Cattle prices to continue fall: mid-year outlook

Rural Bank’s Australian Agriculture Mid-Year Outlook has found favourable seasonal conditions and strong production over the first half of 2023 ensured strong winter crop establishment and pasture growth, particularly on the east coast.

Despite a positive start to the year, softening commodity prices are now impacting Australian farmers following several seasons of strong prices.

The mid-year outlook, released this week by Rural Bank, forecasts a continued fall for cattle prices in NSW as ongoing pressure from increasing supply on the market applies downwards pressure on pricing.

The outlook for the second half of 2023 indicates the price differential between fine and medium merino wool will close as finer wools record larger declines with medium wools already near historic lows with the Eastern Market Indicator (EMI) expected to remain below 1,350 cents.

2022/23 wool production in NSW is now in line with the previous season in terms of progressive gross weight and overall bales sold with volumes rebounding following NSW shearing delays.

Many sheep producers have retained older ewes and Merino lambs due to the drop in sheep meat prices which will keep wool supply elevated in the back half of the season.

“A higher Australian dollar is also expected to weigh on the competitiveness of Australian agricultural exports, but overall, we expect marginal impact with our dollar still sitting below historic averages,” Rural Bank Head of Agribusiness Development, Andrew Smith, said.

For wool growers, the next six months are expected to see Australian wool supply rise for the fourth consecutive year.