Victorian food and fibre exports take a COVID hit

While Victoria still made up 27 per cent, or $14 billion, of all Australia's food and fibre exports in 2020-21, their value was down 3pc, or $476 million,on the previous financial year.

But the Victorian Food and Fibre Export Performance report for 2020-21 showed grains bucked the trend, with a value of $2.5 billion, up $1.5 billion or 132pc, on the previous year.

"Victoria recorded its second highest grain harvest on record, following an ideal growing season and suitable harvest conditions," Agriculture Victoria reported.

"While export values were down, export volumes increased by 3,579 tonnes or 43 per cent."

Agriculture Victoria found while the Australian dollar averaged 74.7US cents in 2020-21, 11.2pc higher than 2019-20, exporters were unable to take full advantage of the higher price, due to COVID-19 disruptions.

"Freight continues to be a major problem for exporters due to the COVID-19 pandemic," the report found.

Read more:

Meat continued to be the largest value food and fibre export commodity despite a decrease in value of $1.3b. down 28pc.

""Major disruptions to supply chains, lack of availability of shipping containers and passenger aircraft, combined with massive increases in costs for both air and sea freight, have all impacted on the export performance of the sector and will continue to be major challenges for exporters in the coming years," the report found.

That figure included a decrease of 20pc for sheep meat exports and a 39pc cent decrease for beef exports.

Volumes of frozen beef exports were down 71pc but volumes of chilled meat were up 143pc cent.

"Beef exports from Victoria to China decreased by 66pc in volume," the report said.

China increased its beef import volumes by 11.5pc on the previous year, due to ongoing protein shortages and continuing demand, but that was met by Brazil.

Tight supply, driven by northern Australian restockers, also had an impact.

Horticulture exports were also disrupted by port closures in destination countries.

"Fresh fruit, in particular, was impacted with long unloading times and last-minute market diversions," the report said.

Horticulture exports were valued at $1.36b in 2020-21, a decrease of $248m, or 15pc, and volumes decreased by 7pc.

"Victorian horticulture experienced a challenging year with the closure of international and state borders due to the COVID-19 pandemic, resulting in a shortage of seasonal labour for the harvest periods," Agriculture Victoria said.

"A shortage of containers also affected the volumes of produce that could be exported and increased associated costs.

China was the largest export destination for horticultural exports from Victoria at 31 per cent, a reduction of 35 per cent in value from the previous year.

Animal fibre exports from Victoria remained steady in 2020-21.

Demand for wool impacted prices, although export volumes increased by 28,000 tonnes.

Wool exports to China remained strong with an 11pc increase in value, with that country buying 84pc of Victoria's wool exports.

Exports of milk and cream stood at $1b, up 5pc on the previous year.

The fall in exports led the opposition to claim Victoria risked losing its crown as Australia's agriculture powerhouse.

Opposition Agriculture spokesman Peter Walsh said the government's failure to secure more access to new and emerging global markets has seen the value of Victoria's food and fibre exports in 2020-21 sink below $14 billion for the first time since 2017.

He said at the same time, NSW food and fibre exports were booming with the nearly $1b increase in 2020-21 boosting its total share of the nation's agriculture exports by 2pc.

NSW had 19 per cent of total Australian exports, compared with Victoria, which sat at 27pc.

But the NSW Department of Primary Industries said while meat and other livestock products remained the state's largest export sector, they fell 15pc in value to $3.655m.

At the same time cropping sector exports lifted 269pc in value to $2.55m.

"With beef production falling as producers rebuilt stock numbers, overall beef exports fell 26pc," the DPI said in its annual report.

"The fall in beef exports was more than offset by significant increases in exports of wheat, canola, chickpeas, sorghum and barley."

Horticulture exports were also down 38pc, to $288m.

Mr Walsh said Victoria was failing to weather global supply chain disruptions, because the government had essentially stopped work to diversify market access.

"The government has decreased spending on trade and efforts to diversify farmers' access to global markets when it should have been boosting it," Mr Walsh said.

"We rely on China for 26pc of our exports - that's more than three times the United States and Japan, our next biggest trading partners."

He said in the past 12 months, Victoria's food and fibre exports were down in eight of the 10 commodity groups.

That included exports of fruits (20pc) table grapes (27pc) dried grapes (26pc) and wine (18pc).

Mr Walsh said the government axed efforts to strengthen trade and global engagement last year - at a time when global markets are in turmoil.

Agriculture Minister Mary Anne Thomas said exports to Vietnam, the Philippines, Belgium and Sri Lanka increased during 2020-21, as new market opportunities opened.

"Export volumes increased by 3,579 tonnes or 43 per cent, fuelled by near-record grain exports, although values declined 3pc, or $476 million. "

China continued to be the highest value destination for Victorian food and fibre exports, accounting for 26 per cent of the states' total.

Ms Thomas said wine exports to the United Kingdom increased by 30pc, to become Victoria's most valuable market.

"While the economic impact of COVID-19 resonated around the world, Victoria's global standing as a provider of high-quality food and fibre products protected the sector from the worst of the economic fallout," Ms Thomas said.

"Our producers and exporters demonstrated their strength, resilience, and capacity to adapt throughout this challenging time.