‘Geopolitical surprises’ lurk for farmers in 2026
Australian farmers should be prepared for “geopolitical surprises” in 2026 as the Trump Administration’s volatile trade policies continue to shape markets.
Agribusiness bank Rabobank flagged geopolitics and transportation as the top risk factors facing producers this year.
“There are likely to be further geopolitical surprises this year, as US President Donald Trump continues to slow down in the second year of his second term,” said Stefan Vogel, managing director of RaboResearch.
“Commodity markets, from energy to fertilizer to agricultural products, could feel the effects,” he said.
In early 2025, the US imposed tariffs on Australian beef, which were later lifted; This created uncertainty for manufacturers, although it did little harm to exports to the United States.
US demand for Australian beef rose in 2025 despite a 10 per cent border tax, but Mr Vogel warned Australia could expect more competition from South America in the US market, given most American tariffs on protein have now been removed.
“Meanwhile, China’s newly introduced beef import quotas pose additional challenges for both Australian and Brazilian beef importers,” he said.
Australian meat producers can expect prices, as well as wool and dairy prices, to perform relatively well throughout 2026.
The outlook for cereals, oilseeds, pulses, cotton and sugar is forecast to remain weaker over the next 12 months, with global grain supplies abundant.
Overall, Mr. Vogel said the agriculture sector is “well positioned” to overcome any challenges.
The bank’s agribusiness outlook has determined that food price rises for Australian households will be “less of a problem” in 2026 than the previous year, but some items will still be more expensive than hoped.
With overall inflation figures for the December quarter coming in warmer than expected and the unemployment rate falling, some economists predict interest rates will rise.
Outlook favors stronger Australian dollar by 2025; This increases the import purchasing power of local agricultural businesses while softening export returns in local currency.
The agricultural sector is also at the mercy of changes in climate and weather conditions; There is a possibility of El Niño due to drier conditions in the second half of the year.
The Bureau of Meteorology’s long-term forecasts point to higher-than-normal temperatures and near-normal rainfall through May for most of the continent, except the north.
“Prospects for agriculture will depend largely on how weather conditions develop,” Mr. Vogel said.
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