NAB price and production forecasts are in



The weak Australian dollar (AUD) is underpinning a bright outlook for most major agricultural products next financial year according to the latest National Australia Bank (NAB) Agribusiness price and production forecasts.

The report provides forecasts for seven major commodities within the NAB Rural Commodities Index, wheat, beef, dairy, lamb, wool, sugar and cotton.

General Manager NAB Agribusiness Khan Horne, says the price outlook for 2015-16 is positive but the production outlook is more clouded, underscored by the Bureau of Meteorology’s declaration of El Niño in May 2015.

“The AUD is expected to bottom out in 2016 at 0.73 cents to the US dollar, and this will provide on-going support to agricultural prices,” Mr Horne said.

“This is reflected in our overall NAB Rural Commodities Index forecast, which we expect to flat-line in the September quarter 2015 before increasing until the September quarter 2016; however after this point the rising AUD is likely to dent the index somewhat.

“Upward momentum in Australian cattle markets continues virtually unabated and prices are well into record territory, boosted by strong feedlot and US demand in particular.

“On balance, we expect prices to increase 26.2 per cent in 2015-16. Production is likely contract 8.8 per cent in 2015-16 as current slaughter rates don’t appear sustainable.”

Lamb prices and production are expected to remain more stable over the forecast period with a 1 per cent decline in production and a 1.2 per cent increase in price.

“Global wheat supply is forecast to increase which will keep a lid on prices, but locally we expect the falling AUD will provide some support. Overall, our forecast is for prices to increase 3.4 per cent in 2015-16,” Mr Horne said.

“The impact of El Niño events on wheat yield is disparate and difficult to forecast, so we are somewhat more pessimistic than ABARES’ forecast for a harvest of 23.6 million tonnes this season. A classic El Niño could readily push the harvest down to 20 million tonnes or potentially lower.”

For dairy, China’s milk powder replenishment of 2013 and early 2014 does not look set to be repeated, with inventories continuing to increase, and global supply generally strong. Consequently, there is little upside forecast for dairy prices in the year ahead.

Wool prices have rallied since April, with the Eastern Market Indicator at its highest level since mid-2011. The Eastern Market Indicator is expected to rise 11.7 per cent in 2015-16 and production to decline 4.4 per cent over the year.

After big production falls in 2014-15 for cotton, NAB forecasts a small (2 per cent) recovery in production and prices to rise 9.3 per cent in 2015-16.

Agribusiness View provides the latest insights from NAB Agribusiness. Visit to sign up as well as to find the contact details for your nearest NAB Agribusiness Manager.


Important Note: Any advice in this editorial has been prepared without taking into account your objectives, financial situation and needs. Before acting on this advice, you should consider its appropriateness to you.

About NAB Agribusiness

National Australia Bank (NAB) Agribusiness is Australia’s leading Agribusiness Bank and has been supporting Australian farmers for more than 150 years. NAB employs more than 600 agribusiness banking specialists in 110 metropolitan and regional locations Australia-wide. With their local and industry knowledge, our Agribusiness team understand the unique financial and environmental needs of farmers and businesses beyond the farm gate – whether they provide inputs into agriculture or process, distribute or market primary produce. NAB also has a specialist Agribusiness Asia Desk to help Australian farmers make the most of the rapid growth in demand for high quality produce in Asia. We deliver a flexible range of agribusiness products and services by listening to and working with our customers, to tailor the best packages and advice for their businesses. For further information please visit












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