THE federal government's commodity forecaster is predicting a subdued outlook for Australian producers, as exporters continue to feel the effects of a high Australian dollar.
The Australian Bureau of Agricultural and Resource Economics and Sciences' (ABARES) March quarter commodities report forecasts the Australian dollar to average 104 US cents in 2013/14.
Beyond that, it sees a gradual depreciation toward parity against the US dollar by 2018.
"The strength of the dollar will continue to put pressure on our exporters going forward," ABARES executive director Paul Morris told the agency's annual conference in Canberra on Tuesday.
In the medium term, ABARES expects total production for the agriculture, fisheries and forestry sectors to fall to around $50 billion per annum - four per cent below the average of the past decade.
At the same time, the exports are likely to fall six per cent to around $37 billion.
The Australian outlook is also being driven by an expected moderate improvement in world growth and stronger competition on global markets from other suppliers.
Mr Morris said local producers also face high input costs which, along with the high currency, would offset some relatively favourable global food prices.
"For agricultural, fishing and forestry industries to grow in the future will depend on their ability to significantly improve their productivity growth going forward, but also target the needs of those consumers in Asian markets," Mr Morris said.
He said the industries were also feeling the pressure of government regulation.
"While these regulations may be legitimate from a social or environmental prospective, they do pose an economic drag on the competitiveness of industries," he said.
However, Mr Morris said there were longer term opportunities, particularly in Asian markets.
"In a total supply sense, we can't produce enough to feed Asia, but in a quality sense we can be a food bowl for higher paying consumers in the region," he said.
