Commodity prices, production and exports ‘beefing up’

Commodity prices, production and exports have broadly lifted in the first half of the year, with beef the standout performer in Rural Bank’s Australian agriculture mid-year outlook 2024 (the Outlook), released today. With an overall outlook favourable for the second half of the year, despite some variability across sectors, some cost-of-living relief is also expected to reach beyond the farm gate. 

Andrew Smith, Rural Bank Head of Agribusiness Development, says farmers experienced varied conditions in the first half of the year, but among the many positives in the performance of the six industries analysed – cattle, cropping, dairy, horticulture, sheep and wool – and for Australian agriculture broadly, beef was a highlight, Mr Smith said.
 
“Australian beef exports to the US for the year to date were up 85 per cent on last year,” Mr Smith said.
 
“Elevated export demand from the US – which has seen its lowest herd since 1951 – and key Asian markets is providing stability in beef prices and opportunities for continued export growth moving forward,” he said.
 
Some relief from cost-of-living pressures is expected for consumers, with the Outlook projecting increased fruit and vegetable volumes.
 
“Some easing in produce pricing for consumers is expected in the coming half, though prices will stay above longer-term averages,” Mr Smith said.
 
Global freight rates remain elevated and are forecast to persist due to tight vessel supply and strong global demand, but the Outlook shows a low Australian dollar has provided support for export markets and has expanded trade access into target markets.
 
“Exports have been very promising, with India’s recent removal of tariffs on Australian chickpea imports until March 2025. Strong pricing signals are expected to see chickpea growers increase planted area by 80 per cent to 730 thousand hectares - 24 per cent above the 10-year average,” Mr Smith said.
 
While dry weather persisted across Western and South Australia, with challenging winter crop planting conditions and pasture growth also impacted, the east coast reported much more favourable soil moisture conditions.
 
“Australian winter crop production should increase nine per cent to 51.3 million tonnes in 2024/25, with increased production forecast to be met with strong domestic and export demand,” Mr Smith said.
 
“Further price rises are expected for lamb, adding to gains in the first half of the year. Strong demand from both domestic and export consumers is expected to provide support for increased prices amidst a high supply environment.”
 
Farm input costs are reported to be easing, says Mr Smith, despite remaining above long-term averages.
 
“Fertiliser and diesel prices will sit lower than the second half of 2023, with water set to remain affordable, too. A rising unemployment rate is also expected to result in greater seasonal labour availability, particularly in Q4, giving Australian farmers a bit of fixed price relief, all round,” he said.
 
To view the full analysis in the Australian mid-year outlook 2024, visit ruralbank.com.au/outlook
 
Rural Bank is a division of Bendigo and Adelaide Bank Limited and provides exceptional financial services, knowledge and leadership for Australian farmers to grow.