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FARMERS in Eastern Australia will be keeping a close eye on rainfall forecasts, according to a new report from Rural Bank.
The October Insights Update said rain will continue to be a major driver for the month ahead with the La Nina wet outlook predominating for eastern Australia.
Cattle and sheep restocker demand is expected to remain steady for the rest of the year due to the anticipated weather conditions, which should support strong competition.
Cattle prices are expected to remain strong, while supply is expected to remain tighter year-on-year as buyers continue to compete for a reduced pool of cattle. The average weekly slaughter rate in the eastern states has fallen 28 per cent compared to September, 2019.
Easing restrictions on workforce capacity in Victorian meat processing facilities should take some pressure off prices as the industry approaches its peak supply period.
Lamb supply is expected to increase 14 per cent to a seasonal peak, however sheep supply is expected to remain very tight.
Forecasts for La Nina in the east could also affect broadacre farmers. Heavy rain in New South Wales, Victoria and South Australia has the potential for quality downgrades in cereals and pulses as harvest starts to get underway.
Conversely, below average rainfall in Queensland and West Australia has caused crops to mature early, causing declines in yield potentials. Overall, the crop forecast is still high at 44.7 million tonnes - a year-on-year increase of 49 per cent and 9 per cent above average production.
Wet conditions are a positive sign for milk supply with several Tasmanian farmers reporting record milk volumes for this time of year.
However, there are concerns that the weather may degrade soil structure and pasture quality. Due to the abundance of rain, sunny days will become increasingly important to the dairy industry.
Global dairy prices have increased in the past two auctions and the buying cycles of Asian countries will be important contributors for price stability in coming months.
Labour remains a concern in horticulture, as growers face an impending shortage of 26,000 workers to harvest summer crops. The number of backpackers available for harvest has reduced by up to 60 per cent due to COVID-19.
Several horticultural commodities are already reporting strong results despite potential labour issues.
The mango harvest in the Northern Territory is expected to be larger this season with September prices 33.6 per cent higher than last year. Asparagus harvest is in full swing with a strong harvest expected across Victoria but early season prices are 40.8 per cent lower compared to this time last year.
While Australian wool prices lifted in early September, the Australian wool market may face weaker demand next month as buyers have satisfied near term commitments.
The global wool market remains subdued, and further increases to Australian prices will depend on consumer confidence increasing while Europe and the United States recover from continuing COVID-19 outbreaks.
The Chinese economy is recovering faster than its western counterparts and Chinese demand continues to underpin Australian wool prices.
Each month Rural Bank's Insights Update gives producers a valuable overview of production and pricing trends and an outlook for Australian agriculture covering cattle, cropping, dairy, horticulture, sheep and wool.
The Rural Bank Insights team provides a range of research and analysis to help Australian farmers make good business decisions.
Alongside its monthly report, the bank publishes bi-annual Outlooks to help farmers prepare and plan, along with an annual Australian Agriculture Trade report examining Australia's export markets and commodities, and the flagship Australian Farmland Values report, telling the story of national and regional farmland price performance each year.
As Bendigo and Adelaide Bank's specialist agribusiness division, Rural Bank works closely with the Bendigo Bank branch network to holistically understand customer needs and help Australians achieve their financial goals.
Rural Bank and Bendigo Bank also work together in supporting local communities, right across Australia.
Rural Bank's products and services are now available at more than 400 locations nationally via a network of banking partners and our own agribusiness lending specialists based in rural and regional centres across the country.
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