Australia Agribusiness June 2022: Heavy Inflation and Rate Hikes

Here are the main highlights for some of Australia’s key commodities. The full report provides an overview of the developments to watch in the upcoming weeks.


- Grains & Oilseeds: Low and falling stocks in 2022/23 are expected to keep global prices trading 100% higher than the five-year average with no sustained softening until mid-next year.

- Dairy: Global commodities are doing the heavy lifting for local milk prices, but markets have likely passed the peak. The global supply outlook remains somewhat unclear as costs on-farm rise and erode margins.

- Beef: East coast rains support cattle prices but with the forecast of a wet winter we may see easing producer demand in southern states.

- Sheepmeat: With relatively balanced markets we expect lamb prices to remain steady but not see a lot of upside in the traditionally stronger winter months.

- Cotton: Despite global price softening on the cards in H2 2022, and more so if the rain forecast for West Texas this week doesn't disappoint, we still expect AU cash prices trading above AUD 700/bale to the end of the year.

- Wool: Storm clouds gather on the horizon.

- Downstream Markets:With each passing day, consumers are becoming more acutely aware of the broader inflationary pressures across the global economy. This is impacting discretionary spending and we are seeing trading down.

- Farm Inputs: Global urea prices have fallen but we do not expect a sustained, or further, decline unless hostilities cease in Ukraine, something that is considered unlikely in coming months.

- FX/Interest Rates: Rabobank forecasts the AUD to rise further to 0.74/USD on a 12-month horizon. The average of the Official Cash Rate forecast of 30 bank analysts is 0.93% for Q4 2022 and 1.75% for Q4 2023, up from 0.35% in May 2022.

- Oil/Freight: Oil markets remain tight globally and a big potential price driver is the planned EU sanction banning imports of crude oil from Russia into the EU. Port congestion in Asia seems to have cleared up, but global bottleneck issues remain.

  • Stefan Vogel

    General Manager – RaboResearch Australia & New Zealand.
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  • Angus Gidley-Baird

    Senior Analyst – Animal Protein
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  • Michael Harvey

    Senior Analyst – Dairy & Consumer Foods
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  • Cheryl Kalisch Gordon

    Senior Commodities Analyst
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  • Emma Higgins

    Senior Analyst – Agriculture
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  • Genevieve Steven

    Analyst – Agriculture
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  • Dennis Voznesenski

    Analyst – Agriculture
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