Grain farmer
Grain farmers have generally had a good year. Image – Canva.
  • Record-breaking 2020-21 harvest is done; the winter crop planting is approaching
  • Except for Queensland, the summer season just past was generally wetter and cooler
  • Overall, the NAB Rural Commodities Index rose 2.6% in February, +1.8% year on year

With a record harvest now behind them, farmers are looking forward to the new season, and if the latest NAB Rural Commodity Index is anything to go by, it’s another positive story.

Except for Queensland, the summer season just past was generally wetter and cooler than average, providing “good soil moisture levels.”

With La Nina providing less rain than the wet season usually would in some part of Queensland, there are concerns that “some producers have missed out.”

Although some rain did fall last week, which helped a little, the Queensland cattle industry could continue to have challenges throughout this year.

Cattle prices remain near record levels, but could dip downwards if the dry conditions remain.

Global grain prices have been strong, and prices in key South East Asian markets offer good returns for Australian producers, says the NAB Report. This is in sharp contrast to the situation of two years ago.

The NAB is expecting the Australian dollar to reach US 83cents this year (currently, it’s just over 77cents).

Across all commodities in February 2021, prices were ‘in the green’ zone, representing increases across the board:

Monthly Commodity Price Increases

MonthlyCommodity Price Changes Feb21
Source: NAB Group Economics, ABARES, Meat and Livestock Australia, Australian Pork, Ausmarket Consultants, Australian Bureau of Statistics, Bloomberg and Profarmer.

Overall, the NAB Rural Commodities Index rose 2.6% in February. The index is now 1.8% higher than the same time last year.

Strong Ag supports regional property

The regional property market has been strong in Australia in recent months, buoyed by commodity price gains in ag and mining. This report makes the case for continued optimism for the agricultural sector as a whole, except for the situation in Queensland, which remains “more complex”, according to the NAB Economics report.

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