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Insights October 2020 - All commodities

9 October 2020 |Insights
Farm equipment on field

Insights October 2020 - All commodities

9 October 2020 |Insights
Rural Bank’s Insights Update for October provides producers with a valuable overview of production and pricing trends and an outlook for Australian agriculture.

This month’s report covers cattle, cropping, dairy, horticulture, sheep and wool.

Cattle restocker demand is expected to remain steady for the rest of the year, based on the La Niña-driven wet outlook for eastern Australia which will support strong competition.

Forecasts for La Niña in the east could also affect broadacre farmers. The wet outlook has the potential for quality downgrades in cereals and pulses and as harvest starts to get underway, the crop forecast is still high at 44.7 million tonnes - a year-on-year increase of 49 per cent and 9 per cent above average production.

Dairy farmers will also have to manage wet conditions, although the news is mostly positive for milk supply and the cost of production.

For horticulture growers, the mango season is in full swing in the Northern Territory. Growers are facing challenges in sourcing labour and may need an additional 26,000 workers to harvest this summer. The number of backpackers available for harvest has reduced by up to 60 per cent due to COVID-19.

Easing restrictions on workforce capacity in Victorian meat processing facilities at the end of September should take some pressure off prices as the industry approaches its peak supply period. This will give producers greater confidence and certainty of operations and that the spring flush of lambs will be processed.

The wool market remains subdued internationally, although the Chinese economy is recovering faster than its European and American counterparts. Chinese demand continues to underpin Australian wool prices but further increases in price will depend on consumer confidence returning.

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