More growth for Aussie agriculture


Australian agriculture is forecast to doc its fourth yr of progress Based mostly on agricultural financial institutioning group Rabofinancial institution, with current chain factors, COVID-19 and inflation Amongst The numerous problems Inside the yr forward.

In its annual Agrienterprise Outlook report the financial institution said doc extreme agricultural commodity prices and yields put the Australian agriculture sector in A strong place for 2022.

“Australia’s second yr of good pricing and principally distinctive manufacturing circumstances in 2021 means the Australian agriculture enterprise is properly placeed to Deal with the problems of 2022,” the report said.

RaboResearch’s Dr Cheryl Kalisch Gordon said there Shall be some strain on farming margins Inside the yr forward As in contrast with the earlier yr, with some commodity prices anticipated to fall.

The senior commodities analyst said regardmuch less of a mixed manufacturing outlook and problems one other beneficial yr was anticipated for Australian agriculture.

Dr Kalisch Gordon Does not anticipate a repeat of the doc grain and oilseed harvest for the 21/22 season, although said slaughter numbers for cattle and sheep will enhance after some producers have reinventoryed.

Milk manufacturing was additionally forecast to rise, however solely Inside the second half of the yr Based mostly on the report, whereas 2022 cotton manufacturing was on monitor to proceed rising, with an 85 per cent enhance on final yr.

The report found native macro-financial settings stay supportive for Australian agriculture, with the Australian greenback anticipated to make solely modest positive elements over the yr.

Dr Kalisch Gordon said 2021 had been a “as quickly as in a blue moon” yr for Australia’s agricultural sector, with very strong prices ensuing from “hardship worldwidely”, whereas extreme prices coincided with beneficial manufacturing circumstances for Australia.

“There was A combination of drought and antagonistic climate in key cropping areas Throughout the globe, strong inventorypiling demand Inside the face of potential meals shortages Collectively with COVID-induced labour shortages which influenceed intensively-produced agri merchandise and transport,” she said.

While the outlook for 2022 May even be constructive, the financial institution anticipates the yr forward will convey “much less pronounced alternatives” for Australian agriculture.

“We start 2022 with the Australian meals current chain beneath unprecedented strain, current chain disruption and bottlenecks being felt across the board – from entry to enters On the farm diploma by way of to consumers entrying meals on Food market cabinets,” Dr Kalisch Gordon said.

The report found the influence on current chains Is predicted to linger by way of The primary quarter of the yr, whereas geopolitical tensions Can additionally play A process.

Dr Kalisch Gordon said the tight worldwide Market for agricultural commodities had shielded Australia from the influence of dropping China as a purchaser in 2021, however Australia might Want to work extra sturdy to diversify across the globe “as markets unwind.”

There’s additionally the potential for market fallout from current tensions between Russia and Ukraine, which might “ship exaggerated volatility in markets Starting from wwarmth by way of To grease and fertiliser”.

“We additionally anticipate A pair of of The warmth To return out Of prices for Pretty a few commodities in 2022 as currents are renewed worldwidely, inventory levels are enhanced and demand tempers,” she said.

COVID will proceed to influence the agricultural sector, as will “the pervasive problem of inflation, which proceeds on Definitely one of many steepest rises in 30 yrs”.

Completely different problems forward included nonethemuch less-extreme farm enter prices and ongoing labour shortages.

“Furtherextra, we anticipate there Shall be worldwide coverage tightening round financial stimulus measures Which have been in place Through the pandemic, which Shall be designed to common demand,” she said.


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