Agriculture, forestry and fishing

Outlook

The value of the Territory’s agricultural output is expected to grow over the outlook period, reflecting new investment in horticulture and new crops coming into production.

In 2021-22, the Territory agriculture, forestry and fishing sector accounted for 2.8% ($805 million) of GSP and 1.5% (2,000 people) of employment. Although international cattle exports have declined recently, this has been offset by increased interstate cattle trade. Conditions for horticultural production have been favourable in 2022-23, reflecting strong melon production and a solid, albeit difficult, mango season. The outlook for the rest of the forecast period is positive, with above-average rainfall improving grazing conditions, continued investment in new crops, and the Territory’s largest forestry plantations approaching maturity (Map 4).

One of the main risks to the outlook is the ongoing labour shortage. The number of backpackers has not fully recovered since the COVID-19 pandemic, and the industry competes with the hospitality industry to fill positions. Higher input costs also present a challenge, as agricultural businesses are generally price takers in output markets and are unable to pass on these higher costs. Several serious biosecurity threats have also been detected in the Territory’s closest trading partners, which would greatly damage the industry in the event of a local outbreak.

Live cattle

The Territory’s live cattle exports are expected to decrease in 2022-23, with the number of cattle shipped from Darwin Port down 21% in the financial year to date (July 2022 to March 2023) compared with the same period in 2021-22. Declines were reported across all the Territory’s major trading partners in 2022, leading to the lowest number of live cattle traded in over a decade (Chart 15).

Chart 15: Annual number of live Territory cattle overseas exports, by destination¹

1  Other comprises Brunei, Cambodia, Egypt, Timor‑Leste and Thailand.
Source: Department of Industry, Tourism and Trade

Domestic cattle prices remained at record highs through much of 2022, with cattle also trading at elevated prices in international markets. Above-average rainfall, particularly in the southern states, led to strong domestic demand for Territory cattle to restock. This trend has been observed over the past 18 months, even affecting herds traditionally intended for export. The domestic trade market is expected to grow as pastoralists diversify away from the risk that comes with international trade.

With strong rainfall continuing into 2023, pastoralists in the Territory are likely to rebuild their own herds through 2023, following several years of downsizing. The new stock would reach maturity by 2024, leading to a rebound in overseas live cattle exports. Although there is uncertainty around the future trajectory of prices, Darwin live export feeder steer prices were trading at $3.90 per kilogram by the end of March, down from $5.25 per kilogram in the previous year. While this is a significant drop, feeder steer prices have historically ranged from $3.00 to $3.50 per kilogram prior to October 2020, when exporters experienced issues with supply.

Indonesia is the Territory’s largest live cattle export market, accounting for 90% (160,123 head) of cattle exports in 2022. India is Australia’s major competitor in the Indonesian beef market, with its lower quality and cheaper priced frozen buffalo meat. This competition, along with higher Australian cattle prices and the Indonesian Government’s policies to achieve self-sufficiency for major commodities, including beef, continues to have an impact on Australian live cattle exports.

Over the past few years, lumpy skin disease has spread through herds in South-East Asia and disrupted live exports, reaching Indonesia in early 2022. Around the same time, foot and mouth disease, another highly contagious infection, was also detected in Indonesia. Both diseases are still prevalent and are major risks in 2023. A widespread outbreak of either disease in Australia would significantly impact live cattle and buffalo exports, as well as hides, meat and dairy products. In response to the threat, the Commonwealth announced $61.6 million in funding to boost biosecurity for northern Australia as part of its 2022-23 Budget.

Live buffalo

The export of live buffalo is a small industry in the Territory with further growth potential. The relatively higher price of live cattle positions live buffalo as an alternative product for South-East Asia. Indonesia is the largest export destination for Territory buffalo, accounting for 72% (7,314 head) of total buffalo exports in 2022, followed by Brunei at 18% (1,869 head) (Chart 16). Overall, buffalo exports decreased slightly by 6% in 2022, although recorded the third strongest year on record with a smaller decline in volume traded than live cattle exports. Despite increased overseas demand, the industry is not expected to see any significant increase in production due to the challenges of harvesting wild buffalo.

Chart 16: Annual number of live Territory buffalo overseas exports, by destination

Source: Department of Industry, Tourism and Trade

Other livestock products

According to data from the Commonwealth Department of Agriculture, Water and the Environment, overseas beef exports from the Territory continued to decline, from 146 tonnes in 2021 to 55 tonnes in 2022. The short-term outlook for beef production is expected to be subdued as cattle farmers focus on rebuilding their herds.

Australia accounts for 64% of the global trade in saltwater crocodile skins, with most being farmed and exported by the Territory. Revenue from the Territory crocodile industry increased by 20% to $29 million in 2021-22. Although demand for the high quality skins remains strong, there is a large surplus on the second grade market that is putting downward pressure on prices. Revenue is forecast to increase in 2022-23 as farmers focus on producing higher quality skins, although future production will be limited by collection challenges.

Map 4: Territory agriculture, forestry and fishing¹

Click on map to enlarge

1  This map is produced from various sources. Department of Treasury and Finance cannot guarantee the accuracy, currency or completeness of the information. To be used as a guide only.
Source: Department of Treasury and Finance; Department of Industry, Tourism and Trade

Horticulture

The outlook for horticultural production is positive over the forecast period, with several potential developments in the outer years.

Mango production accounts for a large proportion of the Territory’s horticulture sector (around half of total value, excluding forestry) and is strongly influenced by seasonal conditions and demand in southern Australian markets. The 2022‑23 mango season began earlier than usual, with reportedly stronger yields. However, above average rainfall in late 2022 damaged a significant amount of produce from Top End growers, leading to an abundance of second grade fruit entering the market. As Katherine mangoes entered circulation later in the season, mango prices continued to drop, with some farms ceasing harvests altogether. Overall, production was stronger in 2022‑23, although constrained by seasonal factors. During the season, around 285 tonnes of Territory mangoes were flown directly to South Korea, Hong Kong and Dubai in the 2022-23 season, which marks the first time mangoes have been exported to these countries directly from the Territory. This was possible following treatment at the new vapour heat treatment facility at Darwin Airport. Expanded overseas access presents a significant opportunity for mango growers to diversify from predominantly interstate trade.

Melon farming is the second-largest horticultural activity in the Territory. Though numbers are yet to be finalised, melon production grew in 2021-22 and is on track to increase again in 2022‑23. The main driver for this growth is the development of new land in the Douglas-Daly region, with high levels of investment by several growers.

There are several new crops under consideration that are expected to increase the value of horticulture production over the outlook period. Up to 15,000 jackfruit trees are planted in the Territory but most are yet to produce fruit. Dragon fruit, passionfruit and rambutan production is also expected within the next five years following earlier hybridisation trials.

Since the onset of the Russia-Ukraine conflict, diesel prices and fertiliser prices have remained at elevated levels, which presents a significant input cost to growers. Labour supply will continue to be a challenge in the sector for the foreseeable future. The Commonwealth ceased the agriculture visa program in 2022 and expanded the Pacific Australia Labour Mobility (PALM) scheme in its place. However, under current conditions, the PALM scheme requires employers to accommodate workers for up to nine months, which is significantly longer than the typical 2-month mango season.

Broadacre crops

Cotton production is growing quickly in the Katherine region, with around 10,000 hectares planted in 2022, up from 7,500 hectares in 2021. Production is expected to continue growing rapidly over the outlook period, with studies suggesting the value to production from the cotton industry could grow to $200 million per annum within 10 years. A grower-operated cotton gin in the Katherine region is expected to be finished in August 2023, which will scale up with increased production. In addition, cotton seed is a high-protein feedstock that could increase the weaning rate of cattle, which also creates an opportunity for farmers to earn carbon credits from improved efficiency.

Forestry

The outlook for the forestry industry is generally positive, noting the longer-term nature of the activity means the economic return takes many years to realise. There are currently 42,000 hectares of plantations in the Territory that are expected to produce an average of $100 million per annum over the next 10 years. The two main types of plantations grown in the Douglas-Daly and Katherine regions are African mahogany and Indian sandalwood. Trials of Indian sandalwood are also planned for Groote Eylandt. Despite having different times to maturity, the African mahogany is expected to be harvested in coming years, providing a boost to the Territory’s total value of agricultural production.

Up to 35,000 hectares of Acacia mangium plantations on the Tiwi Islands are being harvested and sold on the international woodchip market. COVID-19 continued to cause supply chain disruptions in 2022, although demand was strong throughout this period. Production increased from 23,000 green metric tonnes (GMT) in 2020-21 to 77,000 GMT in 2021-22, but remained below the 2019-20 level of 122,000 GMT. Production is expected to rebound strongly in 2022-23, with 109,000 GMT already exported in the second half of 2022.

Fisheries

The outlook for fisheries production in the Territory is positive, reflecting a recovery in fishing stock following another year of favourable weather conditions.

In 2021-22, production from wild harvest fisheries increased by 14%. Wild barramundi and mud crab production are affected by environmental conditions, and after favourable wet seasons in 2020-21 and 2021-22, mud crab production significantly increased, and wild barramundi production is expected to improve in another year.

In offshore fisheries, the Timor Reef Fishery experienced an increase in catches in 2021-22, while production from the Demersal and Offshore Net and Line Fishery remained stable.

The value of aquaculture production grew in 2021-22, reflecting increased barramundi production. The outlook for the Territory aquaculture industry is positive, with expansions of existing operations expected to enter production. The Commonwealth is currently considering laws to introduce country-of-origin labelling for seafood in the hospitality sector, which may raise consumer awareness and preferences for Australian produce.

Territory Government agribusiness development

There are several projects and opportunities that focus on developing the agriculture, forestry and fishing sector in the Territory. Priority projects include the Katherine Logistics and Agribusiness Hub, Keep Plains Agricultural Precinct (Weaber Plains Development of the Keep River Catchment), Larrimah Agricultural Precinct, Wildman Agricultural Precinct, Gunn Point Emerging Agribusiness Development Precinct, an improved regional road network and developing infrastructure to increase export opportunities.

Under the Commonwealth’s $2 billion Water for Australia plan, up to $300.6 million will contribute towards the first stage of the Darwin Region Water Supply Infrastructure Program, which includes returning Manton Dam to service and preliminary works for the Adelaide River off‑stream water storage project. Consistent with the findings of the detailed business case, investment in additional water supply will support a range of industries across the Darwin region including new agricultural development.

Land developments

In 2020, the Territory Government released expressions of interest for three large-scale agricultural land developments: the Keep Plains Agricultural Development (total area of 67,500 hectares with up to 15,000 hectares suitable for intensive irrigated agriculture); Wildman Agricultural Precinct (26,000 hectares); and Larrimah Agricultural Precinct (5,700 hectares). In 2022, separate developers were successfully appointed to the Keep Plains Agricultural Development and Larrimah Agricultural Precinct, with both developments set to contribute to regional growth and increased agribusiness production. The Wildman Agricultural Precinct is currently under negotiations with a private developer.

The Gunn Point Emerging Agribusiness Precinct, co-funded by the National Water Grid Authority and in partnership with the Territory Government, was established to trial the commercial viability of agricultural opportunities that could be rolled out on a broader scale. The project area is made up of two blocks over 260 hectares, allowing for multiple participants. Expressions of interest for the Gunn Point project are expected to be invited in mid to late 2023.

Collectively, these developments provide an opportunity to significantly expand the Territory’s agricultural production area and offer opportunities for new investment in a wide range of high value crops, including mangoes, bananas, melons and forestry, as well as broadacre crops such as cotton, sorghum and chia. The Territory Government is currently identifying additional areas that could advance future regional agricultural growth.

Another prospective region in Western Davenport is Singleton Station, which has been identified as having the potential to produce up to 150,000 to 200,000 tonnes per annum of various crops, with the project currently undertaking rigorous regulatory approvals. There has also been interest in further expanding the Douglas-Daly region, with opportunities for several pastoral properties in the high rainfall zone to further develop land for intensive agriculture and horticulture production.

For the latest data on the agriculture, forestry and fishing sector, refer to the Territory Economy website.