Victorian commodity prices, exports make records

Records are being set across farming commodities, whether it be prices or exports. But one factor is keeping a lid on optimism.

Record export volumes and buoyant commodity prices are injecting cautious optimism into Australian agriculture, even as producers grapple with an unpredictable season.

Experts say an anticipated drop in interest rates will further bolster confidence, though farm profitability remains highly exposed to volatile factors, including climate risks and global market dynamics.

Key sectors such as lamb, hay and grain are outperforming expectations. Sheep producers are enjoying surging prices, with a record $435 a head paid for a pen of lambs at Bendigo saleyards on Monday. Across all lamb categories, prices are about 300c/kg carcass weight higher than this time last year.

Dookie sheep producer Dale Wood said lamb producers benefiting from strong winter prices had earned the returns after grappling with such a challenging season.

Dale Wood, a first cross producer from Dookie says returns will be determined by the season.

But he said any optimism generated by the record price run was tempered by the grind of hand-feeding sheep each day.

“Everyone hopes for a good spring, and when it gets warmer, that we’ve had enough rain for feed to grow,” Mr Wood said.

Beef exports are also setting new benchmarks. June shipments reached almost 135,000 tonnes — the highest monthly volume on record.

Meat and Livestock Australia global market analyst Tim Jackson said total beef exports for the first half of the year exceeded 702,000 tonnes — a record for the period.

“Australian beef is in greater demand due to lower supply from competing beef export nations and significant international regard for the quality of Australian product,” Mr Jackson said.

“With weekly slaughter numbers remaining robust and carcass weights above long-term averages, exports will likely remain strong in coming months.”

StoneX Australia livestock and commodities manager Ripley Atkinson said beef exports would continue to rise in the next six months. He predicts monthly volume records will be broken “at least twice”.

“This year’s beef exports are on track to surpass 1.5 million tonnes, beating the previous record set in 2024 by 170,000 metric tonnes at least,” Mr Atkinson said.

The strength of exports should start to play out in prices for young cattle and breeding females, he said, especially in southern markets if the season improved.

“Spring time is where these markets should see the most pressure as grass production ramps up,” he said.

“The risk is the weather turning dry, which will then put the spotlight on the ability of the feedlots and subsequently processors particularly to handle higher numbers of stock if they have to move quickly due to dry conditions.”

South Gippsland beef producer Peter Miller said the future of the beef industry was strong, and he hoped record export volumes would soon translate into higher prices.

However, he said much would depend on a good spring, which would give producers the confidence to compete more strongly against processors.

“We need that producer competition to put prices up, because there is only a limited number of processors competing against each other,” Mr Miller said.

“We need the farmers to push the price along and that will only happen if there is feed.”

But he is still feeling optimistic about the prospects for the industry.

“I’d really like to think the outlook for the industry is a glass three quarters full, rather than half full,” Mr Miller said.

“Everyone (global demand) seems to want our beef and processors are going flat out.”

Cropping fortunes will also hang on the season, but Bendigo Bank agribusiness senior manager of industry affairs Neil Burgess said a late break had boosted morale.

“Early cropping forecasts have winter production down 9 per cent from last season to 54.5 million tonnes, but a late break across southern Australia has lifted confidence and added upside potential,” Mr Burgess said.

The cropping sector has benefited from a late break but it is not out of the woods yet.

“Export demand has been very strong for canola, barley and chickpeas, with ending stocks predicted to be at multi-year lows.”

But Mr Burgess warned of the impact of uncertainty in the global trade environment.

“The recent apparent de-escalation in trade tensions between the United States and China is easing concerns slightly, but any sustained agreement appears to be a long way off,” he said.

This in turn may improve the likelihood of a trade deal between Australia and the EU, he said, with flow on benefits for increased exports of Australian beef and lamb.

In its Australian Agriculture mid-year outlook released this week, Bendigo Bank painted a positive picture for beef, horticulture and sheep, while wool prices should stay at current levels but only due to a reduction in supply.

Yet the report noted that there was low confidence in dairying, with “producers seeking support to manage the contraction of the industry”.

Recent step ups in milk prices had been welcomed, but Dixie dairy farmer Brad Collins said these were tempered by the cost and difficulty in finding feed.

“The seasonal conditions are overriding any real optimism in the lift in prices,” Mr Collins said.

“People have spent so much on feed — we have ourselves spent $200,000 more than we usually would and yes, the prices have increased, but you don’t get all that straight away.

“Everyone needs to talk to their creditors and tell them there is light at the end of the tunnel.”

Mr Collins said a soft winter and a good spring would allow the better milk prices flow through to sentiment.

“The rise in milk prices is great and we would all like a little more, but what would be really great is that good season,” he said.