Comparisons with the GFC are difficult to make, says a leading economist

That's the prediction of leading agribusiness analysts from the NAB and ANZ.

NAB senior economist Phin Ziebell said any future downturn, as a result of COVID-19, could not be compared with the 2008 Global Financial Crisis.

Australia avoided recession, during the GFC. but this time the country faced a simultaneous supply and credit shock

"This is different from the GFC, for Australia - it's already more severe," Mr Zeibell said.

"What saved Australia was fiscal stimulus, China had its own massive stimulus, which led to a massive export boom.

"China is emerging slowly from this crisis, which is positive, but we should not expect the same kind of stimulus, this time."

He said most food Australians ate was grown locally.

"People still need to eat and at this stage we have not seen any real disruptions to Australian food supply, outside of panic buying and hoarding.

"All that investment has gone into people's freezers and bedrooms.

"A lot of inventory is now sitting in households, so there'll be a lot of uncertainty, around inventories, in six months' time."

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The NAB Rural Commodities Index had its best month on record in February - rising 8.5 percent month-on-month, largely reflecting booming livestock markets.

Big rains in many areas have driven re-stocker markets into a frenzy, with hope that the big dry has now broken in New South Wales and Queensland.

"That's what happens when you have two yeras of drought and then a bit of rain," he said.

Even as producers emerged from drought, there would still be a tough period, after the grass started growing again.

"Livestock buyers have not been going all in buying, there have been a large number of buyers, all looking to dip their toe in the water.

"There are so many of them, that's what has pushed prices higher."

Mr Ziebell warned producers to expect a lot more volatility in cattle and lamb prices.

Substantial climate risks still remained.

"If we don't see a good season from here, livestock prices are almost certainly overdone at this level" he said.

As a net exporter of food products, Australia was well placed in terms of food security.

Despite a miserable 2019-20 harvest, there was still grain in storage and the livestock industry could still provide meat.

This could be compounded as the virus spread through the community, potentially shutting sites.

The NAB's index said some inputs such as agricultural chemicals and fertiliser were substantially imported.

"If trade flows break down these could be affected," the report said.

"Overall, Australian agriculture will play a vital role in keeping Australians in good health through the crisis."

The report found the biggest impact of the virus was likely to be increasing demand in domestic markets, but it could also potentially limit export demand complexities around trade.

Mr Ziebell said the biggest challenges were in potential disruptions to the supply chain and labor shortages, for the horticultural sector.

There could also be an impact in processing and packing.

"If coronavirus is picked up in your packing shed, and you are packing lettuce, how are you going to respond to what's going to happen to the product in your shed, at that moment?" Mr Ziebell said.

"These are readily perishable products, you can't come back in two weeks' time.

Coronavirus would also lead to some question marks around higher end products.

While South Korea, one of Australia's biggest markets for red meat, was also emerging from the crisis, that didn't mean people would be in a rush to go back to restaurants.

"People will be conservative, and that's going to reduce demand for fancy imported products."

Victorian Farmers Federation president David Jochinke said agriculture would continue to function, but it would probably not quite be "business as usual.

"The word essential is probably pretty broad," Mr Jochinke said.

In discussions with the government, he said he'd been assured the agricultural sector would be able to continue operating, albeit while taking the proper precautions.

"It's the whole agricultural supply chain we need to have operating, at the national level, human health is the number one priority, behind that is the food supply chain," Mr Jochinke said.

"That's a similar sentiment to what I've been getting out of the Victorian government.

"We are encouraging people to put in place good practices, to reduce the spread and transmission of coronavirus."

That might mean not taking the stock agent into a paddock, or practicing social distancing measures when unloading livestock or picking up fertiliser.

Mr Jochinke said the industry couldn't flaunt the exemption it had been granted.

"We need to take this seriously, but we also need to be able to function, as well," he said

"Striking a happy medium is what we are trying to do, as an industry."

ANZ's Head of Agribusiness Mark Bennett agreed a low dollar was very helpful, particularly when selling commodities.

"It certainly provides an insulating backdrop, along with a general undersupply situation in some of our key commodities," Mr Bennett said.

"What is the great unknown is how long the coronavirus impact will remain, and what twists and turns it will take, before it's over."

He also agreed disruptions in the supply chain would present periods of uncertainty.

"It's hard to see how deep, and how long, those impacts are going to be felt, it's all adding up to an unknown situation, and there has to be an impact on confidence, in the short term."

Regulations were aimed at protecting human health, which was the right thing to do.

"But then it's a question of how the transport of food and commodities, and their processing, that fits into that."

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