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Forrest unveils northern farm plan

Mining billionaire Andrew Forrest has revealed an ambitious plan to join forces with Chinese investors to open up vast tracts of northern Australia for irrigated agriculture.

Mr Forrest said the plan relied heavily on tapping into underground aquifiers, including the Canning Basin in WA's far north, to supply at least an extra 5000 gigalitres of water a year to drought proof agriculture.

His family company Minderoo has asked major universities to lead localised studies on the location of water resources and the feasibility of capture, extraction and transport of water.

"These underground basins will allow us to minimise the infrastructure costs of constructing dams and pipelines," Mr Forrest told a major farming conference in Canberra.

"We will be targeting local areas around these water sources to promote intensive production of cereals, grains, fruits, vegetables and pasture for protein production."

Mr Forrest said he would discuss the huge project in China over the next few weeks.

"My aim is to encourage strong long-term passive investment from the Chinese in these projects to help unlock their potential," he said.

"I have asked the Chinese and Australian governments to take a long-term attitude to encourage the development of Australian agricultural food supplies through infrastructure."

Mr Forrest told the ABARES conference that foreign investment was vital to increasing production and improving efficiency in Australian agriculture.

He said there were many parallels between agriculture and the economic opportunities presented by the mining industry two decades ago.

"The time is now, and failure to seize the moment will be catatonic to the industry we all know and love, not to mention Australia's economy," he said.

ABARES senior economist Trish Gleeson told the conference 2014-15 was set to be a record year for beef and lamb exports.

Ms Gleeson said Australian livestock producers could expect higher farmgate returns and improved farm incomes over the next few years.

"With strong export demand and a more favourable exchange rate, the next few years are expected to provide higher farmgate returns to Australian livestock producers, and improved farm incomes," she said.

Saleyard prices for both beef cattle and lamb are forecast to increase in 2014-15 and 2015-16:

The weighted average saleyard price of beef cattle is forecast to increase by 19 per cent to average 349 cents a kilogram in 2014-15 and by a further 16 per cent to average 405 cents a kilogram in 2015-16.

The saleyard price of lambs is forecast to increase by 7 per cent to average 510 cents a kilogram in 2014-15 and by a further 15 per cent to average 584 cents a kilogram in 2015-16.

"Providing support to prices, rebuilding of cattle herds and sheep flocks are expected over the next several years after dry conditions resulted in reduced numbers. Beef cattle numbers are forecast to fall to 23.7 million in 2015-16, down from a peak of 26.5 million two years earlier. Sheep numbers are estimated to have fallen to 70.7 million in 2014-15, down from 75.5 million in 2012-13," Ms Gleeson said.