After a record-breaking 2025–26, ABARES is forecasting a softer year ahead for Australian agriculture. The latest figures from the Department of Agriculture, Fisheries and Forestry point to a 5% fall in the gross value of agricultural production, down to $98.3 billion in 2026–27 ($104.5 billion once fisheries and forestry are included). Export values are also expected to ease, dropping from around $7 billion to $74.8 billion ($79.3 billion including fisheries and forestry).

It's worth unpacking what's driving the shift and what it might mean for the people running and staffing farm businesses over the next 12 months.

What's Behind the Dip

The headline figures come down to two main forces: drier seasonal conditions and softer commodity prices.

Crops: Total crop production value is forecast to fall by $4.5 billion to $50.9 billion. Winter crop production is expected to decline by 21%, to 54.5 million tonnes, on the back of lower average yields and less area planted. Summer crop production is estimated to have already fallen 15% in 2025–26, to 4.4 million tonnes (though that's still comfortably above the ten-year average).

Livestock: Livestock and livestock product value is forecast to slip by $1.1 billion to $47.4 billion, down from last year's record, largely on the back of softer prices.

Costs: Fuel and fertiliser costs remain elevated and continue to squeeze margins, though ABARES expects the drier outlook to be the bigger factor shaping grower decisions this year.

Global conflict is pushing up input prices and weighing on economic growth, but the value of production is holding up reasonably well overall. ABARES Acting Executive Director David Galeano pointed to variable rainfall over summer and autumn limiting the area planted to winter crops and pasture in some regions, with many cropping areas now bracing for a drier-than-average winter.

Why This Matters Beyond the Balance Sheet

Numbers like these ripple straight through to workforce decisions. When margins tighten and yields ease, farm businesses often have to make hard calls — not just about inputs and planting programs, but about the people needed to deliver them.

A softer season doesn't necessarily mean less need for good people. In many cases it means the opposite: this is exactly when experienced operators, sharp agronomists and steady leadership matter most. Businesses that get through a tighter year well are usually the ones that:

• Plan workforce needs early, rather than reacting once conditions bite
• Retain and support key staff through the tougher patches, so hard-won experience isn't lost
• Bring in the right specialist skills, whether that's agronomy, livestock management, or operational leadership, to help make the most of a harder season
• Keep an eye on succession and leadership pipelines, even when the immediate focus is on managing costs
  

Looking Ahead

A 5% pullback after a record year isn't a crisis; it's part of the normal rhythm of Australian agriculture, which has always had to manage variable seasons and shifting global markets. But it is a signal worth planning around, particularly for regions facing a drier winter.

If your business is thinking through what this outlook means for your team, The Lucas Group is here to help. If you're planning ahead for key hires, navigating a leaner season, or making sure you've got the right leadership in place to manage through it, we're ready help you plan for what's next.

Get in touch with The Lucas Group to talk through your workforce planning for the season ahead.

Source: Department of Agriculture, Fisheries and Forestry (DAFF)