That said, while the high prices are a benefit for many, they also undeniably provide challenges for others in the supply chain, including some graziers seeking to restock, as well as feedlotters and processors looking for a sustainable margin. In addition, the record prices also require many in the market to re-examine their own business strategies to manage the eventuality that values recede to a reasonable extent in coming months. Consideration should be given to where we are in the cycle in what is a long-term, capital intensive industry.
Globally, a number of the issues which will affect the Australian agri sector in coming months still have much more to play out. The trade issues between Australia and China may have gone quiet but remain active while any impacts on global agri trade of the change of administration in the US will begin to take shape this year. At the same time, as consumers globally continue their economic recovery from the worst of COVID-19, a pick-up in demand may well flow back through Australian agri trade supply chains.
If 2020 was the year the agri sector was taken by surprise, yet reacted admirably, then 2021 should be the year where it is positioned to not just build on what it has learned but capitalise on the new opportunities available to it. If we could just get a follow up season to assist….
Mark Bennett is Head of Australian Agribusiness at ANZ