Agriculture is moving confidently into 2024 according to the Rabobank annual outlook

Predictions from a leading banker with a wide range of farm operation customers can see a bright light shining ahead for production increases and input price reductions

Rabobank’s Annual report highlights how the outlook for beef and sheep prices is more optimistic for producers in 2024

Australia’s agricultural sector is “moving confidently into 2024”, with an overall positive outlook for the nation’s farmers and agribusiness industries in the year ahead, Rabobank says in its newly-released annual outlook.

The agricultural banking specialist says a combination of better-than-expected seasonal conditions and lower input costs has helped set up the sector for a strong year. And, while agri commodity prices are “well down on the highs seen over the previous two years”, the bank’s price forecasts point to “continued positive farm margins in key agricultural sectors in 2024”.

Global economic headwinds, however, are set to continue, the bank cautions in its flagship Australian Agribusiness Outlook 2024, with ongoing concerns particularly around China’s economy and import volumes, as well as the impact of geopolitical issues on freight. While locally, a tight labour market will continue to present challenges for Australia’s farm sector and agribusiness industries.

Report lead author, RaboResearch general manager Australia and New Zealand Stefan Vogel said the “major agri sectors” were moving into 2024 with a confident outlook, after “El Nino didn’t turn out as bad as feared, with recent significant rainfall received across most farming areas except Western Australia”.

“Grain farmers are set to plan more optimistically for the purchase of farm inputs and the upcoming planting period for winter crops like wheat, barley and canola,” he said, “especially in the growing areas outside Western Australia, which was the only region that hasn’t received much rain.

“For beef and sheep producers, the outlook for farm-grown feed in the first half of 2024 overall looks more promising, allowing them to hold on to more of their livestock and go to market with heavier weight lambs for example.”

Rabo Research general manager Australia and New Zealand Stefan Vogel stands behind the optimism shown in latest farm production forecasts for 2024

Price outlook

While agricultural commodity prices remain well down from the highs reached in 2022, the outlook is overall more positive for 2024, with the bank’s Rabobank Rural Commodity Price Index pointing to prices tracking at improved levels in the year ahead and near the five-year average.

“Price developments will vary per sector,” Mr Vogel said. “Grain prices are likely to remain under pressure, as markets globally and locally battle with a supply outlook for 2024 that is more plentiful than in past years. For a significant 2024 price upside for grain, the world would need to see weather-related supply shortages arise.”

The beef and sheep price outlook is more optimistic and above the 2023 lows, he said.

“Prices in late 2023 moved up from the lows, but the animal protein sector will continue to work through large Australian production volumes that need to move into quite congested global markets, and the economic headwinds that are expected to continue in 2024 won’t help to much improve global demand. Still, we expect 2024, especially the first half of the year, to see higher beef and sheep prices compared with the second half of 2023.”

Global dairy commodity prices, meanwhile, are expected to “have bottomed”, the bank said and will likely improve in 2024.

“Locally in Australia, while there will likely be some downward price pressure on some parts of the southern dairy region for new season milk from July 1, domestic markets will provide ongoing support for farmgate prices, and the margin outlook for dairy farmers remains positive,” Mr Vogel said.

Rabobank expects to see local nitrogen fertiliser costs decline by 10 to 20% and phosphate by 10 to 15% in 2024 when compared against the prices farmers paid in 2023

Improved input costs

Farm input costs are also set to be lower this year, Mr Vogel said.

“Farm input prices globally – for fertilisers and plant protection products – are forecast to be below last season,” he said. “As Australia imports most of those products and continues to work through local inventories, we remain confident that costs on farm will look better than last year.

“A good part of farm inputs available in Australia last season were still reflecting the cost of Covid and Black Sea war price shocks, but now lower global prices should make their way through to be reflected in Australian inventory.”

The bank expects to see local nitrogen fertiliser costs decline by 10 to 20 per cent and phosphate by 10 to 15 per cent this year compared with 2023 prices.

“Potash has an even higher potential to ease farming budgets, with prices expected to trend down even more than the other fertilisers,” the report said.

Agro chemical prices are also forecast to decline in 2024 – primarily driven by a “massive increase” in Chinese production capacity in the past three years which is seeing the beginnings of a supply glut in 2024, Mr Vogel said.

However, these price reductions may take some time to be felt at Australian farm gates, as older stock makes its way through the system.

Geopolitical risk

While geopolitics and the escalation of international conflicts could result in a big upward swing in energy prices – which would have a knock-on increase in the cost of farm inputs – for now, crude oil prices have remained “surprisingly subdued” despite heightened Middle East tensions, the bank says.

“Our global crude oil price outlook also remains rather modest and well below US 100 a barrel, at least as long as the conflicts in the Middle East don’t spread wider,” Mr Vogel said.

The risk of higher shipping costs and freight delays, though, does remain a concern, with the Israel/Hamas war and the escalation of military activity around the Red Sea leading to soaring shipping prices, especially container freight, and a tightening of global shipping capacity, as increasingly more freight vessels take a longer route around Africa.

“The good news for now is that shipping costs are still not as high as in the record 2021 Covid-related shipping crisis,” Mr Vogel said. “However if the Red Sea Houthi attacks escalate further, Australia may once again struggle to find containers for export later in the year.”

Global economic outlook

The global economic outlook – while better than in 2023 – is still subdued for the year ahead, the Rabobank report says, and this will continue to create headwinds for Australia’s agricultural exporters.

“China’s economy is likely to remain slow, which isn’t the best set up for our exports to the region, as Chinese consumer demand will need more time to gear up into full swing,” Mr Vogel said.

While Australia’s trade relations with China improved in 2023 – with the removal of Chinese import duties on Australian barley and its tariffs on Australian wine now subject to review – the relationship remains fragile, the report says.

With regard to the ongoing Russia/Ukraine war, Mr Vogel said, global markets appear to have learned how to navigate war-reduced exports from Ukraine, while Russia continues to be a major exporter of grains in 2024. “This makes the possibility of massive grain price swings like the ones seen two years ago rather unlikely,” he said.

Local economic drivers

Locally, there is more positive news on the economic front, the report says, with interest rates forecast to plateau for most of the next six months before rate cuts are expected to come in towards the last quarter of the year.

The Australian dollar – which since the end of December has seen a reversing of strong gains recorded in the last quarter of 2023 – is expected to strengthen modestly again towards late 2024.

“We see the AUD bottoming out at USc 65 before rallying up towards USc 70 on a 12-month view,” the report says.

“This upward move in the currency would slightly contribute to relieving some of the cost pressure for imported inputs and goods used on farm, although it would not be enough to notably hurt Australia’s competitiveness when it comes to agricultural exports,” Mr Vogel said.

Labour will remain a pressing challenge for the farm sector, the Rabobank report says, with the tight labour market expected to continue. “And this will require an ongoing focus to invest in labour efficiency technologies,” Mr Vogel said.


Sustainability – and especially emissions reductions – will remain a key theme for the year ahead and into the long-term future, the report says, as Australia and the world continue to work on reducing greenhouse gas emissions.

“Supply chains are working on solutions, trials and testing consumers’ willingness to pay,” Mr Vogel said. “On-farm, most of the transitions are still to come, and more and more farmers seek to understand the emissions footprint of their operations and what changes to put in place.”