Aussie Govt Climate Report: Bad News, Farm Productivity is UP by 68%

Guest essay by Eric Worrall

You need to read down to the fifth paragraph to learn what the government are actually reporting is good news, farm productivity is up.

ABARES says changing climate is costing every farm, on average, $30,000 every year

ABC Rural / 

By national rural reporter Kath Sullivan

Australian farms have lost on average almost $30,000 each a year in profits over the past 20 years due to climate change, relative to earnings in the latter part of last century, says the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

Key points:

  • Farmers have been losing, on average, $29,200 per farm, every year due to changing climate conditions
  • ABARES’ latest report says growers are adapting to weather, growing more from less
  • It predicts the average farm size could increase as farmers meet the challenges of climate change

In its latest report, ABARES finds that the decline in rainfall from 2001 to 2021, compared to 1950-2000, saw farm profits reduced, on average, by 23 per cent, or $29,200, as the risk doubled of farmers receiving very low returns due to climate variability.

But it also found that Australian farm productivity had significantly increased, with broadacre farmers producing almost 30 per cent more than they did in 1989.

ABARES’ executive director Jared Greenville said the research had shown that, over the same period, despite the weather challenges, grain growers had increased productivity by 68 per cent.

“New technologies and practices mean that farmers are able to grow crops under lower rainfall conditions than they could in the past,” Dr Greenville said.

Read more: https://www.abc.net.au/news/rural/2021-07-29/abares-climate-change-costs-30k-per-farm-/100331680

Even if you assume the decline in rainfall was due to climate change, the fossil fuel powered technological improvements are obviously more than compensating for the rainfall deficit.

ABARES themselves admit there is a lot of uncertainty about long term climate trends.

Climate change impacts and adaptation on Australian farms

Authors: Neal Hughes and Peter Gooday

Introduction

In recent decades, Australia has seen a shift towards higher temperatures and lower winter rainfall, which has had significant effects on many farmers. Despite these trends there remains much uncertainty over the long-run effects of climate change on farm businesses. This article presents ABARES latest modelling, examining the effects of recent and possible future changes in climate on the profitability of Australian farms. Productivity trends are also presented, showing how farm adaptation has helped to offset the effects of hotter and drier conditions to date.

Read more: https://www.agriculture.gov.au/abares/products/insights/climate-change-impacts-and-adaptation

In my opinion, the Aussie ABC attempt to frame this as a call to climate action is absurd.

The only solid evidence is that fossil fuel powered technology is supporting rising farm profits productivity. Rainfall has dropped over the last 20 years, but that could be natural variation – Australia’s paleo-climate history is a patchwork of natural mega droughts and random long term climate shifts.

What we need to do to ensure continued improvement in farm productivity and profitability is support and protect the technology which is making rising productivity possible. We need to ensure farmers have access to affordable fossil fuel, and make sure interfering climate obsessed bureaucrats are forced to give farmers the space to do what they do best – farm the land.

Of course some more water infrastructure projects might also help, to help maintain productivity during droughts, instead of frittering ever increasing amounts of taxpayer’s money on useless renewables.

Correction (EW): The original version of this story said “profits” are up rather than productivity, apologies for the senior moment.

Update (EW): The following is an ABERES comparison of farm costs, 2013-14 -> 2017-18. Some costs have risen sharply. The full document is well worth reading if you want to delve into Australian farming conditions.

Aussie Farm Costs
Figure 9 Farm costs as share of total, ABARES farm survey and ABS, 2013–14 to 2017–18. Source Australian Department of Agriculture Farmers Terms of Trade 2020
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Scissor
July 29, 2021 6:02 pm

I hear that in the U.S., programs to pay farmers to leave land fallow are being expanded.

Chaswarnertoo
Reply to  Scissor
July 30, 2021 4:00 am

Blackrock buying up farm land.

Tom Abbott
Reply to  Chaswarnertoo
July 30, 2021 6:45 am

The Chicoms, too.

July 29, 2021 6:05 pm

It looks like another case of models, all the way down.

another ian
Reply to  Tom Halla
July 30, 2021 1:12 am

Might be based on this one?

“REDBACK.

Undiscovered Riches: The economists at the Canberra-based Australian Bureau of Agricultural and Resource Economics (ABARE) have been tucking into some funny mushrooms judging by item 1003 on their 1994-95 research program. Project 1003 aims to “Develop a method of assessing the value of undiscovered mineral resources in a broadly defined mineral province as a basis of quantitative resource assessment”.

Listen fellas, how can you assess the value of something that is “undiscovered”? Redback is eagerly awaiting an explanation from ABARE’s executive director, Brian Fisher.

Australian Farm Journal November 1994.”

Chris Hanley
July 29, 2021 6:28 pm

“… the decline in rainfall from 2001 to 2021, compared to 1950-2000, saw farm profits reduced, on average, by 23 per cent, or $29,200, as the risk doubled of farmers receiving very low returns due to climate variability …”.
Cherry-picking on stilts, even if true the overall rainfall over Australia has increased since 1900 the longest period of available data, that’s climate.
http://www.bom.gov.au/web01/ncc/www/cli_chg/trendmap/rain/0112/aus/1900/latest.gif

Chris Hanley
Reply to  Chris Hanley
July 29, 2021 6:42 pm

Even worse, they are relying on one anomalous year 2019.

WXcycles
Reply to  Chris Hanley
July 29, 2021 7:37 pm

Despite the supposed abundance meat prices have risen sharply because of national herd died-back during the dry, while remaining stocks continued to supply meat, so now national grazing stocks are low and recovery is slow, so such supposed abundance is not apparent and food inflation is a thing again.

Another drive-by glib statistic.

ozspeaksup
Reply to  WXcycles
July 30, 2021 3:44 am

sure they thinned herds
many got sold elsewhere
many agisted
the supply is low cos theyre building herds again

ozspeaksup
Reply to  Chris Hanley
July 30, 2021 3:42 am

following HUGE rains in 16/17 and bumper crops.
last yr my area of the state of Vic sent huge volumes of feed to the drought/fire areas and are still doing it now for the flooded property owners in nsw and elsewhere.
and we had low to avg rains

Greg
Reply to  StuM
July 30, 2021 9:25 am

404

John Hultquist
July 29, 2021 6:47 pm

farm profits reduced, on average, by 23 per cent, or $29,200 “

Those seem to be virtual or mythical $$, somewhat like Unicorn farts.

dk_
Reply to  Eric Worrall
July 29, 2021 7:44 pm

Eric, does this mean that increases in cost of irrigation, labor, and fuel have offset or outpaced the increase in production?

dk_
Reply to  Eric Worrall
July 29, 2021 11:00 pm

Thanks for the addition. I agree with you re: fuel costs, as it is also rolled into the labor costs. Not shown are the immense investment cost increases for farm equipment that have occurred worldwide since 1989, and it is possible that basic transportation equipment costs are also rolled into the labor cost.
I was surprised that the cost of fodder was ranked so high — it may show an decrease in grazing in proportion to harvested/processed feed. Strange to me, although it shouldn’t have been, was how animal food costs have gone so far up while people food prices must be quite low.

ozspeaksup
Reply to  dk_
July 30, 2021 3:47 am

fodder went UP due to drought and inability TO graze animals
you can buy a large square bale of good hay in Vic for 60 to 80 a bale now down from 135 or so peak summer last yr

dk_
Reply to  ozspeaksup
July 30, 2021 4:46 pm

Makes sense put that way. My late father-in-law experienced the same thing in Texas. Would that same principle apply in Oz, more generally, since 1989?

Ben Vorlich
Reply to  Eric Worrall
July 30, 2021 12:59 am

Looking at the chart for costs in looks like water was not a cost previously. Are Australian farmers now being charged for water use?

ozspeaksup
Reply to  Eric Worrall
July 30, 2021 3:45 am

yeah selling water rights to china was ??how smart?? as is letting investment companies own n cotrl sales prices etc
then for total screwup? throw in greens and aboriginals wanting control of water as well

dk_
July 29, 2021 6:57 pm

… it also found that Australian farm productivity had significantly increased, with broadacre farmers producing almost 30 per cent more than they did in 1989.

ABARES’ executive director Jared Greenville said the research had shown that, over the same period, despite the weather challenges, grain growers had increased productivity by 68 per cent.

Some points:

  1. 32% is more than 30%
  2. Is it the claim here that productivity is the same as profit? What I see is a reduction of price at the mill.
  3. How were the closed/sold farms accounted for? Was there an increase or decrease in acreage per farmer or farm?
  4. How were subsidies and/or price suports tracked during the same time frame?
  5. How have farm tariffs changed?

It is obviously not climate change or drought causing the change in productivity, but it may be government or foreign trade interference causing the reduction in profit.

Last edited 5 months ago by dk_
dk_
Reply to  dk_
July 29, 2021 9:34 pm

Typo and misreading. I should have said that 68% is more than 30%. I somehow had the second statement backwards, but it appears that the two quotes are about different types of farming, or that a journalist has somehow reversed the statistic in the first quoted statement. The conclustion remains the same — that productivity up by more than two thirds, but profits down by an unknown percentage calculated at $30k (Aus?) cannot be attributed to climate change or drought, but to an economic effect left undescribed in the article. Maybe increased supply?
Perhaps we should note that 1989, the beginning of the sample period, saw the beginning of the end of Western price supports for wheat, at least partly due to the end of the cold war.

Last edited 5 months ago by dk_
PeterW
Reply to  dk_
July 30, 2021 2:31 am

dk….
There are no subsidies or tariffs applying to the major products – wheat, beef, mutton and wool.

Red-tape and the costs of complying with regulations are increasing.

ozspeaksup
Reply to  PeterW
July 30, 2021 3:50 am

yeah bloody rfid tags now being pushed for sheep
bad enough before for cattle costs per tag
smart farmers only put the tags IN ears before sale as they get lost
so “clever” theynow charge to run em into sales yards per animal for the “work to record” yet for decades a paper trail of what where etc was plenty to trace and cos nothing extra

dk_
Reply to  ozspeaksup
July 30, 2021 4:48 pm

Thanks for the information.

Old Retired Guy
July 29, 2021 7:07 pm

First impressions are that crop scientists and farmers are much smarter than climate scientists, politicians and MSM.

Rory Forbes
July 29, 2021 7:28 pm

Oh … THE HORROR, THE HUMANITY!

Gary Pearse
July 29, 2021 7:32 pm

“““New technologies and practices mean that farmers are able to grow crops under lower rainfall conditions than they could in the past,” Dr Greenville said.practices mean that farmers are able to grow crops under lower rainfall conditions than they could in the past,” Dr Greenville said.”

Every climate scientist knows but can’t say that elevated CO2 in the atmosphere from burning fossil fuels is the “New technologies” that has improved productivity in droughts.

another ian
Reply to  Gary Pearse
July 30, 2021 1:18 am

IIRC “moisture seeking” tillage equipment has helped a lot

July 29, 2021 7:41 pm

Good news? Just more food for human pests! For the sake of human rights, we need to get rid of mankind to finally have unflawed socialism.

H.R.
Reply to  E. Schaffer
July 29, 2021 9:26 pm

Yeah, that’s the ticket, E. Schaffer. Get rid of everybody and we’ll have the perfect society. Yeah…

…Hold on a minute. I can’t quite put my finger on it, but something doesn’t add up.
😉

Zig Zag Wanderer
July 29, 2021 8:01 pm

Water is a big issue in Australia, and always has been. Now, ‘water rights’ are up for sale, presumably by the government. When you try to buy any however, as a friend of mine has been trying to do, you can’t. It appears that the government, once again, is in cahoots with big corporations in order to fleece everybody. This is more and more common in Australia.

Unfortunately, our right wing governments are in collusion with corporations to fleece us, and the left wing governments are in cahoots with the unions to fleece us. A sad situation for such a wonderful country.

July 29, 2021 8:06 pm

The computer models say that Climate Change is costing every farm, on average, $30,000 every year. Actual research shows that, over the same period, despite the weather challenges, grain growers had increased productivity by 68 per cent. Rainfall has dropped over the last 20 years, but thanks to an increase in available CO2, the crops need less rain and grow faster still. It is more than likely that government interference or trade disruption is causing the reduction in profit.
Somehow the ABC manages to twist this good news story into a Climate Change Disaster Warning Piece.

aussiecol
July 29, 2021 8:11 pm

 ”…the fossil fuel powered technological improvements are obviously more than compensating for the rainfall deficit.”

Exactly, and until there is a viable alternative to a 150hp tractor and all the other necessary equipment powered by fossil fuels, it will stay that way.

griff
July 30, 2021 1:29 am

Grain then is the only agricultural product of Australia?

Or so long as grain is up, it doesn’t matter if climate is impacting the rest?

Or think where those grain farmers would be without the climate impact…

Ed Zuiderwijk
Reply to  griff
July 30, 2021 2:00 am

Three straw men in a row. You outdo yourself.

Chaswarnertoo
Reply to  griff
July 30, 2021 3:58 am

Hi griff, wron* as usual.

aussiecol
Reply to  griff
July 30, 2021 4:40 am

Record beef prices, record fat lamb and mutton prices, wool price continues to climb, Agricultural land going though a price boom…Life’s pretty good on the the land here at the moment thanks griff.

Rich Davis
Reply to  griff
July 30, 2021 5:00 am

Still waiting for your selection griffo…

In light of all the recent horrors, in which time period would you prefer to live your life?
[__] Benign low CO2 1675-1750
[__] “Dangerous” CO2 1950-2025

By the way, on the whole giant blue marble, you can’t find even one bit of unusual weather to hype today? What’s up with that?

Roger
Reply to  griff
July 31, 2021 11:07 am

It appears more CO2 can offset less rain. Interesting.

John Barrett
July 30, 2021 2:01 am

Of course. Their ABC never says anything good about the climate and the great barrier Reef.

PeterW
July 30, 2021 2:28 am

As has been noted, the long term rainfall trend for Australia as a whole, and Eastern Australia where I am, is flat as a biscuit. My grandfather bought this property in 1920… it was drier then. The water-table was lower and the local creek, less reliable.

As people and industries do, we have adapted. Better equipment, better technology, more inputs. Grain growing has always been a gamble. The more inputs, the bigger the gamble, but the bigger the win in a good year. This one is shaping up well, but too much rain can make fertilising crops and harvesting them difficult, (more) expensive and sometimes impossible.

we’ll see, and there’s always next year.

Roger
Reply to  PeterW
July 31, 2021 11:15 am

The eternal song of the agrarian: next year will be better.

Tom Kennedy
July 30, 2021 3:49 am

Climate change is causing droughts in Australia?

In recent decades, Australia has seen a shift towards higher temperatures and lower winter rainfall, which has had significant effects on many farmers. 

However today ABC reports wetter than normal winter and flooding;

https://www.abc.net.au/news/rural/2021-07-30/hume-dam-flood-fears/100336868

Even Australian coal mines are closing due to wetter than norma; conditions:

https://www.abc.net.au/news/rural/2021-07-30/coal-suspension-griffin-coal-force-majeure/100327788

Duh! Maybe it’s the weather not “climate change”.

Chaswarnertoo
July 30, 2021 3:58 am

Damn that extra food production!

Shoki Kaneda
July 30, 2021 6:25 am

Only in the twisted minds of ideologues would great news be bad.

Greg
July 30, 2021 9:22 am

“New technologies and practices mean that farmers are able to grow crops under lower rainfall conditions than they could in the past,” Dr Greenville said.

They do not take any account of the fact that plants require LESS water in a CO2 enriched atmosphere. More CO2 means stomata do not open as much and the plant loses less water vapour for the same quantity of CO2 absorption.

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