Australia agribusiness June 2025: What lies ahead as winter begins

Wheat and barley: May wheat markets were supported by solid crop conditions in the EU and US, with yields expected to exceed historical averages and global ending stocks revised upward. Still, global prices are facing headwinds, with a supply shock needed to change course.

Canola: Global canola markets remain stable despite dry weather in Europe. They are supported by strong yield forecasts and a US biofuel policy shift that could boost Canadian exports. If confirmed, the US policy changes could benefit Australian exports as well.

Beef: High cattle numbers pushed saleyard cattle prices lower, with southern saleyards recording record-high volumes through May. Rainfall in some regions across southern Australia and an expectation of lower numbers in the coming months should help stabilise cattle prices.

Sheepmeat: Lamb and mutton prices in May jumped to some of the highest levels seen in recent years. Slaughter numbers remain high, but the price spike may be an indication that supplies are about to become more limited.

Wool: Recent Australian dollar strength alongside disappointing export data likely played a key role in pushing EMI prices lower over the past month.

Cotton: Australian cash prices struggled to find momentum in May as a well-supplied global market kept prices below the AUD 600/bale mark.

Farm inputs: Urea prices declined sharply month-on-month in May as news of China’s return to the export market, following 18 months of limited exports, helped to somewhat ease market concerns of tightening global supplies.

Dairy: New season milk prices have been set and are higher than last year at around AUD 9.00/kgMS. This represents a 6% lift on final milk prices for 2024/25. Firmer commodity markets and a weaker Australian dollar versus last year have supported rising farmgate milk prices.

Consumer foods: Monthly food inflation came in at 3.1% in April. Supply shortages from the avian influenza outbreak have driven egg prices 18% higher on an annualised basis.

Interest rate and FX: The RBA cut rates in May by 0.25 percentage points and signalled further cuts to come. The dovish signal from the central bank and a weaker outlook for growth and inflation has prompted RaboResearch to update its cash rate forecast. We now project a 2.85% cash rate by February 2026.

Oil and freight: Crude oil prices rose in May, but OPEC+ has announced another big round of production increases that could cap further rallies in prices. A 90-day tariff reduction between the US and China could pressure container rates higher in the short term.