Senate Rural and Regional Affairs and Transport Legislation Committee, , 5:24:30 to 5:27:22
ABARES explains their methodology for forecasting global market shocks, focusing on fertilizer and fuel price volatility.
Topics: Food security, Agricultural productivity
Speakers: Speaker 23, Senator Ross Cadell, Matt Lowe, Miss Victoria Anderson, Unknown Speaker
when you we talked about you know not different lens is it supply lines we talk about [clears throat] current state of the world things going through this different lenses looking at I think you raised that you're not changing your structure because of what's going on it's the reason for it have you done any modeling um since you know Iran where we had the ura issues where we had diesel issues now a bears are saying we're looking like a a positive crop again do a whole lot of how do you model that looking at world shocks are you looking at best case worst case on these things
>> yeah it's um it's a a relatively complex area and I'm conscious that um Abezz would be better place to talk about it
>> why don't they join us senator looking over my shoulder the people can who can answer your question
>> um sorry but in short um the answer is yes senators as part of the um uh Australian commodities report uh they do do forecasting work associated with
>> How do you do such forecasting? What do you put in? What is the model? How do you make make the omelette?
>> Thanks very much Senator. Um we use a few different approaches depending on the questions that we're looking at but we're certainly looking at what's happening in current markets and some of our inputs are we're looking at futures markets. So that's what the expectations are of um what's going on and how it might play out in a few months time. Uh but we also work closely with colleagues across government uh colleagues in DEQ monitor it quite closely. Um but we also you know consult with colleagues in treasury as well. Um we often think about it though not just in terms of fuel overall but obviously given its importance to agriculture we look at diesel as well and certainly we've been um following developments with diesel markets and refinary margins there. So we take all that information and use it for both public work like the agricultural commodities report but we also feed it into policy discussions such as the food security strategy.
Again, how how deep down though you can dig all the way forever. How how did you you look at pesticide use improvements in pestifiides, fertilizers, that sort of thing. Do you look at natural improvements?
>> Predominantly over the last 12 months, at least within Abears, this might be different for other parts of uh the department. We've focused mainly on fertilizer and fuel. and again um a combination of some some again um a lot of market input in terms of futures prices but also drilling down into some of those margins uh that we were talking about. So that would be starting with global prices looking at um various refining margins and then trying to equate that to uh impacts on retail prices in Australia uh as well as impacts for farmers which