Fuel, fertiliser shortages could deliver barren harvest
Australia’s regional and rural businesses will face a triple threat from fuel, fertilizer and interest rate changes in the coming months, but they can fight back with investments in renewable energy and artificial intelligence.
NAB published this recommendation in its Regional and Agribusiness Horizons Report on Wednesday; The report found that agricultural businesses achieved strong returns in 2025 despite the challenges and international trade increased.
But the major bank warned that some regional businesses were better prepared for the disruption than others and many may need to consider cash flow and business relationships to continue operating.
The warnings follow global supply problems for diesel, oil and fertilizer caused by conflicts in the Middle East, as well as predictions that the Central Bank will raise interest rates again in May.
NAB’s fifth annual agribusiness report revealed that agricultural production is on track to reach $100 billion this financial year – four years ahead of target – and winter crop production is up 10 per cent.
International trade increased by 12 percent in 2025, driven by farming and mining operations, despite uncertainty over tariffs.
Regional businesses also received more of our loans; borrowing increased by 6.8 percent and investment in solar energy (up 32 percent) and automated machinery (up 8.7 percent).
NAB regional and agribusiness manager Khan Horne said the strong results would help businesses overcome the challenges they would face.
“Regional businesses are coming off a strong period, but conditions have become more challenging,” he said.
“Rising interest rates, persistent inflation and disruptions to fuel and fertilizer supplies mean planning ahead and acting early has never been more important.”
Mr Horne said international shortages of diesel and urea would hit regional businesses particularly hard because both were critical to many organizations and were largely imported into Australia.
He said more regional businesses are exploring electric vehicles such as solar panels and forklifts to protect themselves from fuel and energy fluctuations, as well as AI-powered machines and remote monitoring applications to increase productivity.
“Some people are prepared, some people are well prepared, some people say, ‘Okay, it’s a new quarter, it’s a new dynamic, what are the actions I can take to get through this?'” he told AAP. “he thinks.”
“There are certainly businesses that will have to monitor their profitability and cash flow.”
Australian grain, beef and lamb demand is expected to remain strong over the next six months, although unpredictable weather conditions could change the demand outlook, the report said.
