Agriculture in 2018 will be remembered for below-average rainfall, especially in the eastern states, high feed costs, record lamb and mutton prices and the smallest grain crop on the east coast in nearly a decade.
“Drought and drier conditions have affected large parts of the eastern seaboard,” said Simon Dundon, General Manager Sales and Distribution for Rural Bank.
“However, with improved seasonal conditions and continued strong export demand, farmers can expect more stability across agricultural markets.”
His bank’s agriculture report identifies several possible agribusiness trends for this year. These include:
1. Cattle prices strengthen due to reduced supply and strong export demand
2. Farmgate milk prices continue an upwards trajectory
3. Horticultural export value to rise
4. Lamb and mutton set new annual average records
• Reduced supply and continued strong export demand will support cattle prices in 2019 but seasonal conditions will be the major factor determining price trends.
• Supply is expected to be lower in 2019 with producers across the country looking to hold on to current herd size until seasonal conditions improve.
• China will continue to drive export demand, with the US, Japan and South Korea remaining big export players.
“Seasonal conditions will be the most significant factor to affect how cattle prices will perform in 2019. 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.” Mr Dundon said.
Commenting on the dairy industry Mr Dundon said “We are expecting an average farmgate milk price of $6.10/kg MS in southern dairy states this financial year.”
“Prices could even go beyond the average of $6.24/kg MS, last seen before the milk price drop in 2016.”