Australian agriculture expert’s predictions for 2021

Australian agriculture experienced a year like no other in 2020, so what does 2021 hold? Here’s what the experts have predicted for the year ahead in the industry.

Ag experts have weighed in on what they expect to see happen to the commodities in 2021.

THIS time last year, few could have predicted the events in store for 2020.

So, what can we expect from 2021?

Without a crystal ball, it’s impossible to predict what events, decisions or disasters could hit Australian agriculture in the new year.

So The Weekly Times has asked the experts for their ag forecast for 2021.

CATTLE

Cattle prices could ease in 2021 “once the strong restocked demand that underpinned prices in 2020 starts to soften”, according to Rural Bank agribusiness manager Donna Slevin.

“However, continued tight supply as herd rebuilding takes place will provide a level of underlying support for prices,” Ms Slevin said.

Rural Bank has forecast China will remain a key market for Australian beef, despite the trade tensions of 2020.

As China rebuilds its domestic pig herd following the African Swine Fever outbreak, demand for Australian beef may weaken.

OUTLOOK: Cattle prices could ease in the first six months of the year. But Chinese trade will remain important for cattle prices.

SHEEP AND LAMB

For sheep, the ongoing coronavirus pandemic, both in Australia and abroad, is the key.

Thomas Elders Markets analyst Matt Dalgleish said coronavirus wreaked more havoc on the sheep market than cattle in 2020.

“As we saw this year, lamb and sheep are more susceptible to COVID-19 disruptions than cattle,” Mr Dalgleish said.

Australian lamb production is forecast to lift in 2021, coming off the smallest national flock in 100 years, while international demand for sheepmeat will remain strong.

“The only thing that could disrupt the sheep market is COVID-19,” Mr Dalgleish said.

“Everything else is perfectly positioned for us. If we didn’t have coronavirus this year, we would have seen a huge price for the Eastern States Trade Lamb Indicator.”

OUTLOOK: Sheepmeat could have a successful 2021 with favourable weather conditions and strong demand, but coronavirus could disrupt the market for the second year running.

Union Dairy Company

DAIRY

A RuralBank report forecast a 3-4 per cent lift in milk production in 2020-21, with production to pass nine billion litres for the first time in three years.

And despite global dairy commodity prices remaining relatively stable throughout the year, the outlook for pricing in 2021 remains unclear.

Dairy Australia analyst Sofia Omstedt said while there were risks to the global market, “an abundance of high-quality grain and hay at attractive prices, plus a continuation of good pasture growth remain the most likely drivers of a lift in milk production this season.”

OUTLOOK: Australian production is set to increase, but global volatility has made it difficult to predict what could happen in the dairy industry in 2021.

NEWS: Wheat Harvest Worker Nick Symon

GRAINS

Improved seasonal conditions across the country is forecast to lead to a bumper 28 million tonne wheat crop in 2020-21, am 84 per cent increase on last season.

Thomas Elders Markets analyst Andrew Whitelaw said a La Nina forecast for summer would provide moisture, to be stored as subsoil moisture for crops.

“This La Nina can also cause problems overseas which can assist in increasing our prices,” Mr Whitelaw said.

“The other thing is the political situation (with) China and whether further hassles come forward or whether the World Trade Organisation thing helps. 2021 may be a mystery but we are at least starting well.”

OUTLOOK: Grain prices could be affected by a wet summer, but trade tensions could create uncertainty in the market.

Melbourne wool sale October 25 generic

WOOL

Despite recent tensions between Canberra and Beijing, China is forecast to remain a key market for Australian wool in 2021.

But COVID-19 remains a factor for future disturbances to the wool industry, as vast swathes of Europe and North America are still grappling with the virus.

Rural Bank regional manager agribusiness Mark Pain said a number of factors would affect the wool industry in the first six months of the year.

“Improved seasonal conditions will aid flock rebuilding and drive increased supply, which will place some pressure on wool prices. This is expected to be offset by slow improvements in demand which could lead to a steady recovery in prices in the first half of 2021.”

OUTLOOK: Australian wool supply is forecast to lift next year, but will still remain below average, while an ideal season could see sheep numbers rebuild from record lows.

WINE

The wine industry is readying itself for harvest time, due to kick off in February.

But all eyes are on China, after the Chinese Government slapped tariffs of 212 per cent on bottled Australian wine in recent months.

Many producers fear red wine prices could be depressed in 2021, if tensions between China and Australia result in product destined for China offloaded domestically at dramatically reduced prices.

OUTLOOK: Red wine could be affected by trade with China, with potential for cheaper prices in Australia.

FRUIT AND VEGETABLES

With an estimated shortage of 26,000 seasonal workers to harvest fruit and vegetable crops due to the impact of coronavirus, harvesting crops this season could prove tricky.

Despite that, producers are gearing up for a forecasted bumper season off the back of improved growing conditions across the country.

Rural Bank agribusiness manager John Reilly said the lack of seasonal workers to pick fruit and vegetable was a worry heading into harvest time.

“Export demand remains more difficult to predict due to various logistical challenges, though government assistance should see high value exports remain viable for producers,” Mr Reilly said.

OUTLOOK: Almond, macadamia and walnut production are forecast to reach record highs in 2020-21, while demand for immune boosting fruit and vegetables has lifted following the COVID-19 outbreak.

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