Seasonal conditions, global trade settings and economic growth prospects are the topline themes set to be front of mind for Australian farmers in the first half of 2025, according to Rural Bank’s 2025 Agricultural Outlook Report.
With around two thirds of Australian agricultural products exported, increasingly volatile global markets will be key to setting supply, demand and future growth across Australia’s agribusiness sector.
Farmers are expected to encounter a more positive first half of 2025 amidst a generally favourable rainfall outlook and improving demand prospects, though a volatile geopolitical environment remains a concern for the industry. A slight easing of ocean freight rates will provide a small boost to exporters amidst a rise in new vessel capacity and lower fuel costs.
The Report notes that the refreshed trade relationship with China will continue to benefit a range of agricultural sectors, while the potential impact a Trump presidency may have on global trade flows and market access to the USA has also prompted much debate within the Australian beef and wine sectors. Australia gaining an exemption to tariffs that have been proposed during the US election campaign will be a key focus in diplomatic and trade circles over coming months.
Positive outlook
Rural Bank Senior Manager Industry Affairs, Neil Burgess said: “The combination of stronger than expected production estimates, relatively steady commodity prices and global economic growth are providing a more positive outlook for Australian agriculture over the next six months.
“An initially lower Australian dollar will maintain export competitiveness across key agricultural sectors as we head into 2025 and provide a further boost for the economy, but while trade conditions are expected to remain generally favourable, volatility across markets more broadly remains a concern.
“Australian beef production is set to rise in the first half of 2025 following elevated destocking rates with demand set to remain firm as the US reduction in supply favours Australian producers. Cattle prices will ease marginally across the first half of 2025 due to high levels of supply, but overall, the lift in beef production and continuing strong export demand provides a positive outlook for producers, even with softer pricing.
“Demand for Australian lamb is expected to be firm through the first half of 2025. Tighter supply, as well as improved domestic economic conditions and demand from major export markets are expected to keep prices sitting above five-year average levels, albeit steady to marginally lower through the first half of 2025.
Cropping production up, exports to build, feedlot demand strong
“Australia’s wheat production for the 2024/25 season is forecast at 31.2 million tonnes, up 19 per cent from last season, with barley production set to rise five per cent to 11.1 million tonnes, with a tight supply scenario expected to keep Chinese demand for Australian barley strong, providing support for prices.
“Wheat exports have been sluggish at the start of the 2024/25 marketing season and while Australian markets are pricing in export demand, the current price level is not yet competitive enough to capture a larger share of the global market. To establish a stronger position ahead of the northern hemisphere harvest, Australia will need to ramp up exports more aggressively in early 2025.
“National pulse production is forecast to rise by 22 per cent year-on-year with a combination of strong price signals and favourable growing conditions driving this year’s strong growth in chickpea production of 1.5 million tonnes, following the lifting of tariffs by the increasingly important Indian market.
“On the domestic front, feed grain demand is expected to remain strong over the next six months, This is particularly the case for grazing regions in Victoria and South Australia with dry conditions limiting pasture growth – not withstanding the recent rainfall events. The Australian feedlot sector, which has grown by 24 per cent over the past five years, continues to show strength despite a slight slowdown this quarter,” Mr Burgess said.
Horticulture exports a bright spot. Domestic prices to ease at checkout
“For horticultural producers, the outlook for the first half of 2025 remains broadly positive with improving conditions and favourable water availability driving a lift in horticultural production compared to the first half of 2024. Above average production and positive demand will offset lower domestic prices which should ease slightly on the back of strong supply.
“Table grape production is expected to be the second highest year on record, while almond and macadamia prices will sit steady to slightly higher. The outlook for almonds remains favourable following a stellar 2024 with sales volumes for the 2024/25 season still at record pace, with exports up 33 per cent.
“The Avocado industry’s push to expand market access has continued to pay dividends for growers with exports tracking 26.7 per cent ahead of last year. India, UAE, Thailand and Malaysia all recorded substantial jumps in export value, especially for those in the more export focused state of Western Australia,” Mr Burgess concluded.
Read the full Rural Bank 2025 Agricultural Outlook Report here 
State-by-State Roundup
Tasmania
Unlike mainland production regions, a relatively dry November has stone fruit producers across Tasmania poised for a strong season with cherries to benefit from strong export demand into premium markets including China. Although the prospect of substantial rainfall in early December does pose a risk to quality, particularly in minor production regions in the north of the state where upwards of 50mm was received.
A wet spring has quickly refilled the state’s water storages and saturated paddocks. While this has made planting of vegetable crops a challenge in western regions, it will ensure favourable irrigation costs and keep production across staple vegetables (onions and potatoes) elevated in the first half of 2025.
Vegetable prices, which have been falling since spring thanks to warm and dry conditions across the east coast of Australia driving an influx of supply, are expected to sit steady to slightly lower over the first half of the year. An uptick in local consumer demand is anticipated as a result. Export volumes should see a slight lift on the back of the increased availability of most key export varieties (potatoes, carrots, onions).
Tasmanian milk production is forecast to produce less milk than last year as dry conditions continue to take their toll. Southern farmgate prices around 15 per cent lower than last season aren’t encouraging producers to lift production. Our forecast is for Tasmania to produce around 900 million litres of milk in 2024/25, down 4 per cent year-on-year and 3 per cent below average.
Tasmania’s cattle industry is set to experience a steady commencement to 2025. Prices are forecast to marginally ease throughout the first half of 2025, as the dry weather conditions encourage producers to sell stock rather than restock. However, the firm export demand will provide support for prices. Slaughter remains above average and is likely to increase modestly due to the increase in cattle available on local markets for processing centres to purchase.
Tasmanian lamb prices are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024.
Supply will be lower following dry conditions in key producing areas during the first half of 2024, as well the increased turn-off of breeding stock. consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity across the country will also support prices.
The wool market is expected to continue sideways until consumer demand picks up in key markets such as China and Europe. Prices have been relatively flat over the past six months and are expected to face pressure in 2025 due to the seasonal increase in supply, although supply is not expected to be as high as the first half of 2024 following dry conditions and increased sheep turn-off rates over the past 18 months.
Queensland
Water storage levels across FNQ remain near capacity, ensuring full water entitlements for fruit and vegetable producers across the region. Storages are at similar levels in southern Queensland which will also aid Macadamia producers into 2025. Meanwhile, storages across central Queensland are more limited though the prospect of a wet December (with most of the state forecast to see above median rainfall) will improve flows into storages over the next month. Vegetable producers across key regions in Burdekin and the Lockyer Valley are benefiting from these full water storages. High output is anticipated, assuming favourable weather.
The USDA’s latest Fresh Deciduous Fruit report has forecast Australian table grape production will rise to 230,000 tonnes for the 2024/25 season. This would be the second highest production level on record and a significant increase from the 195,000 tonnes produced last season. Queensland production and quality is looking particularly good. Southern states have seen rainfall and humidity impact quality.
Avocados Australia are forecasting Australian production will decline in 2024/25 to just under 131,000 tonnes. This is down from the record production of slightly below 151,000 tonnes in 2023/24 where Queensland accounted for 42% of total output. Queensland output is likely to lift slightly this season following a biennial down year in 2024, while WA output will decline in 2024/25 for the same reason. Shepard avocado season is due to kick off in February and run through May with harvest first starting in Northern Queensland before moving south.
Queensland grain growers have finished harvesting their 2024/25 winter crops with current production estimates making it the state’s second largest crop on record. Quality has been very good with most of the harvest finished before widespread rainfall. Growers are now looking to complete summer sorghum planting which is going into very good soil moisture.
Queensland’s cattle industry is set to experience a big start to 2025. With the recent rainfall, producers may defy the expected broader trend of destocking as the availability of feed encourages restocker demand. If this scenario does eventuate, prices in the state could marginally lift, however the well above average levels of cattle available on the market is more likely to push prices downward. The forecast conditions also appear favourable for producers, with most of the state expected to receive median rainfall or higher. Slaughter rates are forecast to increase throughout the first half of next year, with strong local supply on markets.
Despite favourable seasonal conditions, Queensland milk production is tracking lower year-on-year. Heading into peak production period, output is expected to lift relative to last year, but full season production is forecast to be below the 282 million litres produced in 2023/24. Norco have maintained a record high farmgate price averaging 89.5c/l, which hasn’t been enough to encourage increased production.
New South Wales
The outlook for almonds remains favourable following a stellar 2024 with sales volumes for the 2024/25 season still on record pace and exports up 33 per cent. Pollination for the 2025 crop progressed well earlier this year with the spread of varroa mite having relatively little impact this season, while low irrigation costs will continue to benefit producers. Macadamia production is also looking favourable in northern regions of the state.
A consistent lift in output across most stone fruit varieties remains likely despite some downgrading resulting from weather challenges. According to growers, a heavy rainfall event in late November which passed through South Australia, Victoria and parts of New South Wales at a critical time during the season has reduced harvest totals in certain regions. Humid conditions following the rainfall event has also reduced quality.
New South Wales 2024/25 winter crop production is estimated to bounce back 65 per cent from last season to 17.5 million tonnes, making it the third largest on record. Large chickpea and canola crops have coincided with historical high prices. This has allowed growers to hold off on marketing large volumes of wheat and barley where current values remain at decile 4 to 5 levels. Widespread rainfall towards the end of November has been a double-edged sword, beneficial for northern summer crops but detrimental for southern regions where the harvest is ongoing.
New South Wales milk production is booming, with season-to-date production up almost six per cent on last season, and 2.6 per cent above average. Full season production is forecast to be close to 1.1 billion litres, which, if reached would be the highest total in seven years.
The New South Wales cattle industry is likely to experience a strong start to 2025, with local markets expected to be bolstered as producers transition to a destocking phase following multiple years of restocking. The recent seasonal outlook shows seasonal conditions are expected to be drier, supporting the notion that producers could be leaning more towards destocking rather than restocking.
If this scenario does eventuate, the states prices are likely to move marginally lower, as the increase in stock on local markets will not match the demand from buyers. However, should big Queensland producers move south to buy stock and export demand remains at current extremely high levels, this could provide support for prices going forward. Slaughter rates are forecast to elevate as the strong export demand entices processing centres to continue purchasing large volumes of stock in the first half of next year.
Lamb prices in New South Wales are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024.
Supply will be lower following dry conditions in key producing areas in southeast Australia during the first half of 2024, as well the increased turn-off of breeding stock following the flock rebuild between 2020 and 2023. Consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity will also support prices.
The wool market is expected to continue sideways until consumer demand picks up in key markets such as China and Europe. Prices have been relatively flat over the past six months and are expected to face pressure in 2025 due to the seasonal increase in supply, although supply is not expected to be as high as the first half of 2024 following dry conditions and high turn-off rates over the past 18 months.
Victoria
Victorian milk production is very much a tale of contrasts. Production in Gippsland and northern regions are showing year-on-year improvement, while western regions suffering rainfall deficits are down. Improved production in eastern and northern regions will more than compensate for reduced production in the west with the state forecast to produce around 5.4 billion litres in the 2024/25 season.
Southern farmgate prices aren’t expected to shift significantly from the current average of around $8.10/Kg MS despite improved global dairy prices. This will place additional strain on producer margins in western regions who will require supplemental feed to cover pasture shortages.
Victorian crop growers have faced a challenging season with below average growing season rainfall along with widespread frosts during September occurring at key crop development stages. On top of these challenges, growers through the Mallee received up to 90 mm of rainfall in late November. Much of the unharvested crop through this key region is likely to see some quality deterioration.
Total winter crop production is estimated to fall 29 per cent from last season’s record to 7.6 million tonnes. Despite the drop in production, Victoria will still have a significant export program to complete. Shipping data is showing exports for October through to December are running at around average. Heading into the new year we are yet to see any significant demand from exporters which is reflected in a tough pricing market.
Victoria’s cattle industry, much like its northern counterpart NSW, is likely to see a bolstering of supply on local markets throughout the first half of next year. Conditions are forecast to be average to above average, however the current destocking phase the industry is leaning toward is still likely to entice producers to sell, rather than purchase higher volumes of cattle.
This trend is expected to apply marginal downwards pressure on prices. Strong export demand from key countries such as the US, along with firm processing centre demand for stock will support prices moving into the first half of 2025. Slaughter rates are also forecast to move marginally higher from the already high levels in 2024 as international demand boosts export opportunities.
Victorian lamb prices are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024. Lamb supply will be lower following dry conditions in key producing areas during the first half of 2024 and due to the increased turn-off of breeding stock seen over the last 24 months. Consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity will also support prices.
The wool market is expected to continue sideways until consumer demand picks up in key markets such as China and Europe. Prices have been relatively flat over the past six months and are expected to face pressure in 2025 due to the seasonal increase in supply, although supply is not expected to be as high as the first half of 2024 following dry conditions which have impacted production and lead to increased turn-off rates.
As is the case in NSW, the outlook for almonds remains favourable following a stellar 2024 with sales volumes for the 2024/25 season still on record pace, with exports up 33 per cent. Pollination for the 2025 crop progressed well earlier this year with the spread of varroa mite having relatively little impact this season while low irrigation costs will continue to benefit producers.
A consistent lift in output across most stone fruit varieties remains likely despite some downgrading resulting from weather challenges. A heavy rainfall event in late November which passed through Victoria at a critical time during the season has reduced harvest totals in certain regions according to growers. Humid conditions following the rainfall event has also reduced quality.
Elevated table grape production estimates across the state driven by strong bud burst following high cold chill accumulation and warmer maximum temperatures in recent months will keep prices falling in early 2025, However the prospect of above average rainfall across December following the heavy rainfall event at the end of November poses a significant risk to quality and the accompanying export demand.
South Australia
South Australia has faced a very tough season from the beginning to the end. Most cropping regions recorded decile one or lower growing season rainfall. On top of this, the state’s cropping regions saw several frost events throughout September.
Combined with the dry season, many growers made the choice to cut crops for hay. Total winter crop production is estimated to fall 31 per cent from last season to 6.2 million tonnes, the lowest volume since the 2019/20 drought impacted season.
South Australian wheat prices have lagged Western Australia on an equivalent basis. Once harvest is completed and exporters know what the profile of the crop is, we should see values start to converge back to the usual export differential with Western Australia.
The fallout of the closure of Beston Global Foods will continue to be felt by South Australian dairy producers. It is hoped other processors will step in to secure some of the milk, but many of the company’s suppliers will be left out of pocket. This all but rules out any slim hope of significant step-ups to farmgate prices. SA milk production is tracking around 2% higher year-on-year, but this is expected to moderate in 2025 as producers slow down production.
South Australia’s cattle forecast is for prices to record a downwards shift. The lower forecast comes on the back of an expected lift in cattle availability on local markets. The average weather forecast is more likely to translate into a continuation of the destocking trend across the state, leaving more supply and similar or less demand, which in turn will move prices lower. Slaughter has been strong in 2024 and with firm export demand, this will continue in 2025.
South Australian lamb prices are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024.
Supply will be lower following dry conditions in key producing areas during the first half of 2024, as well the increased turn-off of breeding stock following the flock rebuild and to manage feed availability. Consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity across the country will also support prices.
The wool market is expected to continue sideways until consumer demand picks up in key markets such as China and Europe. Prices have been relatively flat over the past six months and are expected to face pressure in 2025 due to the seasonal increase in supply, although supply out of South Australia is expected to be reduced following dry conditions and high turn-off rates over the past 12 months.
A relatively dry spring planting period combined with generally favourable water entitlements has ensured vegetable producers have gone ahead with full planting programs across most key growing regions of the state.
Elevated table grape production estimates across the state driven by strong bud burst following high cold chill accumulation and warmer maximum temperatures in recent months will keep prices falling in early 2025, however the prospect of a wet December across key production regions is driving some concern for quality amongst producers and the impact this may have on export demand.
The outlook for almonds remains favourable following a stellar 2024 with sales volumes for the 2024/25 season still on record pace, with exports up 33 per cent. Pollination for the 2025 crop progressed well earlier this year, while low irrigation costs will continue to benefit producers. We would expect to see production again move towards 150 to 160,000 tonnes.
The USDA initially forecast stone fruit production would rise on the back of strong winter chill hours earlier this year. Unfortunately, this early season forecast is likely to have been overly optimistic with various weather challenges over the last quarter to impact production.
A heavy rainfall event in late November which passed through South Australia at a critical time during the season has reduced harvest totals by around 10 per cent in certain regions of the state. Humid conditions following the rainfall event has also reduced quality which may impact overall volumes available for export.
Western Australia
Despite a late start to sowing and then a dry finish, Western Australian grain growers are estimated to produce a winter crop in excess of 18 million tonnes, making it the third largest on record. Despite yields exceeding expectations quality has suffered from the dry finish. Overall grain quality is highly variable across the state with high screenings evident from the dry September. Prices for canola, lupins and oats remain at historical highs.
Barley export demand from China is starting to increase which is seeing barley prices supported. As we head into the new year expect premiums for high quality wheat to remain in place as buyers look to secure supply for early 2025 exports.
Western Australia’s cattle industry is expected to follow similar trends to the eastern states, as the increased supply following the herd rebuild over the past few years applies downward pressure on prices. Export demand will remain strong and will limit significant falls in prices.
Wool markets are expected to continue sideways until consumer demand picks up in key markets such as China and Europe. Prices have been relatively flat over the past six months and are expected to face pressure in 2025 due to the seasonal increase in supply, although supply is not expected to be as high as the first half of 2024. Western Australian production is expected to fall following increased processing rates as growers shift away from the industry following the announcement of the phase out of live exports.
Western Australian lamb markets are expected to be steady to marginally lower in 2025. Supply is expected to increase from the levels seen over the past six months but are not expected to be as strong as the first half of 2024. Consumer demand has improved both domestically and from some of our major export markets, while improved processing capacity across the country will also support prices. Grower confidence has been impacted by the phase out of live sheep exports, which is expected to see more growers shift away from the industry.
The value of fruit exports out of WA should also continue to lift thanks to the greater volumes of quality produce, although recent rainfall events across Southern fruit bowl regions at the end of November are driving quality concerns. Strong market access is also continuing to support exports, though demand from China could stagnate amidst challenging economic conditions in the country.
Avocados Australia are forecasting Australian production will decline in 2024/25 to just under 131,000 tonnes. This is down from the record production of slightly below 151,000 tonnes in 2023/24 where WA accounted for 44% of total output. WA output will likely decline in 2024/25 due to a down biennial year after a record-shattering 65,000 tonnes of avocados were produced across the state in 2023/24.
Prices across most key fruit and vegetable varieties are expected to sit steady to slightly lower amidst the higher volumes coming to market.
Margins for milk producers are under pressure with lower farmgate prices this season which is affecting production. WA milk output is forecast at around 330 million litres for 2024/25, down four per cent year-on-year and almost six per cent below average.
