The latest ABARES Agricultural Commodities Report is indicating a slight downturn in farm incomes in the coming year.
Australian farm incomes are forecast to take a significant hit in 2026-27, with the value of agricultural production expected to ease five per cent to $98.3 billion, according to the latest ABARES Agricultural Commodities Report.
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ABARES acting executive director David Galeano said while rising input costs were a concern, seasonal conditions would be the bigger driver of grower decision making this year.
“While fuel and fertiliser costs will weigh on farm returns, the greater factor shaping grower decisions will be a drier seasonal outlook,” Mr Galeano said.
“Despite some promising recent rain in many areas, much of southern Australia is forecast to experience below average July to September rainfall in 2026.”
Export earnings are projected to fall nine per cent to $74.8 billion, driven by lower volumes across crops and livestock.
ABARES acting executive director David Galeano.
For Goulburn Valley producers, the report points to a mixed picture.
Winter crop production nationally is forecast to fall 21 per cent, with NSW and Queensland worst affected by dry conditions.
Victoria and South Australia, both buoyed by strong late-summer and autumn rainfall, are expected to see a yield recovery after two dry years.
Average broad acre farm business profit is forecast to fall 70 per cent nationally, from $216,000 to $65,000, with Victorian farms expected to average just $14,000 profit in 2026-27.
Cropping farms remain the most profitable enterprise type.
Livestock producers face falling cattle and lamb prices as turn-off remains elevated, while milk and wool prices are tipped to rise, offering some relief to Goulburn Valley dairy farmers amid a forecast two per cent national fall in milk production.
Mr Galeano struck a note of optimism for those who have caught recent rain.
“Despite the headwinds facing the sector, farmers who have received favourable rainfall are making the most of the opportunities.”
The full ABARES June 2026 quarter Agricultural Commodities Report is available on the ABARES website.
