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The spring outlook for beef demand and farmgate pricing in New Zealand is positive, with tight global beef supplies and strong demand from China and the US. The AgriHQ North Island bull price has increased, and farmers can make trading decisions with confidence. However, labour shortages and processing challenges have led to lower beef export volumes, and the US cow herd liquidation is affecting demand for New Zealand lean trimmings. Overall, the beef market is expected to remain elevated, but cost headwinds and production risks should be considered. Commodity prices for dairy products have continued to decline, influenced by inflation concerns, recession fears, and doubts about global economic growth. Milk production in New Zealand has decreased, impacted by a dry autumn period in Waikato and fickle weather conditions. Global milk production is also struggling, with sluggish growth in the EU due to adverse seasonal conditions and feed shortages. The Chinese dairy market remains uncertain, with restrictions and economic softening. Despite these challenges, dairy prices are supported by elevated prices in export regions and strong demand from China and the US. Russian fertiliser exports, including potash, are expected to remain strong despite a slight decrease year-on-year. Phosphate prices are projected to trend down due to larger supplies in North and South America. Agrochemical prices in China have already declined due to production capacity expansion, although energy shortages may slow the rate of decline. Oil markets globally remain tight, and crude oil prices have been affected by economic outlook and demand factors. Ocean container and bulk shipping rates are experiencing fluctuations due to global economic conditions and supply chain issues.

The Bureau of Meteorology (BOM) predicts above-average rainfall for most parts of Australia this winter, except for Western Australia and western Tasmania, which are expected to have average or below-average rainfall. The BOM's seasonal outlook also indicates a high chance of exceeding median rainfall on the east coast between August and November, which could benefit crop growth. However, the increased rainfall also poses a risk of flooding. Cattle prices have been declining, with many now below year-ago prices, leading to reduced buying activity. Slaughter numbers are slowly increasing, but processing capacity constraints persist. The Oceania dairy commodity complex experienced mixed results in July, with cheese prices showing the smallest declines, while milk powder and butter prices fell by around 10%. Milk supply in Australia and New Zealand has been affected by poor weather conditions, leading to decreased production. China's dairy market faces challenges, including elevated inventories and concerns about demand. Farmgate milk prices in Australia remain at record levels, providing some stability for dairy businesses despite global uncertainties. Rabobank expects above-average global grain prices, with CBOT wheat prices forecasted to trade within a certain range over the next 12 months. However, Ukraine's grain exports faced disruptions due to geopolitical tensions with Russia. In Australia, the winter crop area is expected to be slightly lower than the previous year, with reductions in NSW and Queensland due to excessive rain and waterlogging. The harvest season may bring downward pressure on prices due to a large crop, significant on-farm grain volumes, and congested port zones from the previous year. The nitrogen and Agri-chemical markets are influenced by factors such as gas prices, supply and demand issues, and changes in pricing for key ingredients.

New Zealand's beef exports faced a decline in demand from the US market due to lower US demand caused by the liquidation of the US cow herd and ample supplies of 90CL cow. However, exports to China remained strong, surpassing the five-year average export volume. Despite the challenges, farmgate pricing for beef remained elevated, supported by tight global beef supplies and a favourable exchange rate. New Zealand's dairy industry experienced a decline in exports to China, with a 30% YoY decrease in the first half of the year. The reduction was attributed to weaker Chinese demand due to COVID-related lockdowns and increased local milk production. However, milk production in New Zealand remained steady, with a slight increase in June compared to the previous year. Despite the export challenges, farmgate pricing for dairy products remained elevated. Global urea markets experienced falling prices, reaching 11-month lows in July. However, signs indicate that supply and demand issues will push prices higher in the coming months. The global container rate index declined, but rates are expected to normalize over the next 12 months, remaining higher than pre-pandemic levels due to various factors such as imbalanced trade flows and increased operational costs. The Baltic Panamax index, representing grain bulk freight, continued to decrease, and the resumption of grain exports from Russia and Ukraine via the Black Sea remained uncertain.

The Australian beef industry has faced multiple challenges, including a drop in prices and struggling export markets. The decline in the Eastern Young Cattle Indicator (EYCI) was driven by concerns over Foot-and-Mouth Disease (FMD) entering the country, but other factors have exacerbated the market's vulnerability. The low number of cattle being processed and, in the saleyards, coupled with the influx of US beef on the international market due to drought in the United States, has contributed to the volatility in prices. Australian beef exports have been significantly lower than in previous years, and there are no signs of a quick recovery in major markets. Canola prices have skyrocketed due to a shortage caused by drought in North America and export bans resulting from the war in Ukraine. However, recent weeks have seen a decrease in canola prices, and producers are uncertain about the future market outlook. While global vegetable oil supply and demand are expected to return to normal in the upcoming year, high crude oil prices will continue to exert upward pressure on vegetable oil prices. The Indonesian government's actions to reduce domestic cooking oil costs have resulted in a surplus of palm oil for export, leading to a drop in palm oil prices. The conflict in Ukraine has disrupted the global grain and oilseed sector, causing record-high grain prices and raising concerns about food security. Australia's position as a major grain exporter, particularly for wheat, barley, and canola, has been highlighted during this crisis. Australia's exports contribute to global food certainty and security, as the country supplies quality grain during the opposite season of major Northern Hemisphere exporters. Ongoing uncertainty and poor crop conditions in the Northern Hemisphere are expected to drive strong demand for Australian grain exports. Australia's share of overall barley and canola exports continues to rise, emphasizing the global importance of the country's crop. Despite some months remaining until harvest, forecasts indicate that Australia is on track to produce a near-record crop for the third consecutive year.

Australian beef prices have experienced a sharp decline since mid-June, attributed to various factors such as rising input and transport costs, higher interest rates, global growth uncertainties, and staff shortages due to COVID-19. Despite supportive seasonal conditions, the market remains uncertain. However, prices still remain relatively high compared to historical and international standards, with a forecast for prices to remain above pre-2020 levels into 2023. Global dairy trade auction results have been decreasing, although farmgate prices are generally strong due to high demand and competition for milkflow. However, this poses a risk of margin squeeze for processors. The wool market has seen some weakening before the winter recess. Overall, the dairy sector is experiencing challenges amidst higher interest rates and concerns about a global economic slowdown. Grains, particularly wheat, have been affected by rising fears of an economic downturn and uncertainties related to geopolitical events such as Russia's invasion of Ukraine. Wheat prices have dropped, although they remain elevated compared to pre-February levels. The global supply picture for grains is mixed, but demand fundamentals remain strong. Australian seasonal conditions are mostly supportive, and the country is expected to have an above-average crop this season. Australia is likely to remain a key supplier in the global grain market due to ongoing demand and limited impact from lower global growth.

The Bureau of Meteorology predicts above-average rainfall for large parts of Australia this winter, except for Western Australia and western Tasmania, where average and below-average rainfall is expected. Despite a wet start to the year, rainfall in June was below average for Australia. May beef exports showed a year-on-year increase for the first time in eight months, indicating an increase in cattle supplies and beef production. Global beef markets remain strong, supporting finished cattle prices. May milk production in Australia was down 6.6% year-on-year, but record-high milk prices are expected to stabilize milk supply in the new season. Dairy company margins are under pressure due to high milk prices, impacting retail and foodservice businesses. The Netherlands' dairy sector faces challenges due to the need to reduce nitrogen levels in water and soils. The strength of New Zealand's peak milk production for the new season will test global market fundamentals. Global fertiliser prices have declined but remain above their five-year average, with potential upward price pressure driven by energy prices and seasonal demand. Changing ideas on Black Sea grain production and export volumes will impact prices. Government trade barriers and EU biofuel policies are increasing volatility and affecting grain pricing. The EU's decision to turn off the Russian gas tap will impact gas prices and N fertiliser production costs. Interest rate hikes and inflation concerns contribute to a volatile market.

The New Zealand beef sector is experiencing favourable conditions. Strong global demand, particularly from China and the United States, has been driving beef prices higher. New Zealand's beef exports are expected to increase due to rising demand and the country's reputation for high-quality, grass-fed beef. However, challenges such as supply chain disruptions and tightening feed availability due to drought conditions are expected to impact beef production and export volumes in the short term. The global dairy market has been characterized by supply tightness, pushing milk prices higher. New Zealand, as a major dairy exporter, has benefited from this trend. New Zealand's dairy production is recovering from the impacts of previous weather-related challenges, such as droughts and floods. However, there are concerns about the increasing cost of inputs, including feed and fertilizers, which could potentially impact the profitability of dairy farming in the future. Droughts and heatwaves have led to reduced yields and quality issues for crops like wheat and barley. This has resulted in a tighter domestic supply and increased reliance on grain imports. Global grain prices have been surging, driven by strong demand and supply disruptions in major producing regions. New Zealand grain farmers are facing increased input costs and challenging market conditions, which may limit their profitability in the short term.

Beef prices have remained relatively stable over the past few months. Despite good weather conditions and excellent growing conditions, rising feed costs present a challenge for feedlot operations. While cattle prices remain elevated compared to historical norms, there may be smaller downside risks due to global inflation. However, the impact of rising interest rates on consumer demand for Australian beef is uncertain. Global dairy trade prices have seen a decline since autumn, primarily driven by weaker cheddar prices. However, opening prices for the next year are excellent, providing a strong foundation for the dairy industry. With prices at $8.50/kgms for Saputo and $8.25 for Fonterra, dairy farmers can expect favourable returns in the coming year. Global grain prices have slightly eased from their peak a few weeks ago but remain above historic norms. Several factors, including Russia's invasion of Ukraine, drought in Europe and parts of Africa, and supply chain challenges, have contributed to the pressure on grain buyers. Australian wheat, on the other hand, is competitively priced compared to international benchmarks, and the country is expected to be a key grain supplier in the coming year. The growing conditions for the 2022-23 season are generally good, with a possibility of excessive water in some eastern areas. The potential development of a La Nina event in spring poses both opportunities and risks for grain production and international markets.

Queensland and New South Wales experienced high levels of rainfall, which benefited the beef and dairy industries as soil moisture levels were above average. However, rainfall conditions were below average in southwest Western Australia and parts of South Australia, affecting grain production in those regions. The USDA's May report indicated a decline in global wheat stocks, with challenging outlooks in Ukraine, the US, France, and India contributing to supply tightness and potentially impacting prices. Despite the tight global market, Australian wheat production is expected to be above the five-year average, providing some optimism. Australian milk production experienced a decline compared to the previous season, but milk price increases have provided support to farmers. Record milk prices for 2022/23 are expected to boost confidence and cashflow for dairy farmers. However, cost headwinds, such as purchased feed and homegrown feed costs, pose challenges for the industry. The outlook for milk prices in Southern Australia for the upcoming season is optimistic, with forecasts ranging between AUD 8.00 and 8.80 per kilogram of milk solids. In the beef industry, widespread rainfall in eastern Australia supported eastern weaner cattle prices. However, restocker steer prices in New South Wales showed a smaller gain compared to Queensland, indicating the influence of seasonal factors on the cattle market. National cattle slaughter numbers in Q1 were the lowest since Q4 1985, primarily due to restricted capacity and labour shortages. Beef exports and live cattle exports declined, with disease issues in Indonesia further impacting live cattle exports. The increase in cattle on feed raised questions about feedlot margins and the potential impact on feeder prices. Sino-Australian relations saw positive developments with the reinstatement of licenses for Canada's canola traders to export to China and calls for China to remove tariffs on Australian coal, wine, and barley. The change in the Australian government presented a promising opportunity for the removal of barley tariffs. However, tensions in Sino-Pacific nations and ongoing trade developments with the US remain significant factors to consider. The Australian dollar faced both good and bad news, with its struggle to push above USD 0.70 being favourable for export returns. However, concerns over Chinese economic growth and weaker commodity prices, along with USD strength, affected the currency's performance. The Reserve Bank of Australia (RBA) raised the cash rate for the first time in over a decade, signalling more interest rate hikes to fight inflation. The AUD has recently recovered above 0.70 against the USD, but its sensitivity to global growth risks remains a factor to watch. Crude oil prices continued to rise, driven by policy uncertainty and the EU's efforts to ban oil imports from Russia. Global container rates faced downward pressure due to the war in Ukraine and China's COVID-19 lockdowns, leading to temporary lower demand. Congestion at ports and declining on-time arrival of ships contributed to cancelled sailings and impacted container rates. The Baltic Panamax Index, a proxy for grain bulk freight, is expected to rise as demand from state buyers increases. The global trade of grains and oilseeds is forecasted to rebound in 2022/23 after a slight decline in the current season.

Global beef markets have experienced significant disruptions due to export bans and restrictions. For example, Argentina, one of the world's largest beef exporters, imposed a ban on beef exports in 2021, causing global beef prices to rise. This led to increased demand for alternative suppliers such as Brazil and the United States. The beef industry in Australia, another major exporter, has also faced challenges. The country's herd size hit a 30-year low in 2022 due to drought and destocking activities, resulting in reduced beef production. As a consequence, cattle prices in Australia are expected to remain high for the next few years. Export bans and restrictions have also affected the global dairy industry. Malaysia, a significant chicken exporter, implemented a ban on chicken exports, impacting neighbouring Singapore, a major consumer. This has led to increased demand for alternative dairy products such as milk and cheese. In addition, New Zealand, one of the largest dairy exporters, has faced its own challenges. Adverse weather conditions, coupled with a drop in milk production, have impacted export volumes. The price of dairy products, including milk powder and butter, has increased as a result, affecting global markets. The grain industry has witnessed disruptions caused by export bans and restrictions as well. Egypt, a major wheat exporter, imposed a ban on wheat exports to secure domestic supply, leading to higher global prices. As a result, countries reliant on Egyptian wheat, such as Saudi Arabia and Indonesia, have had to seek alternative suppliers. Furthermore, adverse weather conditions have impacted grain production in several regions, including droughts in the United States and Australia. This has led to reduced crop yields and contributed to tightening global grain supplies, affecting prices and trade dynamics.