Primary producers are benefiting from high in-market prices for export goods, which are being fed back to producers through elevated returns at the farm or orchard gate level.
Meanwhile, optimism is starting to creep back into the sheep and beef sector. Lamb returns have held at exceptionally high levels throughout the season, while those for beef have been steady. Beef returns have benefited from the emergence of China as a strong alternative market, reducing the industry’s reliance on the United States.
Horticultural markets remain robust.A record harvest of apples and kiwifruit is expected. However, wine growers are not having such a great season, with indications to date that yields are well below expectations.
While commodity returns are generally strong at present, this is occurring against a backdrop of slowing global economic activity. This poses a key risk for our agriculture and horticulture sectors due to our very high exposure to export markets.
The wellbeing of China’s economy, in particular, is a key risk given that market directly accounts for 24% of our exports. We also have further indirect exposure to this market as many of our other export partners, such as Australia, are also highly exposed to China. But for now demand from China is showing no signs of letting up.
Read or download the full report here