Australia Agribusiness May 2023: Finally, Markets Are Levelling Out

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


- Grains & Oilseeds: Assuming there are no disruptions to Ukrainian supplies, dry conditions improve in the US and Canada, and Brazil has no issue with its second corn crop, global grain prices are expected to be flat to down… but those are a lot of assumptions and markets may be becoming complacent.

- Dairy: Rabobank is forecasting a range of AUD 8.50 to 9.00/kgMS for new season milk prices across Southern Australia. The cyclical downturn in global markets will have a dampening effect on farm-gate prices in 2023/24, but will be buffered by a weak Australian dollar and strong local markets.

- Beef: After the dramatic drop, cattle prices have levelled out and the market has returned to a degree of normality. Margins down the supply chain are improving and cattle numbers are increasing. We believe that this should steady the market for the next couple of months.

- Sheepmeat: There are not many bright spots for the sheepmeat market in the coming month. Increasing volumes, weaker producer demand, weaker consumer markets, and increasing global competition all create headwinds for Australian lamb and sheep prices. 

- Cotton: A bearish outlook is holding prices at their current level as high ending stocks and reduced global trade continues to keep spinners active around the USc 80/lb mark. Global consumption forecasts stabilised in April, providing positive signs for increases toward the end of the year.

- Wool: Wool prices dipped throughout April before a late rally to close out the month. Exports softened after a strong start to the year, but positive demand trends from key markets continue to provide promise.

- Consumer Foods: Australia’s markets have seen the peak in food inflation, but the cost of the food basket is still elevated. There is some relief for consumers in fresh produce and meat, but dairy, cereals, cooking oils, and packaged food remain a headache for Aussie households.

- Farm Inputs: Several factors are influencing the fertiliser market, from raw material and energy prices to politics and demand. The urea price gained momentum during April as demand wakes up with the Northern Hemisphere spring, while phosphate and potash prices are more sticky.

- Interest Rates and FX: The RBA delivered a surprise 25bps hike on May 2nd to take the cash rate to 3.85%. Interest rate and FX markets will take further direction from the federal budget handed down on 9 May, as well as from April retail sales and labour market figures to be published on 18 and 26 May, respectively.

- Energy and Freight: Crude oil and diesel prices both dipped at the end of April. We expect this trend to continue in May as weaker global growth weighs on demand and higher refining capacity utilisation makes diesel more readily available.

  • Stefan Vogel

    General Manager – RaboResearch Australia & New Zealand
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  • Emma Higgins

    Senior Analyst – Agriculture
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  • Genevieve Steven

    Analyst – Agriculture
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  • Angus Gidley-Baird

    Senior Analyst – Animal Protein
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  • Dennis Voznesenski

    Analyst – Agriculture
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  • Pia Piggott

    Analyst – Associate Analyst
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  • Michael Harvey

    Senior Analyst – Dairy & Consumer Foods
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  • Vítor Caçula Pistóia

    Analyst – Farm Inputs
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  • Edward McGeoch

    Associate Analyst – Agri Commodities
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