RaboResearch outlook for 2023 shows positive outcomes for agriculture, but not as good 2022

Rabobank's Australia Agribusiness Outlook 2023 outlined that the past year had high commodity prices and production volumes which often broke records.

"We're looking into 2023 now with a little bit of a more muted kind of tone," he said.

"We think grain prices will still stay well above the five year average, which is good news for farmers, but probably not go to these record highs that we had late last year."

While some sectors of agriculture will see a drop in prices, research has shown the wider agriculture industry will be in a healthy position through 2023.

RaboResearch general manager Australia and New Zealand Stefan Vogel said while the outlook was positive it was important that the industry eased their expectations of performance.

"Grain prices have been extremely high last year but also extremely volatile, driven a lot by outside factors around the Ukrainian war, and with that, we have seen really beneficial conditions for the farmers in terms of very strong prices at a point in time when many of them also harvested good crops," he said.

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"Yes, you had some areas where flooding has hurt production on-farm, but overall for Australia there were good times last year,"

Despite that flooding throughout Victorian and other agricultural hubs of eastern Australia, Mr Vogel said record high farm incomes in 2023 will perform better than what was seen in 2021, but won't be as good as the stellar incomes of 2022.

Mr Vogal said cheaper beef prices, which are at levels still regarded as good for producers, will mean there is some stabilisation finally in place, with Australian production rising and an increased cattle inventory becoming more productive.

Those in dairy should also expect "prices well above the average" in 2023, while croppers will get some relief from eye-watering fertiliser prices last year, even though they still will be relatively high compared to what farmers were used to 3-5 years ago.

"Fertiliser prices, which have been extremely high last year... have now globally already come down about 40-50 per cent from last year's highs," he said.

Mr Vogel had recently been speaking to farmers across the country as part of a series of forums held in communities across the country, and last week was visiting Victorian towns, including Buangor, whose surrounding areas had been impacted by major flooding late last year.

He said a silver lining from those heavy rain events was local irrigation supplies being really strong for farmers.

"I drove by [Lake Burrumbeet] and it has filled pretty nicely, probably at levels that locals here haven't seen in a while," he said.

"That shows a good start to the 2023 season, where we hope the weather will be a bit more normalised compared to the extremes we saw last year and those farmers who were flooded will benefit this year."

RaboResearch's outlook also found lamb production for sheep meat is also expected to push further into record territory, while wool's price outlook is also positive for 2023, driven by increase in fine-micron values.

Prices are expected to stabilise in 2023 for cotton, with production forecasted to be below record 2022 levels.