Grains Research and Development

Date: 01.07.2005

GRDC - Ground Cover Issue 56 - Weather: southern zone - Looking beyond rain

Figure 1: Farm incomes for the Mallee simulated by ABARE

By Dr Rohan Nelson

When it comes to climate variability and drought, what we are really interested in is the impact on farm incomes, and the flow-on effect to rural communities. The GRDC is at the forefront of seasonal climate forecasting, supporting the natural evolution of income forecasting from past investment in rainfall and crop forecasting systems.

A project recently completed for the GRDC by ABARE has shown that seasonal climate forecasting can be extended to crop farm incomes. This new technology is built on crop and pasture forecasting systems developed by the Departments of Agriculture in WA and Queensland, and the Queensland Department of Natural Resources and Mines.

ABARE"s model simulates farm incomes from 1900 onwards across all of Australia"s cropping regions, assuming current farming conditions and technology. When combined with the same Southern Oscillation Index (SOI) forecasting approaches used to forecast rainfall and crop production, ABARE"s model shows the impact of expected seasonal conditions on farm incomes for the coming financial year.

For example, when the SOI is negative or falling at the end of May and June, crop farm incomes in the Mallee are more variable and have a lower probability of reaching the longterm median in the coming year (Figure 1, red box). This is in contrast to years with a positive or rising SOI at the end of May and June, when incomes are less variable and more likely to exceed the long-term median (blue box). A similar pattern emerged from ABARE"s work for other cropping regions in southern NSW, Victoria and South Australia.

Results show that the movement of the SOI over May and June provides a useful indicator of how the season might finish in southern Australia. While this is too late to alter pre-sowing decisions, forecasts of farm income are useful for industry planning and policy decisions. This research also shows that GRDC is leading the way in the natural evolution of seasonal climate forecasting beyond rainfall and crop production to what really matters to growers - the bottom line.

For more information: Dr Rohan Nelson, 02 6263 6070, or find the full report at www.abareconomics.com
Dr Nelson is on secondment from ABARE to Land and Water Australia.

Region North