In a remarkable turn of events, the agricultural landscape in the eastern states of Australia is experiencing a resurgence of confidence, driven by favourable summer rainfall.

After last year's predictions of a hot, dry summer by the Bureau of Meteorology (BOM), the latest report from Rural Bank reveals a positive shift in sentiment that is also set to underpin rural real estate markets in 2024.

Renewed confidence and price recoveries

According to the latest commentary from Rural Bank, the agricultural sector is witnessing a notable rebound in confidence, with improved conditions supporting price recoveries for livestock and favourable prospects for horticulture. The soil moisture levels also bode well for the year ahead, signaling a positive outlook after the challenges faced in 2023.

Cattle prices and export demand

According to Rural Bank, Australian cattle prices are set to continue their upward trajectory in February. Strong export demand and favourable seasonal conditions in key cattle regions are contributing to increased restocker demand[i]. This positive trend is expected to persist, building on the firm growth observed since mid-November.

Meanwhile, the momentum in beef exports is likely to continue, following a robust January marked by heightened demand from key markets. This sustained growth is a continuation of the positive trend recorded since mid-November, with the Eastern Young Cattle Indicator (EYCI) returning above 670c/kg in early February, reflecting a substantial 92.8% increase from the lowest point in mid-October 2023[ii].

Despite challenges posed by an ongoing El Niño weather pattern, Australia has produced 4.6 billion litres of milk at the halfway point of the season (July to December). This represents a 2% increase compared to the previous season. Encouragingly, milk production has risen across all states, ranging from 0.9% in Victoria to a notable 7.1% in New South Wales[iii].

Despite the persistent El Niño, Rural Bank says many of Australia's east coast cropping regions experienced above-average rainfall during the harvest period. This unexpected boost in precipitation has led to increased yields and enhanced production estimates for the 2023/24 season, providing a welcome relief to the agricultural community[iv].

Travis Wentriro, NSW Network Manager at Raine & Horne Rural said the improved conditions across the agriculture sector bodes well for rural real estate values. “The rural real estate markets in the eastern states are poised for growth, fuelled by renewed confidence, strong cattle prices, and solid agricultural production.

“Moreover, the challenges of 2023 seem to be giving way to a brighter future, and the team at Raine & Horne Rural is optimistic about the opportunities that lie ahead for the Australian agricultural sector and those vendors considering a sale this year.”

Travis added, “Better than expected rainfall and interest stability are expected to underpin agricultural land prices this year.”

If you’re considering listing a rural property, contact your local Raine & Horne Rural estate agent today.

[i] https://www.ruralbank.com.au/knowledge-and-insights/publications/insights/cattle/insights-february-2024/

[ii] https://www.ruralbank.com.au/knowledge-and-insights/publications/insights/cattle/insights-february-2024/

[iii] https://www.ruralbank.com.au/knowledge-and-insights/publications/insights/dairy/insights-february-2024/

[iv] https://www.ruralbank.com.au/knowledge-and-insights/publications/insights/cropping/insights-february-2024/