Seasonal conditions once again played a big role in the strong result for 2022-23, with the GVP result declining by a modest 9% year on year. However this needs to be put in the context that the last two financial years have been the only years to exceed $20 billion to date. Even more impressively average GVP for the three years until 2022-23 was $21 billion which reflects just how exceptional this period has been for the primary industries sector in NSW.

Underpinning the strong result was the cropping sector. Although, winter crop production came off the highs of last year with both plantings and yields down compared to the year prior, production remained 30% above the 10 year average. ¹ Summer cropping activity remained robust, with near maximum water allocations supporting production in that sector. Crop prices remained elevated, and in particular cereal prices, however cotton and canola prices came off record highs of last season attributable to a modest increase in supply from North America.

Fading La-Nina conditions in 2022 brought some challenges to the horticultural sector, with cooler temperatures and wet conditions impacting blossoming and yields, while the wet conditions and some flooding also impacted sowing activities of some annual horticultural crops, creating some supply shortages and price volatility.

In contrast, supply of beef and sheepmeat continued to lift as a result of the strong flock and herd rebuild since 2020. Production of all other livestock and livestock product categories also lifted in 2022-23, except for dairy. Offsetting the lift in supply, cattle and sheep prices came under considerable pressure through the second half of 2022-23, as processors have struggled to keep up with a significant lift in supply from producers, particularly as dry conditions in the north of NSW began to intensify.

A highlight of 2022-23 was the exceptional export result for NSW primary industries which has set a new high water market and record level of $13.1 billion. ^{35 x y} This extraordinary result comes just one year after NSW primary industries exports broke $10 billion for the first time. Driving this result was a significant increase in cotton exports as well as modest increases in wheat, sorghum, and rice exports. Three strong consecutive seasons leading into this financial year meant there was ample exportable surplus. However, NSW primary industries reputation for high quality product meant this increase in supply was met by strong international demand.

• The ongoing war in Ukraine continues to have ripple effects through the global economy, with many key agricultural inputs remaining elevated and increasing production costs despite a positive impact on some crop commodity prices.
• Above average spring and early summer rainfall meant that winter crop yields and quality were not maximised, while waterlogged fields meant some summer crop plantings were impacted.
• Biosecurity events remain a top priority, with varroa mite impacting the honey bee industry and pollination services and white spot disease impacting the prawn industry. Additionally, NSW faces a range of threats on our state or international borders including Red Imported Fire Ant present in Queensland, and Lumpy Skin Disease and Foot and Mouth Disease present in Indonesia.
• Drying conditions in Northern NSW which has been spreading as the year progresses, has resulted in increased livestock turnoff, and supplementary feeding in several regions. However, these impacts are likely to become more apparent in the 2023-24 GVP results.

The NSW DPI is supporting the primary industries sector through a range of investments and programs to strengthen the sector in NSW. The Department is guided by the NSW DPI Stronger Primary Industries Strategy 2022-2030. This Strategy is underpinned by six key outcomes with associated deliverables which guide programs and investment to deliver for NSW producers. A number of examples of DPI’s current activities and programs can be found throughout the commodity pages of this publication.

Looking forward to 2023-24, the Bureau of Meteorology’s announcement of El-Nino conditions creates some additional risks to the outlook. ¹²⁷ The announcement confirms what many farmers have been experiencing on the ground since early 2023, particularly in areas of the North West, Coastal and Hunter communities. As a result, crop production forecasts indicate that some regions will be impacted disproportionately with southern NSW conditions leading into winter crop harvest significantly better than Northern NSW. Summer crop production is anticipated to remain above average as a result of substantial water storage levels and opening water allocations. The forecast for a hotter and drier summer has impacted livestock producer confidence, with the increase in cattle and sheep supply and less restocker demand contributing to some significant price falls. Current processing capacity constraints are also adding to the downward cattle and sheep price pressure. The combination of factors currently points to GVP declining between 14% to 16% year on year in 2023-24, with a preliminary forecast of between $17.8 billion and $18.3 billion, and modestly lower than 2020-21 levels.