Home > Main agricultural sector predictions for 2012 summarised in Rabobank's Australian Agriculture in Focus report

Main agricultural sector predictions for 2012 summarised in Rabobank's Australian Agriculture in Focus report

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Rabobank ’s keynote annual Australian Agriculture in Focus 2012 report indicates that 2012 will see considerable uncertainty in agricultural markets, due to heightened geopolitical and macroeconomic risks that are likely to exert a strong influence on the food and agribusiness sector.

Looking at the main agricultural sectors, the Rabobank Australian Agriculture in Focus report found:

Beef

  • the price of Australian cattle is expected to rise modestly in 2012
  • cattle prices will be supported by any easing in the Australian dollar  
  • following major decline in US herds global beef production is expected to fall
Sheepmeat
  • Australian supply and New Zealand production will both increase  
  • a decline in sheep and lamb prices is likely in 2012 but, assuming there is no return to drought conditions, they will remain elevated
Dairy
  • the outlook is positive for producers’ profitability. The global market should continue to support high farmgate prices and there is a good supply of inexpensive feed, high water allocation and pasture growth
  • the outlook for the fresh milk sector remains subdued due to ongoing retailer discounting and a need to balance local market requirements is effecting price signals and overall sentiment.
Wool
  • prices are expected to find support above five-year averages
  • a downside risk is posed by Macroeconomic uncertainty in the main wool-consuming countries
Grains
  • until the northern hemisphere crop emerges from its winter dormancy grain markets will remain uncertain
  • domestic wheat values will have difficulty rallying sue to the low quality of wheat produced and ample global supply
  • the quarter 1 to 3 period is likely to experience sideways trade in the wheat markets
Cotton 
  • the global macroeconomic slowdown continues to pressure cotton prices
  • Australian cotton production is forecast to reach 4.73 million bales in 2011/12
Sugar
  • strong cane plantings in 2011 look set to give the Australian industry a recovery in 2012  
  • sugar prices are expected to remain firm in 2012, at an average of AUD 510/tonne or USD 23.5c/lb
Farm inputs
  • the boost in demand for farm inputs that underpinned prices throughout 2011 will continue to do so throughout 2012
  • seasonal demand conditions in key regions and the Chinese government’s export policy will be significant drivers of the future price direction
Food retail
  • the use of information technology will increasingly determine the success of suppliers and retailers
  • suppliers are being driven to refocus on cost rationalisation and product positioning by changing grocery retail dynamics
Wine
  • the market for significant increases in production will stay soft in 2012, but tighter supply fundamentals are encouraging

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