Australia agribusiness outlook 2026: High ground in a volatile world

Australian agribusinesses remain well positioned amid geopolitical uncertainty. They are expected to navigate 2026 much as they did in 2025. Agri exports should continue their strong performance, while domestic consumer confidence faces renewed pressure due to limited interest‑rate cuts. Livestock product prices are forecast to hold up well, whereas grain prices are likely to stay subdued given abundant global supply and growing inventories.

Major agricultural sectors enter 2026 from a position of strength. The recently harvested grain crop was the second largest on record around 10% above last year's and meat exports, including beef and sheep meat, remain resilient despite geopolitical tensions and tariffs.

The RaboResearch Australia Commodity Price Index is forecast to remain near its strong five‑year average. Agri commodity prices are forecast to diverge in 2026. Prices for grains, oilseeds, pulses, cotton and sugar face continued pressure, while meat and wool are expected to perform well.

Soil moisture remains insufficient across much of the country except northern Australia making timely rainfall critical for grain planting and pasture growth in those drier areas of the country. The Bureau of Meteorology's outlook through May calls for near- to below-normal rains, except for in the north.

Fertiliser and crop protection prices are expected to remain rangebound but elevated. While still above pre‑Covid 19 levels, prices may be contained by tight global grain production margins that slightly reduce demand. However, geopolitical developments continue to pose upside risks.

Energy markets look oversupplied, but diesel costs are expected to remain elevated. Crude oil prices may trade below USD 60/bbl in 2026, although geopolitical risk remains a major wild card. Diesel is expected to stay comparatively expensive both globally and in Australia, which relies heavily on imports.

Interest rate cuts appear less likely, with markets even pricing in possible increases. Sticky inflation remains a challenge and has limited prospects for further RBA rate reductions. RaboResearch still sees the chance of one more rate cut, but many other analysts and the market call for potential rate hikes.

The global economic outlook for 2026 is somewhat subdued, with GDP growth slowing in the US, China and the eurozone compared with last year's. Australia may be an exception, with RaboResearch forecasting a modest improvement to 2.3% in 2026 (up from 1.9% in 2025). The Australian dollar has recently strengthened and is expected to stay stronger in 2026 than last year, supporting import purchasing power but softening export returns in Australian dollar terms.

Geopolitics and shipping remain major areas of concern. With US President Trump not slowing down entering the second year of his second term, further geopolitical surprises are likely. Commodity markets from energy to fertilisers to agri goods may feel the effects. Australia benefitted from strong US demand for beef in 2025 despite tariffs, but with most tariffs now removed, South American competition in the US market may intensify. Meanwhile, China's newly introduced beef import quotas present additional challenges for Australian and Brazilian exporters. Tariffs continue to be used actively by key trading partners, even as some trade agreements progress most notably the EU‑Mercosur deal while others, such as the EU‑Australia Free Trade Agreement, remain distant. Military actions and threats, including Russia's ongoing war in Ukraine and new US military signals, add further uncertainty.