Australia agribusiness December 2024: Beef up the holidays

Wheat and barley: Global prices dropped as Russia’s export volume outweighs other countries and sets the price bar for another year. Internal pressures enhance its selling force in the market, and the recent use of unprecedented missiles against Ukraine did not spook the wheat market. Australian feed barley holds surprisingly well for such a large crop in 2024.

Canola: Volatile canola prices were experienced as profit-taking took over the market after hefty gains during the first half of November. The drop in prices is likely to be short-lived as market fundamentals have not changed, and different governments altered export and import duties to protect their markets from further rallies.

Dairy: There has been a shift in direction in China’s milk supply growth trajectory. With local farmgate milk prices near 10-year lows, this has triggered herd reductions and farm exits. RaboResearch estimates milk production to be down by more than 5% YOY in the second half of 2024.

Beef: Cattle prices continue to hold amid record production volumes and record exports. Some widespread rain in late October should continue to support producer demand, and lower global beef volumes may see some upside in global prices, but RaboResearch believes price movement will be minimal for the remainder of the year.

Sheepmeat: Finished lamb prices continue to hold as it appears that production volumes are declining. There has been a larger than average number of lambs sold through saleyards as restockers this year, but we are yet to be convinced that these are the numbers that would cause prices to fall when they hit the market.

Cotton: ICE #2 Cotton declined in early November before clawing back most losses. Mixed US export data partially explains the price volatility. Australian cash prices were spared some of the losses amid a falling Australian dollar.

Wool: Wool prices continue to rise with almost all microns recording positive month-on-month price movements. The market will be closely assessing how Chinese wool demand will be impacted by US trade policies.

Consumer foods: The Australian Bureau of Statistics’ monthly release of the consumer price index showed food and beverage inflation steady at 3.3% YOY in October. There is some relief for consumers, with the dairy aisle posting 1.8% deflation for the month as a lift in promotions and discounting flows through to checkouts.

Farm inputs: Urea prices declined month-on-month due to weak demand. Meanwhile, potash prices found support in some regions amid the suggestion that the US will impose a tariff on Canadian exports.

Interest rates and FX: RaboResearch has revised the 12-month Australian dollar forecast down to 0.6400 following Donald Trump’s election in the US, and three of Australia’s big four banks shifted their RBA cash rate forecast to match our prediction of a May cut.

Energy and freight: A ceasefire deal struck between Israel and Lebanon has reduced risk premia in energy markets, while bulk freight rates continue to move lower.

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Australia agribusiness Monthly December 2024

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Australia agribusiness monthly November 2024

Australia agribusiness Monthly October 2024

Australia Agribusiness Monthly September 2024

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Australia agribusiness December 2024: Beef up the holidays

Stefan Vogel

Angus Gidley-Baird

Ben Picton

Emma Higgins

Jen Corkran

Michael Harvey

Anna Drake

Pia Piggott

Vítor Caçula Pistóia

Paul Joules

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