Net Farm Income: Droughts & Oil Shocks
I got bored the other day and for some reason plotted the Index of real net value of farm production farm production from the ABARE Australian Commodity Statistics 2007. Yes I’ll ignore the fact that I need a life.
Now I was expecting the decline in the relative income during the major droughts during the period (1965-68, 1982-83 and 1991-95) and these are marked on the chart. What did surprised me however, was the jumps in income during the oil shocks. The only thing I can think is that initially prices received (i.e. like the current jump in wheat prices) and then costs increases removed those gains the next year (i.e. cost of fertiliser).
It’s going to be interesting to see what happens when the 2007-08 data gets released.
Friday 20 Jun 2008 | David | Economics - general
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