Rural
19 March, 2025
Spotlight on Trump, tariffs and weather
BENDIGO Bank’s Agribusiness Monthly Commodity Update finds that ‘on-again, off -again’ U.S. import tariff announcements have nervous markets keeping a close eye on the potential impact on Australian agricultural exports, which while still largely unknown at present, are anticipated to drive further volatility throughout March.
Livestock sectors are under pressure with the impacts on horticultural production of ex-tropical Cyclone Alfred are still being assessed.
Senior Manager Industry Affairs, Bendigo Bank Agribusiness, Neil Burgess, said cattle prices are continuing to benefit from strong export demand, though “unpredictable weather” in southeast Queensland could see some additional market volatility and supply chain disruption.
“Ongoing high volumes to the U.S. are expected to continue through March, with strength in exports to South Korea sitting 11 per cent higher year-to-date and 28 per cent higher year-on-year and national export volumes sat at just over 117,500 tonnes for the month, up 45 per cent from January, with the U.S. continuing as the major export market, taking in just over 35,000 tonnes,” he said.
“Beef exports to China also showed firm month-on-month growth of 42 per cent, a 36 per cent year-on-year increase, while exports to Japan were higher than in January but now sit lower when compared year-to-date.”
Cropping
Global markets are still reeling from on-again off-again U.S. import tariff announcements, which have quickly fed through into local pricing. Volatility is likely to remain an ongoing factor throughout March as the trade situation remains highly fluid.
“The Trump administration’s aggressive trade policies have upended global markets, particularly targeting China, Mexico and Canada, with the latest round of U.S tariffs triggering swift retaliation with deepened economic uncertainty sending shockwaves through both commodity and financial markets,” Mr Burgess said.
“Commodity markets had already been under pressure in anticipation of the tariff announcements, but in recent days, the sell-off has accelerated dramatically with wheat futures plunging 13 per cent in recent weeks, corn futures tumbling 9.5 per cent from their February peak and soybean futures also dropping 6.7 per cent since early February.
“In short, the global market remains on edge waiting for the next move in this unfolding trade dispute, the temporary exemption provides short-term relief but leaves open questions about the future of trade policy when the exemption expires on 2 April 2025.”
Dairy
While there is a clear trend of declining production from a promising start, output is expected to stabilise relative to last season in coming months. Milk production continues to flag amidst a decline in January output and a hard finish to the season is likely to see Australian milk production finish around 8.3 billion litres.
Consumers are opting for cheaper imported dairy products in response to cost-of-living pressures with imported products placing pressure on local processors, however, higher global prices have improved margins for processors this season compared to last despite stiff competition from those cheaper imports.
Sheep
High processing capacity continues to support lamb and mutton prices despite dry conditions in many sheep producing regions. Any discussion around potential U.S. tariffs targeting imports from Australia will be keenly monitored by processors and exporters.
Lamb markets have been relatively steady over the past month, dipping slightly through the middle of February before recovering following rains across large parts of eastern Australia.
“With the U.S. as Australia’s largest market for lamb, any tariff announcements targeting imports from Australia will be keenly watched by processors and exporters,” Mr Burgess said.
Lamb slaughter is almost 30 per cent above the five-year average for the month, but prices are expected to remain relatively steady throughout March as continued strong supply and dry seasonal conditions limit upside.
