Thursday, February 20, 2025

Positive six month outlook for Australian ag

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The Rural Bank has predicted that the 6-month outlook for Australian Agriculture is broadly supportive thanks to strong export demand and favourable price forecasts while challenges from a consumer spending perspective remain, with a dry seasonal outlook also a concern for some regions.

Beef

Michael Gorogo, Senior Agribusiness Relationship Manager – Queensland said Australian cattle prices are likely to trend slightly higher throughout the next six months thanks to a lift in export demand.

“With the US continuing to battle a reduced herd, Australian producers are expected to see further export opportunities to key markets for the rest of 2024,” Mr Gorogo said.

Domestic demand for Australian beef is likely to marginally lift throughout the second half of 2024.

Retail prices in the March quarter were 4.5 per cent lower year-on-year and this is expected to translate into a lift in volume consumed during the remainder of the year.

However, ongoing cost of living pressures are likely to keep demand limited for higher end beef products.

Export demand is likely to continue strengthening throughout the second half of the year.

This is largely due to reduced US production driving strong import demand from the US and reduced competition from the US in other markets.

US beef imports are forecast to rise by 12 per cent in 2024 by the United States Department of Agriculture (USDA), following a 9.9 per cent increase in 2023.

Australian beef has been a large beneficiary of this stronger import demand so far in 2024.

Chinese demand is likely to increase thanks to the recent removal of export suspensions on several Australian processing centres.

Export volume to China has been 3.5 per cent lower year-to-date and this comes as Australia continues to face strong competition for this market with South American countries.

China is also forecast to see a 2.3 per cent increase in domestic production, which could limit growth in imports of Australian beef.

Cropping

The USDA says the global wheat outlook for 2024/25 is 790.7 million tonnes.

This is 7.4 million tonnes lower than the May estimates and the drop is due to less output in Russia, Ukraine, and the European Union but the estimates are still 3.2 million tonnes above 2023/24 levels.

Australia’s wheat exports for the 2023/24 season are likely to reach 20 million tonnes but dwindling stockpiles will limit any further upside potential.

Any supply side shocks or harvest-related disruptions could trigger price hikes as the market strives to balance export commitments with domestic needs.

To view the full analysis visit ruralbank.com.au

On Our Selection News 18 July 2024

This article appeared in On Our Selection News, 18 July 2024.

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