Highlights

The NAB Rural Commodities Index moved marginally higher in January –rising by 0.4% month-on-month in Australian dollar (AUD) terms. The effect of a weaker currency was evident here –in US dollar terms, our index fell by 1.2% mom –continuing a downward trend evident for the past four months.

Key to the increase in our AUD index in January were higher average prices for beef (albeit prices jumped early January before subsequently declining over the course of the month) along with a more modest increase in dairy prices. These increases were somewhat offset by weaker trends for lamb, fruit and sugar.

Rainfall conditions in January were below average across most of the country –with the exception of the NSW east coast and parts of WA’s north-west coast. The BoM’s forecasts for February through April see above average rainfall for the period across most of the country –particularly in the north –while parts of southern WA and the south east are likely to see rainfall within the typical range.

Climatic conditions –as measured by the El Nino-Southern Oscillation (ENSO) index –have remained in neutral territory in recent months, approaching the La Niña threshold in January. The BoM’s modelling suggests that conditions will remain within the neutral range in coming months, gradually moving away from the La Niña threshold.

The outlook for the global economy is increasingly uncertain –particularly with respect to trade policy, with US tariffs risking a damaging trade war that could see growth slow and inflation rise. We see Australian economic growth picking up in 2025, driven by improving consumer spending, with gradually easing inflation and policy rate cuts set to provide a boost.

Read more here: NAB Rural Commodities Wrap – February 2025