Since the beginning of the last century, Australia has experienced three prolonged, widespread droughts — the Federation Drought (1895–1903), the drought that coincided with WWII, and the Millennium Drought (2001–09). In between these episodes, there have been shorter, more localised, but often more severe droughts.

More recently, much of eastern Australia has been experiencing prolonged dry conditions and, over the winter months, unusually high temperatures.

The most obvious economic impact of a drought is on the volume of agricultural production, particularly of crops, which typically fall sharply during a drought, and then rebound strongly after the drought has broken. The impact on livestock products (such as meat and dairy) is a little more complicated. Once drought conditions have become established, livestock producers will seek to reduce their herds or flocks, resulting in a temporary increase in the recorded volume of meat production – similar to what we are witnessing at present. When the drought breaks, recorded meat production typically falls as graziers focus on rebuilding their herds. We are yet to see this flow-on effect.

The more recent droughts have seen a smaller decline in agricultural output than those of earlier decades. That’s because they have tended to be more regionally concentrated than those of the 1960s, ’80s and ’90s. Thus the current drought has been concentrated in Queensland and New South Wales, whereas Western Australia, which in recent years has accounted for a larger share of Australia’s crop production, has been experiencing more normal weather conditions.

Farmers are typically better prepared for drought than in earlier decades. This is partly because of better weather forecasting, greater use of irrigation and smarter crop rotation and herd management. Farmers have also been able to make use of financial tools, such as farm management deposits, to “smooth” weather-induced fluctuations in their income.

Despite these broad economic improvements (compared to previous droughts), many of the flow-on effects are hurting both farmers and their rural communities. In an effort to support local businesses many regional towns have focused on diversifying their economies through tourism. Attracting visitor numbers from larger cities injects much-needed money into these communities, providing employment opportunities and a boost in morale for those doing it tough.

Although there is no foreseeable end to the current drought, there are signs, particularly in Southern NSW of some rain. However, it will take a number of seasons for the necessary benefits to economic and social recovery for these areas to be felt.


Photos Courtesy of Richard Ryan – Young, NSW (Oct 2019) & Dubbo Airport, NSW (Sept 2019)