Good outlook for farmers despite lower commodity prices

Liv Casben |

Australian beef production is expected to rise later this year after a period of herd rebuilding.
Australian beef production is expected to rise later this year after a period of herd rebuilding.

Improved export conditions for Australian farmers are being dampened by lower commodity prices and drier conditions in some parts of the country.

Rural Bank analysed six industries – cattle, cropping, dairy, horticulture, sheep and wool – and found producers were well-positioned following a good start to the year.

The bank’s head of agribusiness development, Andrew Smith, said the outlook for farmers was broadly good.

“We are seeing some positive signs across all six industries, but it is a mixed bag, with increased supply for some sectors while there is easing demand for some Australian commodities,” he told AAP.

“Most of the commodity groups have seen a reduction in prices over the last six months, particularly across the beef and dairy market, but we are seeing some positive signs with regard to access into some diversified countries.”

Strong avocado production was anticipated across Queensland, while below-average rainfall was expected to have an impact on Western Australia’s cropping regions.

Most regions have had a strong start to planting, but winter crop production is expected to fall 34 per cent from last season’s record.

The bank predicted trade conditions would continue to improve for Australian producers, including through a recent agreement with India.

Lentil exports are expected to exceed one million tonnes, with the subcontinent the prime destination.

“We think that an opportunity in India is really strong,” Mr Smith said.

Agriculture Minister Murray Watt led an Australian delegation to India this week to promote trade ties in high-level meetings.

During the first six months of the India trade deal, Australian businesses benefited from lower tariffs on more than $12 billion worth of exports.

Australian beef production is expected to rise in the second half of the year following two seasons of herd rebuilding.

Lamb producers are tipped to have a record year for export volumes, but that might not translate into record export values.

Rising supply and strong export demand for horticulture will likely drive record production despite a slight easing of prices.