Aussie farming: from tariffs to turbulent weather

The winter months are always a time for reflection across Australian agriculture, as crops grow across the country, livestock producers prepare for the spring flush and generally production comes off the previous months’ highs.

“Initial concerns that Australian producers would bear the impact of the 10 per cent tariff appear unfounded with exporters reporting those costs being born by the US consumer.”

With a global economy and trading system subject to ongoing volatility, at home we have large parts of the south-east struggling with dry conditions, clean-up from the Western Queensland floods, and most recently the devastating flooding in coastal New South Wales - a lot for producers to consider.

Tariff concerns

Commodity prices remain solid, if not stellar.  Wool and cotton remain the outliers, with the hope that a late autumn, or early winter break may help increase the volume side of the equation.

Global trade tensions remain a central focus in discussions about the future of agriculture, although to date, the impact appears minimal, or even positive for some of Australia’s agriculture industry.

Initial concerns that Australian producers would bear the impact of the 10 per cent tariff appear unfounded, with exporters reporting those costs being born by the US consumer. And while a tit-for-tat continues to play out between many of the major global trading nations, Australian exports continue to be in strong demand.

Rebuilding northern cattle herds

Weather issues are often front of mind for producers. This year, it’s a tale of two halves, with the north and west of the country benefitting from a strong season and surplus of rain – while the south-east has, in some areas, been through one of the driest starts to the year on record.

In the absence of a decent autumn break in the south, cattle yardings have jumped as producers reduce stock numbers, while lamb prices are also reflecting a lack of pasture for fattening.

Balancing out this jump in turn-off, particularly for cattle, is the increasing demand for cattle from northern and western Australia. Areas of northern Australia are rebuilding herds following flooding, and also buying stock for the flush of pasture, providing welcome support for lighter stock coming out of the south.

Global grain prices under pressure

Across the cropping regions, the outlook is also mixed. Plantings in the south have moved away from canola and towards lower cost and lower risk cereal plantings. In the north and west, early rains have supported early plantings with reports of good establishments. While global grains prices remain under pressure as a result of strong global supply, many producers in the south will be anxiously awaiting rain to support volumes.

Concerns over global growth

Dairy producers are eagerly anticipating opening prices, the gradually firming global prices are supporting the case for higher farm-gate prices, with the key question of whether processors will break through the magical mark of $9/kg. On the flip side, fibre producers in wool and cotton are faced with subdued prices amid continuing concerns over global growth.

The season ahead

There’s a lot going on given at face value on aggregate, things look quite steady. Let’s hope that come the spring, more of our producers are in the hunt for a ‘close to average or better’ season in the 2025 calendar year.

Mark Bennett is Head of Agribusiness, Australian Commercial at ANZ

Further insights can be found in the 2025 winter edition of ANZ’s Agri InFocus Commodity Insights report.

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