By Stefan Bradley
Rabobank’s Head of Food & Agriculture Research for Australia and New Zealand Stefan Vogel was in Sale last month to meet clients, which include dairy, beef and sheep farmers.
Mr Vogel provided insights into the major local commodity markets, as well as global insights, such as the impact of the Russian invasion of Ukraine on Australian agriculture.
“It’s a terrible humanitarian situation that is impacting massively on our markets, not just for grains, but also for imports like fertiliser and energy,” Mr Vogel said.
Mr Vogel said that Russia and Ukraine make up a combined 25-30 per cent of the global exports of the key crops of wheat, barley, corn and canola.
“With the war starting, we are seeing almost no exports out of Ukraine because all of the ports are closed, and we don’t expect them to come back soon, and they usually export 75 to 80 per cent of the commodities they are producing,” he said.
“To give you an idea, Ukrainian export volumes are twice the size as Australia’s in this season.”
The main concern for local livestock and horticulture clients, Mr Vogel said, is rising import costs.
“The price of feed is rising, grain prices are rising, fertiliser prices are rising because of the sanctions on Russia and Belarus who are extremely important exporters of nitrogen fertiliser, and of course, the rising price of diesel and gasoline impacts everything,” he said.
“The good news for farmers in our region is that the prices of milk, beef and grain are very strong, so the impact is not yet felt.”
Mr Vogel’s main advice for farmers is knowing your operations and understanding how to reduce input costs where possible.
“Whenever your costs are rising, you have to make sure your outputs are hopefully offsetting those costs, so those are the issues I discussed with farmers.”