Australia Agribusiness Outlook 2019

For Australian agriculture, 2019 is likely to be characterised by stiffening headwinds and concern for significant downside risks. On a secular basis (i.e. putting cycles to the side), the industry remains on a strong path. However, many cyclical and short-term climate factors are less favourable for Australian agriculture as we enter 2019, with tailwinds softening and some headwinds arising.

picture of australian F&A sectors

Listen to the podcast

“What concerns us most in 2019,” says Tim Hunt, Head of RaboResearch Australia/New Zealand, “is not so much the most likely path for the world – which is less favourable than 2018, but not bad – but the rising risk that something much worse may happen. The slowdown in the Chinese economy for example, Brexit, the potential for the trade war between the US and China to worsen or the anti-dumping investigation by China into Australian barley exports.”

But despite a tough year for many in 2018, Australian farmers start 2019 with high viability levels. Producers have generally become more adept at managing drought and positioning their businesses to be able to ride them out. A tough 2018 was also preceded for many producers by several good years, so equity buffers were built. 

If we see a return to something approaching average rainfall in 2019, our base case suggests that 2019 will bring a decent year for Australian agriculture – with improved production conditions offsetting what we expect will be somewhat less favourable market conditions. Also, a weak and falling currency, combined with strong local price basis, is ensuring exceptionally high AUD prices for many key agricultural commodities.

But Australian agriculture would do well to consider the downside market risks addressed above when planning for the next season.

  • Tim Hunt

    Head of RaboResearch Food & Agribusiness - Australia & New Zealand
    Read more
  • Angus Gidley-Baird

    Senior Analyst - Animal Protein
    Read more
  • Michael Harvey

    Senior Analyst - Dairy
    Read more
  • Cheryl Kalisch Gordon

    Senior Analyst - Grains & Oilseeds
    Read more
  • Wesley Lefroy

    Analyst - Agriculture
    Read more
  • Emma Higgins

    Senior Analyst - Dairy
    Read more
  • Blake Holgate

    Analyst - Animal Protein, Sustainability
    Read more
  • Hayden Higgins

    Senior Analyst - Horticulture, Wine
    Read more