Weaker demand to impact ag exports

REDUCED household incomes across the world relarted to the costs of the Middle East impact are expected to impact Australian agricultural export values and reduce export volumes of livestock and livestock products.

That was the verdict of the Australian Bureau of Agriculture and Resource Economics, which has just released its update for the September quarter.

The report says the value of agricultural exports is forecast to fall 5% to $76.3 billion in 2026–27.

The expected fall is being driven by both lower livestock and livestock product export value ($3.1 billion lower) and a fall in crop export value (down $1.2 billion).

“The expected fall in agricultural export value in 2026–27 is largely being driven by volume, with livestock and livestock product export volume expected to fall (down by 4%) reflecting weaker global import demand for beef and sheep meat,” the report stated.

“Reduced market access and limited growth in household disposable incomes across key export markets (amid the ongoing impacts of the conflict in the Middle East) is forecast to see the elevated demand for beef and sheep meat in 2025–26 ease in 2026–27.”

Crop export volume is also forecast to fall by 7% in 2026–27, largely reflecting expected lower winter crop production.

Crop export prices are expected to increase (up 4%), however, driven by an expected fall in global production, particularly in major exporting countries and increased demand for biofuel feedstocks.

ABARES says global economic growth has weathered the shock from the Middle East conflict better than expected, supporting demand for Australian agriculture.

“Despite the ongoing shock to global energy supply, which is projected to reduce growth in 2026, a combination of reduced consumption, inventory drawdowns and shifting trade patterns have seen many countries adapt to higher prices for liquid fuels, fertiliser and plastics,” ABARES stated.

“These responses have limited the negative impact of the conflict on overall economic growth and inflation.”

According to ABARES, despite the overall depreciation of several key currencies, demand for Australian agricultural commodities had remained strong.

“Overall, economic growth in Australia’s major trading partners is expected to remain fairly steady over the forecast period,” ABARES stated.

“In August 2026, the Reserve Bank of Australia (RBA) forecast quarterly trading partner growth in the range of 3.4% to 3.8% to June 2027, an upward revision since their April release.

“In its July 2026 report, the IMF forecast growth of 5.0% in 2026 for countries in emerging and developing Asia, slightly higher than its previous forecast by 0.1%, although still down from 5.6% in 2025.”

ABARES noted an Asian Development Bank (ADB) report in July 2026 also suggested that while China faced “subdued private spending”, domestic demand remained a primary driver of growth for much of the rest of developing Asia and the Pacific.

“This relatively resilient external outlook is expected to continue supporting demand for Australian agricultural exports,” ABARES stated.

The report also noted global shipping remained disrupted by regional conflicts around key chokepoints, which has resulted in a significant reduction or cessation of vessel movement through the Strait of Hormuz and the Bab el-Mandeb Strait.