with the ongoing excess supply of red wine varietals in warm inland regions and sluggish domestic and international demand for wines,” the report said.
“With low prices and a sluggish export market, a portion of wine grape growers are expected to leave the industry or switch to other more profitable industries, such as almonds.
“This is projected to be particularly prevalent in the assumed drier years of 2026-27 and 2027-28, where previous successive years of lower rainfall have seen water prices rise.”
The nominal gross value of wine grape production is forecast to increase by 11 per cent in 2023-24 to reach $947 million.
In 2024-25, the nominal gross value of wine grape production is forecast to fall by 2 per cent to $926 million.
Lower prices for wine grapes, especially for red varieties, is forecast to more than offset a marginal increase in production.
Leading up to 2028-29, the real gross value of wine grape production is projected to fall, reaching a low of $823 million in 2027-28, as prices for red grapes remain below long-term averages.
Nuts and almonds to increase
IN 2023-24 and 2024-25, world supply of macadamia nuts is expected to increase, driven by the transition of plantation area from non-bearing to bearing.
High macadamia prices before 2022-23 led to significant plantation expansion, particularly in China, South Africa and Australia.
In 2023-24, world supply of almonds is expected to increase.
High world supply is being driven by a record harvest in the United States in 2020-21, which has resulted in high carryover of stock into future years.
Logistical issues have eased since 2020, allowing producers to increase supply and reduce inventory.
World supply is expected to stabilise in 2024-25, as most of this inventory will be cleared.
Over the outlook to 2028-29, world supply of macadamias and almonds is projected to increase, incentivised by expectations of demand growth.
Higher supply will be supported primarily by increasing yields of plantings in recent years.
Wheat value stays high
THE nominal value of wheat production is forecast to fall by 39 per cent to $10.1 billion in 2023-24.
While a significant fall from the 2022-23 record of $16.8 billion, it would still be the third-highest value on record if achieved.
The expected fall in value is driven by lower Australian wheat production and easing global grain prices.
In 2024-25, the nominal value of wheat production is forecast to increase by 2 per cent to $10.4 billion.
A forecast increase in production is expected to more than offset lower prices.
Wheat production is forecast to increase to above-average levels reflecting expected improved seasonal conditions.
World prices are expected to ease because of improved production conditions in some major exporting countries and a recovery in global grain stocks.
Until 2028-29, the real value of wheat production is forecast to range from $9.1 billion to $11.6 billion, depending heavily on domestic seasonal conditions and international prices.
Production values are expected to be lower over the outlook than recent record years, but remain high in historical terms.
In the alternative scenario, world grain markets are assumed to be more volatile given projected slower global economic growth, higher inflation and trade disruptions.
If increased volatility and wetter seasonal conditions are realised, production values are expected to be higher than in the baseline scenario, ranging between $10.2 billion and $14.5 billion.
The nominal value of wheat production forecast for 2023-24 has been revised up by $137 million since the December 2023 Agricultural Commodities Report.
