Australia Agribusiness November 2022: Soft Consumer Demand Settings Set In

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.

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- Grains & Oilseeds: Prices expected to see significant volatility as markets await news on the future of Ukraine’s grain exports and the impact of domestic floods and rain on Australian crops.

- Dairy: Flooding is having a sizeable impact on the Northern Victoria dairying region. This will negatively impact milk supply at a time when national production numbers remain soft. Weather risks and their impacts on feed availability to Australian milk supply will continue into 2023.

- Beef: Seasons continue to support cattle prices and there is little to suggest this will change over the coming months despite margin squeeze down the supply chain as consumer demand softens.

- Sheepmeat: Lamb prices have lifted  from August lows, but with a larger volume of lambs expected in the market this year and softer US and China demand, we believe prices will be steady for the next month before easing at the end of the year.

- Cotton: ICE prices faced a lot of pressure amid rising inflation concerns and declining global consumption.

- Wool: Wool prices are expected to hold steady as consumer confidence rallies and exports continue to remain above 2021 levels.

- Downstream Markets: Food inflation reached a fresh 16-year high in the September quarter. Inflation was again evident across all channels and all categories. Some items such as milk and cooking oils posted record-high numbers. Consumers are warned that the food inflation story has some runway left.

- Farm Inputs: Can a new global prices configuration reach Oceania?

- FX/Interest Rates: With record-high inflation the RBA will have to continue hiking the cash rate into 2023 after having increased the official cash rate up in early November by 25 basis points.

- Oil/Freight: The bleak economic outlook continues to put pressure on oil and freight demand.

  • 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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