Aus­tralian Agri­cul­ture Out­look 2019 tips a pos­i­tive year ahead

Warwick Daily News - South West Queensland Rural Weekly - - Column - Kir­rily Car­berry [email protected]­ral­weekly.com

AUS­TRALIAN agri­cul­ture is set for a bumper year with fore­casts pre­dict­ing cat­tle prices to strengthen, far­m­gate milk prices to push up­wards and lamb and mut­ton to set new an­nual av­er­age records.

That’s ac­cord­ing to Ru­ral Bank’s Aus­tralian Agri­cul­ture Out­look 2019 re­leased to­day.

Fol­low­ing a year of below av­er­age rain­fall, high feed costs and the small­est grain crop on the east coast in nearly a decade, Ru­ral Bank says the year ahead will be one where “pro­duc­tion and prices de­pend heav­ily on rain­fall”, par­tic­u­larly the cat­tle mar­ket.

“Sea­sonal con­di­tions will be the most sig­nif­i­cant fac­tor to af­fect how cat­tle prices will per­form in 2019,” Ru­ral Bank’s gen­eral man­ager sales and dis­tri­bu­tion Si­mon Dun­don said.

“Dry con­di­tions could see prices con­tinue to ease to below 500c/kg whereas sig­nif­i­cant rain­fall would see a re­turn to herd-re­build­ing ac­tiv­ity, with the po­ten­tial to reach 600c/kg.”

Lamb and mut­ton prices are fore­cast to con­tinue their ex­cep­tional run into the new year due to tight sup­ply and a strong ex­port de­mand, with lamb prices to av­er­age higher for the sev­enth con­sec­u­tive year.

The East­ern State Trade Lamb In­di­ca­tor is ex­pected to sit above 700c/kg for much of the year, while mut­ton prices are pre­dicted to reg­u­larly ex­ceed 500c/kg, ac­cord­ing to the re­port.

“Aus­tralian sheep meat will con­tinue to be sought af­ter in the in­ter­na­tional mar­ket as con­sump­tion across the US, China and Mid­dle East rises, with prices fore­cast to set new an­nual av­er­age records.”

China will also help drive high prices for Aus­tralian wool, par­tic­u­larly the sports­wear mar­ket.

Ru­ral Bank es­ti­mated

6–10% less wool would be pro­duced in 2018-19 com­pared with the pre­vi­ous year.

“De­mand for Aus­tralian wool is strong, par­tic­u­larly in the global mar­ket as New Zealand’s sheep flock con­tin­ues a decade-long de­cline. The mar­ket fun­da­men­tals that pushed wool prices up over the past three years are ex­pected to re­main at a sim­i­lar level in

2019,” Mr Dun­don said. Milk sup­ply is down four per cent due to dry sea­sonal con­di­tions and high in­put prices, with Ru­ral Bank fore­cast­ing pro­duc­tion to fin­ish at nine bil­lion litres.

De­mand for dairy ex­ports is ex­pected to re­main sta­ble, ac­cord­ing to the re­port, how­ever “vol­ume and value could be lower due to fall­ing milk pro­duc­tion in Aus­tralia”.

Far­m­gate milk prices are ex­pected to av­er­age $6.10/kg MS in south­ern dairy states, how­ever prices could edge higher with lower milk sup­ply.

“Prices could even go be­yond the av­er­age of

$6.24/kg MS, last seen be­fore the milk price drop in

2016,” Mr Dun­don said. The value of hor­ti­cul­tural ex­ports will con­tinue to grow in 2019, with fruit to in­crease by 10%, nuts by 5% and ta­ble grapes by 3%.

This is be­ing driven by de­mand for cit­rus, stone fruit and cher­ries from China and Hong Kong.

The grow­ing mar­ket for al­mond milk is also ex­pected to boost de­mand for al­monds, while ta­ble grape pro­duc­tion is ex­pected to in­crease by 18% with strong de­mand from China and Ja­pan.

Do­mes­tic feed mar­kets will be the key driver of grain val­ues in 2019, ac­cord­ing to Ru­ral Bank.

The re­port says a re­turn to “av­er­age con­di­tions” could see an Aus­tralian wheat crop of 24 mil­lion tonnes – a 50% in­crease on 2018, but 5% below the five-year av­er­age.

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