Combine-Harvester
Wheat prices were up 1.9% in April. Image – Canva.
  • The index was off 0.7% in March, but ticked up 2.3% in April
  • Commodity prices stay strong, amid rising Aussie dollar
  • Cattle prices cracked 900c/kg and dairy prices levelled off

As iron ore and gold prices affect huge swathes of Australian resources and related industries – including property – so the state of the rural agriculture industry is determined by its own commodity prices.

The monthly NAB Rural Commodities Index is another indicator we look at every month. It ticked up slightly in February 2021, dipped a little (-0.7%) in March and is back on the rise again in April (+2.3%).

NAB Rural Commodities Index, 2010-2021

NAB Rural Commodities Index
Source: NAB Economics

Overall, ag prices continued to perform well, which has extended a generally strong period for producers.

Cattle prices were the standout, breaking the 900c per kilo barrier, and trends in grain also look encouraging.

Sugar prices rose 2.2% in April, after a 6.2% decline last month, while wheat and beef prices were up 1.9% in April, dairy up 1.8%, as well as lamb (+0.9%) and wool (+0.7%).

BOM Rainfall Outlook, May-July 2021

BOM Rainfall
Source: NAB Economics, BOM

Rain fell across the country earlier in the year, however April was mainly dry, which is not yet a concern, argued the NAB economists, but it is worth watching.

Meanwhile, on global markets, the Aussie dollar is back on the rise, with forecasts looking towards a rate of around US 80 cents mid-year and 83 cents by year end. The current rate is around 77 cents, which is where it has been for most of the year.

Last year, the local currency rose from a pandemic low of 58 cents in late March to around 77 cents by the New Year, where it has stayed – more or less- since.

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