Australian commodity August update

Australian agricultural exports surged to a record $81.4 billion in 2025/26, driven by ongoing growth in livestock sector exports. Meanwhile, the re-emergence of conflict in the Middle East and Black Sea over the last month has begun to impact global trade. Uncertainty surrounding export logistics have seen grain markets lift, despite early August rainfall providing a further boost to winter crop production prospects.

Ag sector outlook

• Cattle: While strong US demand offers a market buffer, recently triggered safeguard tariffs will test importer resilience and likely slow the current rate of trade.
• Horticulture: Australian horticultural exports hit a record $3.5 billion in 2025/26 underpinned by citrus and nut sectors. Market concentration remains an increasing risk with China accounting for a record 36.3 per cent of all exports.
• Cropping: Australian wheat is benefiting from marginal price support due to Black Sea export uncertainty. Meanwhile feed barley has inverted the east-west premium with domestic demand broadening.
• Dairy: Australian dairy imports are once again on the rise, especially from the US. Competitively priced overseas dairy product may supplement the expected decrease in milk production this season, with implications for mid-season step ups.
• Sheep: High prices and tight supply have shaken up Australian sheepmeat exports so far in 2026, but the second half may bring an uplift in demand from one of Australia’s major markets.
• Wool: Season 2026/27 has started on a downturn, although the 2025/26 season made the most of its growth with an impressive 20 per cent increase in the value of exports over the year.
• Carbon and climate: While recent rain has been beneficial, a strengthening El Niño and forecasts for a dry, warm spring mean follow-up rainfall is critical for crop development.