National boost, WA falls short
Higher cattle, lamb, dairy and cotton prices have driven a 1.1 per cent increase in the NAB Rural Commodities Index, offsetting a decline in grain prices.
Released on Tuesday, the NAB Rural Commodities Wrap highlighted stronger demand for cattle after recent rain and improved conditions in Queensland, with the Eastern Young Cattle Indicator now sitting at almost $5 a kilogram.
NAB agribusiness economist Phin Ziebell said more rain would likely drive elevated restocker demand, but seasonal conditions were an ongoing cause of volatility in cattle markets and while the Eastern Young Cattle Indicator had increased, the trajectory for the remainder of the year would be very sensitive to rainfall.
Mr Ziebell said dairy trade auction results continued to perform well, however high input costs remain the biggest concern.
“Cotton prices have risen slightly. Looking ahead we anticipate that low irrigation water availability will likely limit cotton plantings once again.”
Winter crop planting is now well under way across Australia, with mixed conditions.
Mr Ziebell said farm input costs continued to reinforce trends during the past few months, “reducing in line with domestic feed prices, which were down 4.1 per cent in April”.
“The overall NAB weighted feed grain index now sits at $318 a tonne,” he said.
“The latest outlook from the Bureau of Meteorology points to a wetter than average end to autumn and start to winter in the north-west and South Australia but a below average season in major agricultural areas in the east and west.”
Lamb prices continue to be strong, and mutton is at an highest, reflecting strong industry returns and overseas demand.
“This has been further supported by a hot wool market, although there are concerns as to whether wool can be sustained at this level, with the slowdown in global growth and consumer demand emerging as a risk for the industry,” Mr Ziebell said.
Fruit and vegetables fell in April from their strong performance in the first quarter of this year.
On a state-by-state basis, Queensland led in April gaining 4.4 per cent on higher cattle prices, followed by New South Wales, Tasmania and Victoria rising 2.6, 1.9 and 1.6 per cent respectively.
South Australia fell 1.1 per cent, and WA was the weakest performer, falling 2.2 per cent on lower grain prices.
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