The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has estimated that the recent flooding in eastern Australia is likely to have reduced 2010–11 agricultural production by at least $500–600 million and reduced coal exports by $2–2.5 billion.
ABARES Deputy Executive Director Paul Morris said the bureau’s Special Report on the Impact of Recent Flood Events on Commodities is an initial assessment of the effect on Australian commodity production of the recent floods in the eastern states.
“While it is still too early to determine the full impact of the floods, this assessment is based on information sourced from major grain handlers, marketing organisations, agricultural and mining companies, state departments, transport authorities, the Bureau of Meteorology and satellite imaging,” Mr Morris said.
“As observed in major natural disasters, significant damage to property and infrastructure has occurred, which has resulted in disruption to economic activity in the flood–affected regions. The value of this lost infrastructure is likely to be much greater than the estimated production impact, but has not been estimated in this report.
“While the focus of this assessment has been on the aggregate effect on a state or national basis, there will be significant financial hardship for individuals and businesses who have experienced substantial crop or livestock losses and damage to their property.”
The report notes significant impacts on production of fruit and vegetables, cotton, grain sorghum and some winter crops. Losses of livestock reported to date have been small in relation to the size of the national herd and flock, with the main impact associated with disruptions to transport and other infrastructure support. Fruit and vegetable prices have risen significantly for some products, such as watermelons, sweet potatoes, broccoli and zucchinis, but the impact on other fruits and vegetables appears limited to date.
It is estimated that Queensland’s coal exports could be around 15 million tonnes lower than previously anticipated between December 2010 and March 2011, representing a reduction in export earnings of around $2–2.5 billion. However, it is anticipated that coal prices could be settled at higher levels, partially offsetting the adverse impact on coal industry revenues.
ABARES will provide further updates of the impact of the floods on summer and winter crops in its Australian crop report to be released on 15 February and across all commodities in Australian commodities to be released at the ABARES Outlook conference on 1 March.