OFFICIAL

Agriculture
in Victoria
1. Overview
2. Business conditions
3. Industry updates
4. Regional snapshots

January 2023

OFFICIAL
Section 1: Overview - Agriculture in Victoria
Agriculture in Victoria is an economic driver for regional economies
and part of the social structure of rural communities.

Victoria is Australia’s largest agri-food exporter.

Agriculture manages half the land in the state, is the major water user
and is a key stakeholder in climate change adaptation and emissions.

Gross value of agriculture production

$17.5 billion in 2020-21 (latest data)

Agriculture and food manufacturing

150,080 jobs (agriculture 67,630 directly)

21,600 farms Commercial agricultural businesses

Farmers manage half of Victorian

11.4 M ha land (50 per cent)

27 per cent Of total national food and fibre exports

2
Snapshot of agriculture in Victoria
 Victoria is Australia’s leading food exporter

In 2021-22 Victoria cemented its position as Australia’s largest food and fibre
exporter by value, accounting for 26 per cent of the national total.

▪ In 2021-22 Victoria exported $17.9 billion in food and fibre exports, up 29 per cent on the previous
year.

▪ Exports increased across nearly all industry categories, up a total of $4 billion in 2021-22.

▪ While exports benefited from recovering global demand, global supply chain issues continued to
impact our food and fibre exporters.

▪ The Victorian Government will continue to support our export sector to innovate, value-add to our
quality produce, diversify into new products and markets, and to meet and exceed our $20 billion
target for food and fibre exports by 2030.

Food and
fibre exports
2021-22 Market share of
top five markets
2021-22

4
 Diverse climate,
diverse products

Victoria has a moderate yet diverse climate

ideal for a diversity of agricultural industries.

The state records Australia’s second highest

average annual rainfall, has diverse soil types and
quality pastures for livestock.

Victoria’s compact size provides access to export

and domestic markets, including food
manufacturing.

• Grains production is concentrated in Victoria’s

northwest and has increased across the north
and southwest in the past decade.

• There are three dairy production regions,

pasture based in the southwest and west
Gippsland and irrigation in the north and east
Gippsland.

• Horticulture is concentrated around Melbourne,

along the Murray River, Gippsland and in other
areas with access to irrigation.

• Beef and sheep production are more distributed

across the state.
 Agriculture and
regional Victoria
Agriculture directly employs 67,100 people in
Victoria.

• Most of these agriculture, forestry and

fisheries jobs, 78 per cent, are in regional
Victoria.

• In some regional areas it directly accounts for

46 per cent of all employment, and indirectly
for nearly all employment.

• Agriculture also supports 76,700 jobs in food

processing, many of which are in Melbourne
or regional towns.

Agriculture and related food processing

provide the economic foundation for many
Victorian towns.

• This is especially the case in Western and

North Western Victoria.

• In other areas agriculture complements

tourism or adds to towns’ economic diversity.

Note that this map will be updated following the release of 2021 Census data.
 Section 2: Business Conditions

Floods and storm have caused major loss and disruption, especially in northern
Victoria. Gross value of Victorian agriculture
▪ Agriculture Victoria has identified significant impacts from the flooding across northern
Victoria.
2020-21 $17.54
▪ Agriculture Victoria estimates that approximately 12,230 agricultural properties have
been impacted by flooding across northern Victoria, including smaller lifestyle
properties. Of the 12,230 properties impacted, approximately 5,500 are commercial
scale primary producers
▪ Losses from wet conditions are most significant in cropping, horticulture and livestock 2019-20 $17.83
with implications for yield, quality harvest and animal welfare. The impacts of flooding
on fodder and production will extend at least throughout 2022/23.
▪ Public infrastructure damage, including roads, is a key concern for industry in
immediate and longer term.
2018-19 $15.89
▪ Victorian agriculture may yet experience above average production during 2022
(likely excepting horticulture), due to strong production outside of flooded or
waterlogged areas.*
Prior to the wet 2022 Spring, most agriculture industries had experienced strong 2017-18 $14.91
business conditions during 2021-22 and especially 2020-21
▪ Most agricultural industries and regions (except horticulture) had experienced two or
more years of strong business conditions, due to good seasonal conditions and high
commodity prices.
2016-17 $14.02
▪ The main challenges have been high input prices, labour shortages, and disruptions to
market access and to supply chains (arising from tensions with China, and from Covid-
19). These challenges remain current.
▪ Horticulture has experienced poor business conditions for several years. In addition to * Source: ABARES December Quarter Agriculture Overview
the
7 challenges above, it has not benefited from high commodity prices or good and Agriculture Victoria field intelligence
seasonal conditions since 2019-20 (being generally too cool and wet for horticulture).
Overall, business conditions and profitability have been Per cent of farmers surveyed saying “Business conditions
this year have been more challenging than usual”.*
strong in recent years for most Victorian agriculture industries
80
70

Per cent of survey

With the notable exception of horticulture 60

respondents
50
• ABARES data confirms improved average profitability for most Victorian agriculture industries in recent years. This 40
confirms that good seasonal conditions and near record commodity prices for most major commodities have more than 30 2020
offset high input prices and supply-chain disruptions. This data is not available for horticulture. 20 2021
10
• Data from the Regional Wellbeing Survey confirms that, unlike other industries, horticulture has experienced difficult 0
business conditions in recent years. This is confirmed by analysis of key drivers of profit for horticulture.

• Industries other than horticulture have had some opportunity to invest in building farm business resilience, and to
recover from challenges prior to 2021 including bushfire, drought, commodity shocks, and isolated storm impacts.
Source: Regional Wellbeing Survey.
* Calendar year. Data for beef and sheep in 2021 is the average of the two.

Average Farm Business Profit*

800,000
Average farm business profit 700,000
over time provides an indicator of
600,000

imputed operator salary)

the financial depletion or

Profit (in addition to

resilience of Victorian agriculture 500,000
industries.
400,000
300,000
* ‘Profit’ is in addition to an imputed salary
for the farm owner of between $50,000 and 200,000
$100,000 (varying year to year, but with
beef towards lower end and dairy and 100,000
grains towards the upper end of this scale).
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: ABARES Farm Data Portal -100,000
-200,000

Dairy Beef Sheep Grains

Broadacre incomes have been good, albeit lower in North Central Victoria

ABARES data on farm family incomes from broadacre farming suggest strong incomes in recent years, for all regions except North Central.

▪ The 3-year average farm income for North Central to 2020-21 was $82,100. This is below the 20 year average for the region ($88,400), which is in turn only 38 per
cent of the 20 year average for the other three regions ($213,400).

▪ The low 20 year average for this region reflects repeated periods of drought and irrigation water shortage, increased water prices arising from competition with
horticulture, and dairy price shocks and restructuring (e.g. 2016 dairy price stepdown).

▪ Data is not available by region for 2021-22, but the industry profit data (previous slide) suggests the farm incomes would likely have been somewhat improved in
areas with dairy (North Central, and ‘Southern and Eastern Victoria’), and slightly lower in areas more reliant on sheep (Mallee and Wimmera).

Average Farm Family Income (3yr average)*

Source: ABARES Farm Data Portal.
250,000
‘Farm Family Income’ is the family share of farm

Average Farm Family Income (3yr average)

cash income, less family share of depreciation,
plus all off-farm income of owner manager and 200,000
spouse.

150,000

‘Mallee’
100,000

‘Wimmera’
‘North Central’
50,000

‘Southern and Eastern Victoria’

0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

9 Mallee (ave. 135k) Wimmera (ave. 145k) North Central (ave. 88k) Southern and Eastern Victoria (ave. 126k)
Pre-floods, farm business conditions were mostly positive

Victorian farmers’ self-reporting

confirms business conditions
were generally supportive during
2020 and 2021.

Challenges most cited by farmers

in 2021 were:

• Input prices

• Transport costs

• Delays getting supplies

• Labour availability

Source: Regional Wellbeing Survey

Spring Rain and Floods

• Victoria has a winter dominant rainfall and this is the basis of our non-
irrigated agricultural production systems.

• Most parts of Victoria experienced well-above-average rainfall

throughout the Spring.

• This resulted in extensive and sustained flooding, mostly in northern

Victorian rainfall patten January to December
Victoria (especially Hume and Loddon Mallee regions).

• Several communities are still experiencing major flooding but most

have now entered into the clean-up and recovery phase.

• Standing water is expected to remain for many weeks, affecting

pasture, standing crops and animal health.

• Outside the flood zone, agriculture has been impacted by flood-related

disruptions to supply-chains, and also by broader effects from
sustained wet and cool conditions and isolated hail. These include
waterlogging, erosion, damaged crops, feed shortages, elevated
disease risks and difficulties getting onto paddocks. Spring 2022 rainfall deciles
 Broader Seasonal Outlook
An assessment of 12 global climate models in November by Agriculture Victoria suggests
a wetter summer across the state is most likely with neutral forecasts for temperatures
for the next three months. More recent forecasts show a more neutral outlook. A wetter
summer could mean:

▪ A third year of cool and wet La Nina conditions will mean continuing difficulties for Victorian
horticulture producers over the critical summer season. For fruit and nuts in particular, cool
and wet conditions can lead to poor ripening, compromised yield and quality (e.g. splitting),
elevated disease risks and increased costs (except water).

▪ Wet conditions will cause continuing problems across a broad range of industries from getting
machinery and stock onto orchards and paddocks for spraying, grazing and other summer
activities. There will also be increased pressure from pests and disease (plant and animal).

▪ Anticipated quantity and quality of Victorian grain and fodder has been downgraded due to
wet conditions, and there will be increased demand for feed from the livestock industry.
Limited supplies of quality protein hay will have the greatest impact on dairy. There will be
adequate supplies of domestic feed grain.

▪ The window of opportunity to plant summer crops is closing. Low soil temperatures, the need
to remediate flood-affected paddocks and a shorter growing season will influence potential
yields. Opportunities for maize silage (normally planted in October) have largely passed in BoM rainfall Outlook Jan-Mar 2023
northern Victoria. With the high soil moisture content, it is possible for some short season
maize, forage sorghum or millet if paddocks can dry out by December. Further information is available through the Agriculture
▪ Lower temporary water prices, a full soil moisture profile, and possibility of an extended
Victoria ‘The Fast Break’ Newsletter
pasture growing season will help balance effects of higher feed and fertiliser costs.
 Labour costs ‘Normal’ (pre-Covid) demand for casual labour in Victorian agriculture (ABARES 2019)
40,000
and availability

Demand for casual workers

35,000

30,000

25,000
Victorian agriculture is experiencing a labour shortage, especially in horticulture
and dairy production, with potential seasonal impacts for shearing and grain 20,000
harvesting. 15,000

▪ This reflects shortages across the Victorian economy, with job vacancies up 46.6 per 10,000
cent compared to March 20201. 5,000

▪ Impacts are especially acute in horticulture, which is heavily reliant on overseas workers; 0
especially backpackers and Pacific workers through the PALM scheme 2.
Victoria’s peak demand for seasonal workers occurs in January-February, during
Sunraysia’s table grape harvest.
Horticulture Broadacre and dairy
▪ In February 2021 it was estimated that, state-wide, available horticulture labour was only
70 per cent of requirement3. International arrivals and departures to Sept 2022 (ABS 2022)

▪ It appears this remained similar by February 2022, due to still heavily reduced numbers
of backpackers.
Costs of labour have increased very significantly, with some horticulture producers
reporting labour cost increases of 50 to 100 per cent.
▪ This has a major impact on profitability because, even under normal conditions, labour is
the largest production cost for most horticulture businesses.

1. ABS Labour Force Survey May 2022

2. Federal Government Pacific Australia Labour Mobility scheme
3. Agriculture Victoria ad hoc horticulture industry survey
13
Victorian agriculture sector emissions

• The Agriculture sector contributed 19.3% of Emissions by activity on-farm

emissions (16.1 Mt CO2-e) in Victoria in 2020.

• Agriculture is the fourth-largest source of emissions

in Victoria.

• Agriculture follows electricity generation, transport

and direct combustion.

• Agricultural emissions come from different on-farm

activities and processes

• Digestion processes in livestock/ruminants is the Emissions by gas

largest sub-sector of emissions in Victoria’s farms,
accounting for 69% of on-farm emissions. 4.1

• Livestock emissions reflect headcount of animals, 17.7 68.6% Enteric fermentation

which is driven by market and seasonal conditions. In 2020 (11 Mt)
agricultural CH4
• Emissions are also generated through the different activities 9.1% Manure management
inputs and activities needed to operate farms. (1.5 Mt)
contributed
• Landholders can sequester carbon through trees 19.3% of N2O 17.7% Crop residue and
fertiliser use (2.9 Mt)
and vegetation. Victoria’s
emissions CO2 4.1% Lime and urea
77.7 application (0.7 Mt)
 Other Agriculture Inputs
Australia is a high import dependent country for many agricultural inputs, including fertilisers, agrochemicals, and fuel.

Fertiliser prices (nominal $) have been the highest since 2008 and remain high in 2022-23.
Fertiliser ▪ Australia imports around 95 per cent of its urea. Urea price is strongly linked to international gas prices which are
currently high (major production cost is natural gas).

Prices– for herbicide and pesticides have increased substantially (doubled for glyphosate).
Text
Agrochemicals ▪ Reduced availability for some products may influence weed control and pasture production.

Energy prices (fuel, gas, electricity) have increased substantially over the past year.
▪ As economic recovery from COVID-19 led to a rebound in global energy demand, supply remained constrained. The
Energy war in Ukraine, and subsequent supply uncertainties and sanctions, further exacerbated the situation.
▪ Intensive agriculture (horticulture and dairy) are more exposed to high energy prices, including gas. Energy (diesel and
electricity) is a key input for most enterprises.

Freight prices for shipping exports more than doubled in 2021, coupled with higher shipping times.
▪ Since February 2022, many ports in the Black and Baltic seas have been closed, and trade route disruptions through
Freight and shipping these areas have seen significant increases in shipping times and freight prices but there are signs of improvement.
▪ Supply and shipping issues have had an impact on imports of agricultural machinery and other equipment.

Feed availability has been severely impacted from wet conditions, flooding and disease pressure.
▪ Expected quantity (and quality) of fodder and grain for the east coast has been downgraded from recent wet conditions
Grain and fodder and flooding while also seeing increased demand for feed from impacted livestock operations.
▪ An historically tight global market and logistical issues sees demand outstrip supply for grain and hay prices are
15 expected to spike.
 Biosecurity

Pressures on the national and Victorian biosecurity system are increasing, as threats
and risks to biosecurity grow in complexity and scale.
Increasing threats

▪ Foot-and-mouth disease (FMD) and lumpy skin disease (LSD) were detected in Indonesia in 2022 Single incursion of FMD would harm
▪ Continued presence of African Swine Fever (ASF) in neighbouring East Timor, Papua New Guinea trade; multi state outbreak could cost
and Indonesia
▪ Varroa destructor (Varroa) bee mite has been detected in NSW in June 2022 $80 billion
▪ Cases of Japanese Encephalitis Virus (JEV) has potential to increase in Victoria over the next month Over 10 years in lost agriculture
given NSW had a detection mid-November 2022 production and trade
▪ Australian Plague Locust (APL) numbers are reduced at present due to wet weather but there is potential
for localised population increases in 2023

Responses

Successful
Khapra Beetle found in Abalone Viral Japanese Encephalitis
eradication of Varroa mite
imported baby Ganglioneuritis virus (JEV), detected in
highly pathogenic detected in
highchairs, 2020. (AVG) detected in 16 piggeries in northern
avian influenza, NSW, June
expected to continue wild abalone in May Victoria, Feb to May 2022
following outbreak in 2022
until 2023. 2021
2020 16
The overall probability of a major emergency animal
disease in Australia in the next five years has increased

Foot-and-mouth disease
• >$80 billion economic losses over 10 years

11.6% • Estimated chance of an outbreak in

Australia has increased 1.3 times since
Difficult
to Range: 1 – 19% detection in Indonesia in May 2022
prevent
Lumpy skin disease

28%
• Significant trade and industry impacts
• Estimated chance of an outbreak in
>50%
Difficult to Australia increased 3-4 times since
detect & Range: 4 – 56% detection in Indonesia in March 2022 Combined
control
African horse sickness estimated
• Up to 95% mortality rate in horses probability
13% • Detected in Thailand in 2020 of an
Difficult to Range: 1 – 31% outbreak
minimise
impacts African swine fever
• Up to $2.03 billion in potential economic
21% losses over 5 years
• Present in Timor-Leste and Papua New
Range: 5 – 39% Guinea
 Section 3: Industry Updates
GRAINS
Anticipated quantity (and quality) of Victorian grain
and fodder has been downgraded given the wet
seasonal conditions and flooding during harvest.
Strong export demand will sustain high prices but
with historically high cost of inputs, farm margins
will tighten.
BEEF
Beef financial returns have been very positive
since January 2020.
Waterlogging has reduced pasture production and
access in some lower lying regions.
An FMD outbreak would impact beef.
18
HORTICULTURE
Horticulture in Victoria is operating in a challenging
environment, due to the combined impacts from
flooding, adverse wet and cool seasonal
conditions, labour shortages, high input costs and
disrupted supply chains.
SHEEP
Sheep production has been impacted by the cool
wet Spring, including compromised pastures and
disruptions to shearing and stock movement.
Sheep meat prices have declined from recent year
record highs and are predicted to continue
declining. Wool prices remain volatile after several
years of low prices.
An FMD outbreak would impact sheep.
DAIRY
Victorian dairy is enjoying a sustained period of
high milk and livestock prices while managing a
wet spring, flooding (heavily impacted in northern
Victoria) and higher prices for key inputs.
An FMD outbreak would impact dairy.
IRRIGATION
Irrigation demand is low across all irrigation
systems due to the wet seasonal conditions and
ongoing flooding impacts in northern Victoria.
Many northern irrigators will not plant summer
crops due to ongoing waterlogging or access
issues, despite the low price for irrigation water.
 Grains
Grains seasonal conditions
The 2022 Victorian harvest was shaping up to be a record crop,
before significant rainfall between September to November
▪ Forecast 2022-23 winter crop production was tracking to be above
▪ Grain production is predicted to be high for 2022-23, similar to the previous the 10-year average as favourable seasonal and soil moisture
two seasons. Quality of the northern crop is likely to be impacted. conditions at planting saw increased areas sown to grains.
▪ High production costs this year with uncertain returns (amount and quality) ▪ Wet conditions and flooding between September and November
could place pressure on farm margins. Prices remain high. 2022 has resulted in waterlogging, reduced paddock trafficability
and increased pest/disease pressures which will impact grain
▪ Although harvest has commenced in the NW of the state, seasonal
quality and quantity.
conditions have delayed progress. Early indication are excellent yield and
quality of canola and good yield but feed grade barley. ▪ Agriculture Victoria estimates that crop area losses to flood are in
the order of 4 per cent with a further 13 per cent losses due to
▪ Road networks utilised for transporting grain to receival sites are in poor waterlogging.
condition due to waterlogging. Paddock conditions are too wet for heavy
trucks to get on.
▪ Summer weed spraying will commence as soon as the 2022 harvest
concludes in the North-West, as farmers look to retain nutrients and
moisture and reduce the ‘green bridge’ over summer.
▪ Harvest labour is tight as per recent years.
▪ Shipping stems are predicted to be at full capacity.

Aerial photo showing flooding and waterlogging 19

*Agriculture Victoria The Break Newsletter losses to crops near Wycheproof 17 Oct 2022
 Horticulture
Horticulture in Victoria is operating in a challenging environment - with the
combined impacts from high input costs, labour shortages, flood and hail
events and cool, wet conditions.
▪ This is the third year of adverse growing conditions that has put pressure on horticulture
businesses. Reduced income and high costs of production will place pressure on farm
margins. Industry is now looking for support to help business transition.
▪ Flooding, storms and hail across major horticulture regions in October and November
has caused loss of produce for the season, plus reduction in quality and increased
production costs. This includes hand thinning for quality, and in some cases damage
to infrastructure and to trees, which will take up to five years to be productive again.
▪ Increased incidence of crop disease due to very wet weather. With labour shortages
this will reduce the volume of high-quality produce. Farmers will selectively harvest high
value blocks to minimise losses.
▪ For export produce, reduction in exports volumes due to lower quality, higher input costs
(e.g., cost of shipping containers), distribution issues and time delays in shipping.
Outlook for Victorian horticulture
• Potential yield reductions for 2022-23 summer crops due
to impact of wet seasonal conditions, flood and hail
impacts.
• In response to current conditions, some farmers are
selling properties to realise high asset values and
assessing performance of fruit blocks to identify potential
efficiencies. For annual crops farmers who reduced
plantings of less profitable vegetable lines and
consolidated their business are experiencing good market
prices and profitability.
• COVID lockdowns in key Chinese cities will reduce
consumption and lower export volumes.
• Red wine grape vineyards and some pomme fruit
orchards could be abandoned due to the lack of available
markets; this presents biosecurity issues for the broader
horticulture industry.
20
 Dairy
Victorian Dairy Farm Profitability 2006 to 2022
Victorian dairy is enjoying a sustained period of high milk and ▪ 2021-22 was a positive year for farms in the Victorian Dairy Farm
livestock prices while managing a wet spring, flooding and higher Monitor Project# with the fourth highest returns in 16 years.
prices for key inputs. ▪ High financial returns will be needed to recover from October 2022
▪ Average dairy farm profitability in 2021-22 was above the long-term flooding and prior shocks: the 2016 milk price reduction, drought
average, reflecting strong performance and was lower than the previous and input costs 2017 to 2020 had a significant impact on the sector.
year’s high. The strong prices for milk and livestock did not fully offset the
higher input costs.
$4.00
▪ Strong competition for milk is continuing in 2022-23 with record opening
milk prices and further price increases offered by some milk processors.

Profitability*($/kg MS)
$3.00
▪ There are some herd expansions and dairy operation start-ups with
investors and farmers capitalising on good prices.
$2.00
▪ High feed and fertiliser prices and lack of available labour are the major
constraints to production growth. $1.00
▪ Competition for land, high beef prices, farmers exiting dairy, labour
availability and ongoing risk aversion are contributing to the constrained $0.00
milk supply. While dairy farmer confidence remains high, this is not Northern Victoria South-West Victoria Gippsland
translating to milk supply growth. -$1.00

06-07
07-08
08-09
09-10
10-11
11-12
12-13
13-14
14-15
15-16
16-17
17-18
18-19
19-20
20-21
21-22
#2021-22 Victorian Dairy Farm Monitor Project 21
*Profitability (Earnings before interest and tax per kilogram of milk solids, accounting for inflation)
 Sheep and beef

Beef and sheep financial returns have been positive since January 2020.
▪ Beef cattle prices are ten per cent lower than at the same time last year but remain
high. Lamb and mutton prices have been high but there are now headwinds for
prices as the global slowdown sees exporters wanting cheaper sources of red meat.
▪ Wool prices are at their second lowest ranking in the past decade^, only lower in
2020 when the prices were impacted heavily by processing in China, including
‘brownouts’ and COVID lockdowns.
Victorian Livestock Farm Profitability 2005 to 2021
▪ Farm business profit in 2021-22 was above the ten-year
average in each region, with Northern and South-West Victoria
recording the highest average profit in eighteen years#.
$600
$500

Farm Business Profit ($/ha)

$400
▪ Large numbers of livestock were displaced due to flooding of pasture grazing land. A
$300
substantial decrease in fodder supply (and quality) will require supplementary
feeding at higher costs this season. $200
$100
▪ Wet weather and increased sheep numbers to be shorn (and processed) will put
more pressure on labour supply shortages (including shearers) experienced over last $0

two years. -$100

Gippsland North South West
-$200
▪ Foot and mouth disease (FMD) detection in Indonesia raised the potential risk of an

2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
outbreak in Australia. If FMD is detected is Australia, the estimated economic
impact is $80 billion~.

^ EasternMarket Indicator (US$)

~Australian
22
Bureau of Agricultural Resource Economics
*#2021-22 Victorian Livestock Farm Monitor Project
Concluding remarks - conditions
1. In general, agricultural commodities and farm businesses have performed strongly over the past three years. This
has been driven by strong commodity prices and follows significant drought and economic challenges during
2016 – 2019.

2. Victorian agriculture may yet experience above average production during 2022 (likely excepting horticulture),
due to strong production outside of flooded or waterlogged areas.

3. Horticulture is the main industry that does not align to the trend of favourable economic returns, and continues to
be challenged by high input costs, comparatively lower product value, workforce shortages and a lack of
business confidence.

4. Input costs for the agriculture sector have significantly increased over the past two years, doubling in many
circumstances. This therefore resets the 'price required' for profitable farm businesses in the future.

5. Access to farm labour is a critical issue and is an increasingly common issue for regional and rural Victoria.

6. Victorian agriculture is heavily reliant on export markets. Maintaining existing markets, and securing new
markets, is critical to the prosperity of the sector particularly in the context of global economic downturn.

7. Investment in and uptake of research and innovation by Victorian farm businesses is central to remaining globally
competitive and adjusting to the requirements and drivers of climate change.

8. The flooding event has significantly reduced business confidence in northern Victoria, particularly in the GMID.
The Regional Wellbeing Survey suggests that floods can have a worse impacts on mental health than drought,
bushfire or Covid-19.

9. Many flood affected businesses will need extensive and ongoing support during recovery. This will be a key focus
for Agriculture Victoria and associated agencies over the approaching years.

10. Victoria is at elevated risks of biosecurity incursion from major diseases in the region (e.g. FMD, varroa). 23
Concluding remarks - trends
Managing issues and driving change in agriculture requires a high level of engagement with community, stakeholders, all levels of
government and other ministerial portfolios.

Agriculture manages just over 50 per cent of Victoria’s land mass, provides a high quality and consistent food supply to Australia and
other countries and is economically and culturally important, particularly to regional and rural communities.

It is undergoing rapid change. Its reliance on the environment and its critical importance to human health and wellbeing make it
highly exposed to economic, environmental, demographic, cultural and technological trends.

They include, but are not limited to:

Water: Agriculture is Victoria’s largest water user. Issue include drought and Murray Darling Basin Planning.

Climate change: Agriculture is both a contributor to the problem and a source of potential solutions.

Renewable energy: Most of the land needed for renewable energy generation and transmission will be farmland.

Transport: Agriculture relies on road, rail, air-freight and ports to get product to market.

Technology: Rapid change - cell-based meats, genetics, digital, sensors, big data, artificial intelligence and robotics.

Natural disasters and biosecurity: Fire, flood, hail, drought, storm and biosecurity events are an increasing threat.

Land use: High farm-land prices and competing uses - urban, growth, mining, transport and energy infrastructure - impact
agricultural expansion, intensification and practices.

Environment: Environmental impacts including biodiversity, weeds and pests, waste management, salinity and erosion.

Workplace safety: Agriculture is, unfortunately, a leading sector in workplace deaths and injuries.

Animal welfare: Changing community attitudes influence farming practices.

24