According to the report, the Australian grains sector remains on track to record one of its largest production volumes ever, driven by two seasons of optimal weather conditions.
At the same time, strong global demand for Australian grain looks set to continue, driven by poor weather forecasts for some Northern Hemisphere grain producers and strong global demand both for food and animal feed.
ANZ’s head of Food, Beverage and Agribusiness Insights Michael Whitehead said one issue industry stakeholders need to contemplate is whether the industry has reached a point of “peak acreage”, meaning Australia’s current cropping area is unlikely to rise much further in future.
“Australia’s cropping acreage has varied considerably over the decades, but it has broadly been on an upward trend,” Mr Whitehead said.
“To some degree, the growth rates of Australia’s three largest agri sectors — cropping, cattle and sheep — impact each other, with the major interaction being between cropping and sheep.
“Over the past decade, Australia’s cropping acreage has plateaued to a degree not seen before, and while there was some volatility caused by drought during that period, cropping acreage would appear to have peaked in a band between 20 to 23 million hectares.
“Over the same period, Australia’s sheep numbers have also seen their steadiest period, sitting within a narrow band of 68 to 75 million head.
“Looking ahead, particularly over the next 10 years, the experience of the past decade would suggest that Australia’s main agri sectors are likely to remain at this level for the medium term and possibly longer.
“Importantly, in contrast to the plateauing of Australian crop acreage, crop production levels show little signs of slowing in their overall growth.”
The discussion paper also explored the increasing diversity of Australia’s cropping breakdown, with wheat’s acreage share dropping from about 80 per cent in the 1960s to around 50 per cent today.
While wheat, barley and canola have been the dominant crops, other varieties such as oats and sorghum may see an increase in production share.
It also forecast an increasing number of larger farms choosing to produce pulses, including chickpeas, lentils and beans.
Domestically, this would be driven by the growth of the plant-based protein market, while the export demand for these is also likely to see strong growth, particularly as COVID-19 disruptions fade.