June market update

Written by Jack Lucas, Customer Support

Livestock under pressure: climate and market forces shape Australia’s ag sector

As winter deepens, Australia’s livestock industry faces a dual challenge: an intensifying drought and surging global demand for Australian beef. This interplay of climate and market forces is reshaping how producers manage stock, sell, and plan for the future.

Climate stress builds in the South

Drought has gripped southern Australia, leading to a “fodder drought” in Victoria, South Australia, Tasmania, and New South Wales. Struggling pastures and rising feed prices are forcing producers into tough decisions like early de-stocking or Long term agistments. There’s growing frustration in rural areas that the severity of the drought isn’t fully recognised in urban Australia, raising fears of a repeat of past downturns and farmers not getting the support they need.

The price for fodder continues to affect southern producers with bales of Hay now frequently costing between $200-300 per mt. It is hoped that rain will continue to frequent throughout the area to help provide some relief around the amount of water producers have stored on farm, reducing the amount being trucked on farm. 

Global markets fuel beef boom

Despite local challenges, Australian beef exports are soaring, up 15% year-on-year by May 2025. Strong demand from China, the U.S., and Japan is a welcome sign for exporters, but it also means domestic buyers face tougher price competition due to limited supply. Sustained drought could jeopardise long-term export supply chains. 

This has been seen locally with average prices rising by $140 per head, showing that the demand for quality stock is high. The Queensland cattle grid saw a spike of 20c per kg as southern processors seek to purchase more cattle. 

Lamb listings rise as feed tightens

The sheep and lamb sector sees similar pressures, with producers offloading more animals. Online platforms like Auctions Plus and Elders show increased listings from dry southern regions, highlighting the ongoing challenges southern producers are facing of managing stock without enough access to fodder. Listings rose by around 20% compared to the prior weeks Selling off breeding ewes and early lamb sales raise concerns about future flock rebuilding.

Processors have also been helping drive steady demand in the heavy and finishing lines that were in the sales. Wagga Wagga Sale yard smashed the National Lamb Record, a pen of 133 Dorset crosses sold for $424.20 per head, this being driven by the demand for good quality finishing lambs.

Looking ahead: resilience and reform

Industry leaders are calling for stronger government support, including investment in water infrastructure and early intervention strategies. Broader environmental concerns, like drought preparedness and habitat impacts, also need addressing. As Australia’s agricultural sector navigates these challenges, resilience will be crucial for shaping the seasons ahead.