How does the lower Australian dollar impact farmers?

Is the current conversion rate ideal for Australian agriculture? As the Aussie dollar takes a tumble, here’s what farmers have to say.

Australia’s agricultural competitiveness has hit a currency conversion sweet spot, with the Aussie dollar taking a dive to start 2025 against the American greenback.

The kangaroo coin is at its lowest point against the American dollar in five years, recently trading as low as 61.84 US cents this week before clambering above 62 US cents.

The start to 2025 represents the weakest trading period for the Australian dollar since the first months of the coronavirus pandemic in April 2020, when it fell to a nadir of 61.85 US cents before bouncing back due to the JobKeeper federal stimulus package.

Victorian Farmers Federation president Brett Hosking said the dollar had been sliding for some time, boosting export competitiveness for most agricultural sectors.

“It’s good timing for a lot of ag — especially for grain growers. Crop is fresh out of the paddock and looking for new homes, looking for new markets,” he said.

“Even for domestic sales, it means international produce coming into Australia has to compete that little bit harder. Of course, if the dollar falls too low, then that can present problems for inputs, fertiliser and so on but it’s at a reasonable level right now.”

The Australian dollar has also softened against other leading currencies, with $A1 currently buying $NZ1.11, 50 British pence, 61 Euro cents and 89 Canadian cents.

VFF livestock president Scott Young said the lower Australian dollar bodes well for livestock exports heading into the new year.

“When you look at 2023 then 2024, they both weren’t great years overall for livestock prices but there has been bit of a turnaround in recent months, especially with lamb and mutton prices,” he said. “The Australian dollar softening will help with competitiveness on the world market, we’re already seeing signs of that.”

EastAUSmilk president Joe Bradley said the lower Australian dollar had undercut arguments from processors that Australian butter and cheese wasn’t competitive against imported dairy.

“We’ve heard from the factories for the past couple of years that they needed to keep the Aussie dairy farmgate low because of cheap imports. Now the dollar is low, the processors have been very quiet,” the Queensland dairy farmer said.

“They’re doing well with their profit margins, they don’t want to advertise the fact — farmers deserve their fair share.”