Agricultural
10 February, 2026
The world is shaky, but our Ag industry is looking solid
Rabobank’s yearly outlook for the agricultural industry looks solid despite ‘Geopolitical turmoil’ being the big risk.
The bank has identified the ‘dominant risk factor’ being the quickly changing global trade landscape and volatile prices.
Nonetheless its research indicates that the Australian agricultural industry should be resilient.
This is despite what looks to be a commodity price ‘divergence’ between well performing meat and wool produce, and the strained price of grains, oilseeds, pulses, cotton and sugar.
Cotton saw a sharp drop in the December quarter, Rabobank attributes this to a global oversupply.
However, due to this the bank is optimistic of an adjustment later in the year which will hopefully develop a price floor over 2026.
Last year saw the largest contraction in lamb slaughter in 40 years.
Prices are likely to remain high over the year due to competitive prices and high demand, with a likely adjustment later in the year as flocks rebuild.
Beef is looking solid with steady slaughter rates and prices, however, this could change easily with seasonal and trade disruptions.
Dairy is still one to watch over 2026 with global market conditions weakening and putting pressure on farmgate prices.
The strain on the dairy industry isn’t likely to change anytime soon as global demand is still high.
“That said, there is an anticipation of small price improvements for most crops, while livestock produce prices might marginally weaken from the relatively strong values seen in the second half of 2025,” RaboResearch general manger Stefan Vogel said.
However, this is all sits precariously down the track from whichever direction the trade-train goes next.
“With President Trump not slowing down in the second year of his second term, further geopolitical surprises are likely this year, commodity markets, from energy to fertilisers to agri goods, may feel the effects,” Mr Vogel said.
“Australia had benefited from strong US demand for beef in 2025, despite tariffs and, with most US tariffs on beef now removed, competition from South American beef in the US market may intensify.”
However, another possible challenge is China’s newly-introduced beef import quotas which would affect not only Australia but Brazil’s beef industry.
The outlook for each part of the agricultural industry is also seen in Bendigo Bank’s 2026 Australian Agriculture Outlook which expects much the same from 2026.
Bendigo Bank expects beef prices to rise, wool and sheep to stay steady with strong prices.
Cropping is expected to stay relatively steady with high global demand, especially for barley being highly sought after in China and the Middle East over the first quarter in 2026.
Wheat is unlikely to rise in price until later in the year when harvest costs are recouped.
However horticulture and dairy are expected by Bendigo Bank to have a tough year.
“Military actions and threats, including Russia’s ongoing war in Ukraine and new military signals from the US, add further uncertainty,” Mr Vogel said.
Shipping is also subject to regional and geopolitical volatility.
Weather will remain as significant a risk as ever.
Soil moisture remains insufficient except in the north which could probably do with a little less at the moment.
The Bureau of Meteorology’s long range forecasts point to higher temperatures and lower than average rainfall through until May, except in the north.
While Australia’s economic growth is looking good this year, the stagnation in the US, China and the Eurozone will subdue global markets, especially if the Australian dollar makes it to 0.69 USD as Rabobank predicts by the end of the year, improving import purchasing power.
Energy and oil will also be very susceptible to global events.
Crude oil seems like it will sit at 60 USD a barrel.
Diesel costs are likely to remain high due to low refining capability.
“...although geopolitical risk remains a wildcard,” Mr. Vogel said.
