Australian cattle prices will ease in the first half of 2025 due to high levels of supply, according to Rural Bank’s 2025 Agricultural Outlook Report, released on Tuesday.
However, the report indicated that overall, the lift in beef production and continuing strong export demand provided a positive outlook for producers, even with softer pricing.
Further farmers are expected to encounter a more positive first half of 2025 amidst a generally favourable rainfall outlook and improving demand prospects, though a volatile geopolitical environment remains a concern for the industry.
In other news a slight easing of ocean freight rates would provide a small boost to exporters amidst a rise in new vessel capacity and lower fuel costs.
Rural Bank Senior Manager Industry Affairs, Neil Burgess said the combination of stronger than expected production estimates, relatively steady commodity prices and global economic growth were providing a more positive outlook for Australian agriculture over the next six months.
“An initially lower Australian dollar will maintain export competitiveness across key agricultural sectors as we head into 2025 and provide a further boost for the economy, but while trade conditions are expected to remain generally favourable, volatility across markets more broadly remains a concern," he said.
“Australian beef production is set to rise in the first half of 2025 following elevated destocking rates with demand set to remain firm as the US reduction in supply favours Australian producers.
"Cattle prices will ease marginally across the first half of 2025 due to high levels of supply, but overall, the lift in beef production and continuing strong export demand provides a positive outlook for producers, even with softer pricing.
“Demand for Australian lamb is expected to be firm through the first half of 2025. Tighter supply, as well as improved domestic economic conditions and demand from major export markets are expected to keep prices sitting above five-year average levels, albeit steady to marginally lower through the first half of 2025."
Mr Burgess said Australia’s wheat production for the 2024/25 season is forecast at 31.2 million tonnes, up 19 per cent from last season, with barley production set to rise five per cent to 11.1 million tonnes, with a tight supply scenario expected to keep Chinese demand for Australian barley strong, providing support for prices.
"On the domestic front, feed grain demand is expected to remain strong over the next six months, This is particularly the case for grazing regions in Victoria and South Australia with dry conditions limiting pasture growth – not withstanding the recent rainfall events. The Australian feedlot sector, which has grown by 24 per cent over the past five years, continues to show strength despite a slight slowdown this quarter,” he said.
The report indicated that the Australian wool industry was expected to remain in a holding pattern until economic conditions allow consumer demand to increase while above average production combined with ongoing volatility in the global grains sector will create marketing opportunities over the next six months
QUEENSLAND
Queensland’s cattle industry is set to experience a big start to 2025. With the recent rainfall, producers may defy the expected broader trend of destocking as the availability of feed encourages restocker demand. If this scenario does eventuate, prices in the state could marginally lift, however the well above average levels of cattle available on the market is more likely to push prices downward. The forecast conditions also appear favourable for producers, with most of the state expected to receive median rainfall or higher. Slaughter rates are forecast to increase throughout the first half of next year, with strong local supply on markets.
NEW SOUTH WALES
The New South Wales cattle industry is likely to experience a strong start to 2025, with local markets expected to be bolstered as producers transition to a destocking phase following multiple years of restocking. The recent seasonal outlook shows seasonal conditions are expected to be drier, supporting the notion that producers could be leaning more towards destocking rather than restocking. If this scenario does eventuate, the states prices are likely to move marginally lower, as the increase in stock on local markets will not match the demand from buyers. However, should big Queensland producers move south to buy stock and export demand remains at current extremely high levels, this could provide support for prices going forward. Slaughter rates are forecast to elevate as the strong export demand entices processing centres to continue purchasing large volumes of stock in the first half of next year.
Lamb prices in New South Wales are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024. Supply will be lower following dry conditions in key producing areas in southeast Australia during the first half of 2024, as well the increased turn-off of breeding stock following the flock rebuild between 2020 and 2023. Consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity will also support prices.
VICTORIA
Victoria’s cattle industry, much like its northern counterpart NSW, is likely to see a bolstering of supply on local markets throughout the first half of next year. Conditions are forecast to be average to above average, however the current destocking phase the industry is leaning toward is still likely to entice producers to sell, rather than purchase higher volumes of cattle. This trend is expected to apply marginal downwards pressure on prices. Strong export demand from key countries such as the US, along with firm processing centre demand for stock will support prices moving into the first half of 2025. Slaughter rates are also forecast to move marginally higher from the already high levels in 2024 as international demand boosts export opportunities.
Victorian lamb prices are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024. Lamb supply will be lower following dry conditions in key producing areas during the first half of 2024 and due to the increased turn-off of breeding stock seen over the last 24 months. Consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity will also support prices.
TASMANIA
Tasmania’s cattle industry is set to experience a steady commencement to 2025. Prices are forecast to marginally ease throughout the first half of 2025, as the dry weather conditions encourage producers to sell stock rather than restock. However, the firm export demand will provide support for prices. Slaughter remains above average and is likely to increase modestly due to the increase in cattle available on local markets for processing centres to purchase.
Tasmanian lamb prices are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024. Supply will be lower following dry conditions in key producing areas during the first half of 2024, as well the increased turn-off of breeding stock. Consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity across the country will also support prices.
SOUTH AUSTRALIA
South Australia’s cattle forecast is for prices to record a downwards shift. The lower forecast comes on the back of an expected lift in cattle availability on local markets. The average weather forecast is more likely to translate into a continuation of the destocking trend across the state, leaving more supply and similar or less demand, which in turn will move prices lower. Slaughter has been strong in 2024 and with firm export demand, this will continue in 2025.
South Australian lamb prices are expected to be steady to marginally lower in 2025 but should remain above the five-year average. Supply is expected to increase from the levels seen over the past six months but will not be as strong as the first half of 2024.
Supply will be lower following dry conditions in key producing areas during the first half of 2024, as well the increased turn-off of breeding stock following the flock rebuild and to manage feed availability. Consumer demand has improved both domestically and from some of Australia’s major export markets, while improved processing capacity across the country will also support prices.
WESTERN AUSTRALIA
Western Australia’s cattle industry is expected to follow similar trends to the eastern states, as the increased supply following the herd rebuild over the past few years applies downward pressure on prices. Export demand will remain strong and will limit significant falls in prices.
Western Australian lamb markets are expected to be steady to marginally lower in 2025. Supply is expected to increase from the levels seen over the past six months but are not expected to be as strong as the first half of 2024. Consumer demand has improved both domestically and from some of our major export markets, while improved processing capacity across the country will also support prices. Grower confidence has been impacted by the phase out of live sheep exports, which is expected to see more growers shift away from the industry.