While strong domestic prices and production should signal a good financial season for producers – risks on the global horizon raise a series of difficult questions for many producers. How much and for how long should beef and sheep producers invest in restocking while global prices are looking subdued? What should wool producers consider the new ‘norm’ for the Eastern Market Indicator? Will government efforts to support dairy prices in the US and EU lead to longer term downward pressure on prices? And what of the Australian dollar? At low levels it has provided valuable insulation but at closer to A70c than A60c, we are more exposed to global characteristics.
Across all these questions, and more, many producers are cautiously optimistic as COVID-19 washes through the global economy.
Madeleine Swan is Associate Director, Agri Research at ANZ
Click here to read the full ANZ Agri InFocus report for July 2020