Australia's climate is highly variable, with lower mean rainfall and higher rainfall variability than most other nations. As a result, Australian agriculture is subject to more revenue volatility than almost any other country in the world.
While Australian farmers are well accustomed to climate variability, the emergence of climate change is presenting some new challenges. Climate models predict large changes in future rainfall including lower rainfall in southern Australia and more severe droughts and floods. Over the last 20 years large changes in Australian climate have been observed, including reductions in average winter rainfall in southern Australia and general increases in temperature.
ABARES climate and drought research focuses on understanding and measuring the effect of climate variability and change on agricultural industries.
ABARES also produces its Weekly climate, water and agricultural update, which summarizes recent climatic conditions, notable weather events and their impact on agriculture, water storage levels, irrigation allocations, and commodity prices.
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Climate research
Climate change impacts and adaptation on Australian farms
This report details the potential adaptation pressure facing Australian farmers at a regional scale. The ABARES farmpredict model is combined with downscaled projections (drawn from the CSIRO) for temperature and rainfall by 2050 to examine the effects of recent and future projected 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.
Published: 29 July 2021
Simulating the effects of climate change on the profitability of Australian farms
In this working paper, a statistical model of Australian cropping and livestock farms is applied to simulate the potential effects of climate change on farm profits. This farm model is combined with a range of downscaled projections for temperature and rainfall by 2050.
Published: 29 July 2021
Agricultural Data Integration Project Report
The Agricultural Data Integration Project (AgDIP) is a long-term collaboration between ABARES and the Australian Bureau of Statistics (ABS) to develop, integrate and analyse new large-scale farm level agricultural data sets.
The AgDIP establishes a new national database of Australian farms, including information on agricultural production, business financial outcomes, weather conditions and commodity prices over the period 2000-01 to 2017-18.
This includes the construction of the Farm-level Longitudinal Agricultural Dataset (FLAD), the integration of FLAD with the ABS Business Longitudinal Agricultural Data Environment (BLADE) and the development of new predictive models linking farm outcomes with climate conditions.
Published: 16 December 2020
Opportunities from action on climate change: Insights
Climate change and associated policies have important implications for future competitiveness of Australia’s agricultural exports, which many agricultural industries are already addressing through ambitious emissions reduction plans. Some of Australia’s major agricultural exports are already relatively less emissions intensive than some major competitors providing scope for Australia to further its trade reputation as a reliable and sustainable producer.
This ABARES Insights report concludes that innovation and investment are key to decoupling emissions from agricultural production, and promoting evidence-based trade rules and product certification will help achieve industry goals of emissions reduction and revenue growth.
Published: 10 December 2020
New insights on the effects of drought and climate variability on Australian farms
The current drought across much of eastern Australia has demonstrated the dramatic effects that climate variability can have on farm businesses and households. The drought has also renewed longstanding discussions around the emerging effects of climate change on agriculture, and how governments can best help manage climate risk.
This Insights article provides some insight into these issues by examining the effects of recent climate variability on Australian farms.
Published: 18 December 2019.
Farm performance and climate: climate adjusted productivity on cropping farms
The Farm performance and climate report examines the effect of climate variability and climate change on the productivity of Australian broadacre cropping farms between 1977–78 and 2014–15.
The study combines ABARES farm survey data with climate data to estimate the effect of climate variables (such as, rainfall and temperature) on both cropping farm Total Factor Productivity (TFP) and wheat yields.
It also presents climate-adjusted productivity estimates with the effects of climate removed.
Published: 9 May 2017.
Farm risk management in a changing climate
This paper examines the risks of climate variability and climate change to agricultural production, and discusses, in particular, risk management as the most effective tool for agricultural producers to manage these risks.
Two risk management options, decision support systems and insurance and other financial products, are reviewed for their efficacy in managing current risks of climate variability and their potential role in managing future risks of climate change.
Published: 7 March 2012.
Options for insuring Australian Agriculture
This paper does not analyse the full range of risk management options available to farmers. Instead it focuses on the potential role of insurance and related products in risk management.
This paper surveys the literature on agricultural insurance, and makes conclusions in the context of current policy in Australia. The literature review is supplemented by ABARES estimates of insurance premiums for major crop types.
Published: September 2012.
Productivity pathways: climate adjusted production frontiers for Australian broadacre cropping farms
This study introduces two advances to the aggregate productivity index methodology typically employed by ABARES. First, it accounts for the effects of climate variability on measured productivity by matching spatial climate data to individual farms in the ABARES farm surveys database.
Second, a farm-level production frontier estimation technique is employed to facilitate the decomposition of productivity change into several key components, including technical change and technical efficiency change.
Published: 9 February 2011.
Climate risk and industry adaption
This paper presents findings from work undertaken across four drought-affected communities in the Murray-Darling Basin: two irrigated and two non-irrigated. It explores the links between people’s perceptions of climate variability, climate change and their preparedness and management of climate risks.
Published: 16 May 2008.
Climate change: impacts on Australian agriculture
In this article, the potential medium to long term economic and agricultural trade impacts of potential changes in climate on Australian and global agriculture sectors are investigated.
Published: 6 December 2007.
Climate change: issues and challenges for Australian agriculture and forestry
In this article, the potential impacts of climate change and climate change mitigation and adaptation responses in the agriculture and forestry sectors are discussed. Opportunities and challenges in incorporating these sectors in a domestic emissions trading scheme are also explored.
Published: 24 September 2007.
Drought research
Measuring drought risk
The Measuring drought risk report measures the effect of drought on the profits of farms and considers how drought risk varies across different farm types and regions. As expected, the results show that cropping farms face more drought risk than livestock farms, with regions in the more ‘marginal’ areas of the cropping zone facing the highest drought risk.
The Measuring drought risk report also presents trends in drought risk over time, reflecting the effects of new farm technologies and other structural changes. The results indicate that drought risk has increased slightly since 1989, due partly to a shift towards cropping activity (and away from sheep), particularly in southern Australia.
Published: 11 November 2020.
Defining drought from the perspective of Australian farmers
The Defining drought from the perspective of Australian farmers report presents a new drought indicator as an alternative to traditional rainfall measures.
The new indicator is found to more accurately reflect the effects of drought on farm profits than simple rainfall measures, accounting for the unique circumstances of each farm and the effects of movements in domestic commodity prices (i.e. high grain and hay prices).
The Defining drought risk report also presents data on farmer self-assessments of drought. These data show differences in farmer perception of drought once variation in climate conditions has been controlled for. This includes a tendency for farmers in New South Wales and Queensland to be more likely to self-assess as ‘in-drought’ than farmers in Western Australia. There is also a trend for current farmers to be less likely to assess as in-drought than farmers in the past.
Published: 11 November 2020.
New insights on the effects of drought and climate variability on Australian farms
The current drought across much of eastern Australia has demonstrated the dramatic effects that climate variability can have on farm businesses and households. The drought has also renewed longstanding discussions around the emerging effects of climate change on agriculture, and how governments can best help manage climate risk.
This Insights article provides some insight into these issues by examining the effects of recent climate variability on Australian farms.
Published: 18 December 2019.
Impact of drought becoming more pronounced
The effects of the continuing drought are becoming more pronounced with falling production and high input costs presenting serious challenges, according to the December 2019 Agricultural Commodities report.
Published: 10 December 2019.
Winter crop production forecast to fall below 30m tonnes
Winter crop production is forecast to fall by 3 per cent in 2019–20 to 29.4 million tonnes, down 13 per cent from the production forecast in September, according to the December 2019 Crop Report.
Published: 3 December 2019
Forecasting national grain stocks in times of drought
The ongoing drought of 2018 and 2019 has highlighted the importance of providing well-grounded and reliable public information about the amount of grain likely to be available for domestic consumption over the coming year. As drought raised domestic grain prices during 2018 and the first half of 2019, intensive livestock and food manufacturing industries began to talk to me about the prospect of importing grain to secure supply.
ABARES revised its forecasts of national barley and wheat stocks for 2019–20 as part of the quarterly Agricultural commodities report, and these forecasts were published in the June 2019 edition. This report explains how ABARES revised its grain stocks forecasts for 2019–20, and put in place a process that can be used to forecast grain consumption and stocks in future drought years.
Published: 20 November 2019.
Drought impacts on broadacre and dairy farms in South-Eastern Australia 2018
Interim results1 from ABARES annual surveys of broadacre and dairy farms confirm that average farm financial performance in South-Eastern Australia will worsen significantly in 2018-19 relative to the previous year, but not to the levels experienced during the 2002-03 and 2006-07 droughts. The impacts of the drought on farm financial performance will be variable however, largely in line with regional differences in the severity of rainfall deficiencies.
Published: 19 December 2018.
Analysis of 2018 drought
This brief is based on a presentation by ABARES’ Executive Director to the National Drought Summit in October 2018 describing the effects of the current drought on Australian agriculture. The brief summarises current livestock market conditions, the extent of rainfall deficiencies, and the effects on crop production and farm incomes. The climate information in Figures 1 and 2 was presented to the Drought Summit by the Bureau of Meteorology.
Published: 26 October 2018
For access to all ABARES past climate and drought related research visit the ABARES publications library.