CANBERRA, AUSTRALIA — During its Outlook 2011 conference on March 1, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) discussed its assessment of the A$2.3 billion impact of recent floods on agricultural production and exports and provided an outlook for Australia’s commodities over the short- to medium-term.

The event was organized by ABARES and is being held this year at the National Convention Centre, Canberra, Australia, March 1-2.

ABARES’ Chief Commodity Analyst Dr. Jammie Penm examined how the recent, extraordinary weather affected production.

“While individual farmers have suffered as a result of the floods, overall the national outlook for agricultural production and exports looks positive,” Penm said. “Loss of agricultural production and exports due to the recent adverse climatic conditions is estimated to have been A$2.3 billion in 2010-11, with significant impacts on production of cereals, sugar, fruit and vegetables, cotton and grain sorghum. Excessive rainfall in late November and through mid-December caused considerable disruption to the winter grain harvest and a significant downgrading of crop quality.

“Continued rainfall and flooding in late December and through January caused further significant damage to agriculture in most of the eastern states, as well as in the Gascoyne region of Western Australia.”

ABARES’ Executive Director Phillip Glyde said the outlook was generally positive for commodity production and exports.

“Despite the recent adverse weather impacts, the value of farm exports is forecast to rise by around 9% to A$31.2 billion in 2010-11, before increasing by a further 4.4% to A$32.5 billion in 2011-12,” Glyde said.

Glyde emphasized the importance of lifting agricultural productivity to counter any adverse impacts that may arise in the future, from climate variability, pest and disease pressures, market fluctuations and economic downturns.

“In terms of productivity, ABARES research indicates that domestic public-sector R&D and associated extension activities account for around one-third of the broadacre productivity gains achieved over the past 50 years,” Glyde said. “Now is the time to increase our research capacity and not to reduce it.”

Glyde spoke at the economic overview session on March 1, which also featured the National Australia Bank’s chief economist Alan Oster and JP Morgan Japan’s Jesper Koll.

“The world financial outlook is looking better and once the Australian economy gets through its current flat patch, growth and the labor market will come back strongly,” Oster said.

“China and India are the new engines of global growth and Australia's exports. The good news for Australia is that both countries show no signs of slowing down, while the bad news is that inflation poses complex challenges for both Indian and Chinese policy makers,” Koll said.

ABARES also said March 1 that commodity exports will exceed A$250 billion in 2011-12.

ABARES’ Deputy Executive Director Paul Morris said earnings from Australia’s commodity exports are forecast to rise by 14% to a record of A$251 billion in 2011-12, following a forecast strong increase of 29% to A$221 billion in 2010-11.

“Over the medium term, commodity export earnings are projected to be maintained around this value in real terms, reaching around A$255 billion in today’s dollars by 2015-16,” Morris said.

For farm products, the value of exports is forecast to rise by 4.4% to A$32.5 billion in 2011-12, following an expected increase of around 9% to A$31.2 billion in 2010-11.

Despite the adverse impact of recent excessive rainfall and floods, the forecast value of farm exports in 2010-11 represents an upward revision of around A$1 billion from the forecast released by ABARES in December, mainly reflecting the effect of recent significant increases in agricultural prices on world markets.

World prices for grains and oilseeds have increased substantially because of shortfalls in production in some of the major exporting countries. Producers in many producing countries are expected to respond to current high prices by increasing production next season.