November 4, 2025 • 6 mins
Rabobank’s senior agriculture analyst previews the bank’s November Agribusiness Monthly - aptly titled “Spring throws parting weather shots”.
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Episode Transcript
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Speaker 1 (00:00):
Up to Sydney. Now on the country there we find
Stefan Vogel Rabobanks GM of RABO Research for Australia in
New Zealand. Stephan, you guys are about to release your
November Agribusiness monthly. I want to start if I can,
on interest rates and exchange rates, particularly interest rates. Our
OCR is currently sitting at two point five there is
(00:22):
talk of another drop late this month to two point
two five. Yours in Australia is sitting at three point
six percent. Why is yours so much higher than ours?
Speaker 2 (00:32):
Yeah, that's a very good question. Look in the race
of putting interest rates higher, when every central bank did
that two years ago, we were actually one of the
late ones. We were starting increasing the interest rates much later,
and also on the way down, we started much later.
And that the kind of sentiment here has changed quite
a bit. So if we would have talked a month
(00:53):
or two ago, I would say, well, a lot of
people in the market still have several twenty five basis
coin cuts in the forecast for the next six eight months,
and those have more or less evaporated in many of
the forecasts because inflation here in the country is really sticky.
So we have seen a couple of surprises of those
(01:13):
numbers to the upside, and the unemployment numbers, while for
a while looking like they could balance and keep the
argument going that well, maybe the RBA keeps on and cutting,
all of that didn't play out. So basically we're at
the point when we look at the latest economic data
that come in. Inflation is sticky, unemployment doesn't justify that
(01:34):
we actually keep on cutting.
Speaker 1 (01:36):
What about here in New Zealand, what chance of us
getting down to two point two five percent? Because there was,
of course talk of us getting to two percent, but
that seems to have dissipated obviously off the back of
higher than expected inflation.
Speaker 2 (01:50):
Exactly, and it's a bit the same in New Zealand.
So we're looking at New Zealand these days, and we
still hold one more cut of twenty five in November.
That is a little questionable, but we will now hold
that forecast. But as you said, there is not a
lot of other cuts expected after that, so that we
might end actually that cutting at two point twenty five.
Speaker 1 (02:13):
So maybe this is as good as it gains. Let's
have a look at the commodity outlooks. I'll start with dairy. Okay, look,
we've had a global dairy trade auction overnight down again.
Dairy prices are softening and that a lot of that's
due to the supply on the global stage.
Speaker 2 (02:28):
Yeah, that's a little bit the tenure here in the region.
If you look across the board, we see actually really
strong supplies on the world market coming now in and
also if you look at New Zealand, I think volumes
were good, while here in Australia we were actually a
little sluggish. So overall, if you look at it, butter
(02:50):
prices that were really the driving force over the last
let's say two years, we're back down to levels that
we had about six months ago in terms of price,
so they have given quite a bit of downside globally.
And we've also seen that the skim milk and whole
milk powder prices are weakening. So with that global picture
of plenty of supplies and plenty of choices, prices are
(03:13):
getting a bit under pressure and I think it's hard
to imagine that that will change somewhere quickly. We have
gone through a period of tightness in the global market,
but now it seems to be reversing.
Speaker 1 (03:26):
Well, you can't say that about bats. Still plenty of
demand for that.
Speaker 2 (03:31):
Yes, I think the driver obviously is if you look
at prices locally in New Zealand, they're still very good.
We have seen overall the volumes going down from where
they were last year, and if you think about the
demand on the global picture has been really strong and
that is helped by the US. The US is one
(03:51):
of those big importers these days. The heard in our
view is at that point where they start to slightly rebuild,
but it's not going to be a quick one. So
in our view, the good news in that beef market
is there is continued demand, maybe not as strong as
it is now in a year or two from now,
but it's still going to be pretty good in our views.
(04:12):
The problem in that beef market is obviously tariffs, and
New Zealand facees fifteen percent, Australia ten, but Brazil fases
fifty and so in an environment like this, New Zealand
has still been relatively competitive and exported a little more
than last year to the US so far this year
despite the tariff, Australia shipped actually thirty percent more. This
(04:34):
is by ten percent tariff, so that terrifs are not
holding us back as long as they are, there's really
low levels and as that the demand in the market
is still good, which is really really positive for our
local prices.
Speaker 1 (04:46):
Let's finish on shape, mate, eleven dollars a kilo at
the moment. Albeit that's an off season take. If you want,
how long can we define gravity? Because varying commentators are
saying varying things. I'm going to be talking to Professor
Keith would put on the show so tomorrow and he's
suggesting we could see a major correction before Christmas. What
do you think the lamb I'm talking about?
Speaker 2 (05:07):
Yeah, So in the landmarket, I mean for now, the
export has been once again a driver here that kept
these prices at these very lofty levels. If we're looking
into the competitive market and that's over here in Australia,
the strong one. We think that a lot of farmers
held back on the lands over the last couple of
weeks get them a little bit higher weights on, but
(05:28):
that they are now getting actually into the period of
selling some more. So the risk is out there that
you're going to face more headwinds from Australian exports going
into that market. So we're fearing that there is a
bit of a correction. If it is a major one,
is probably too early to say. But these prices are
pretty lofty as that right now, and we don't expect
(05:50):
them to hold at these really good levels, but we
also don't expect them to fall completely apart.
Speaker 1 (05:55):
Stefan Vogel out of Sydney Rabobanks, GM of RABO Research.
Thanks for your time. You can read all about this
the November Agribusiness Monthly Report on the Rabobank website. I
think it's going to be out tomorrow. Thanks for your time.
Speaker 2 (06:09):
Thank you very much for having me. Jamie
Up to Sydney. Now on the country there we find
Stefan Vogel Rabobanks GM of RABO Research for Australia in
New Zealand. Stephan, you guys are about to release your
November Agribusiness monthly. I want to start if I can,
on interest rates and exchange rates, particularly interest rates. Our
OCR is currently sitting at two point five there is
(00:22):
talk of another drop late this month to two point
two five. Yours in Australia is sitting at three point
six percent. Why is yours so much higher than ours?
Speaker 2 (00:32):
Yeah, that's a very good question. Look in the race
of putting interest rates higher, when every central bank did
that two years ago, we were actually one of the
late ones. We were starting increasing the interest rates much later,
and also on the way down, we started much later.
And that the kind of sentiment here has changed quite
a bit. So if we would have talked a month
(00:53):
or two ago, I would say, well, a lot of
people in the market still have several twenty five basis
coin cuts in the forecast for the next six eight months,
and those have more or less evaporated in many of
the forecasts because inflation here in the country is really sticky.
So we have seen a couple of surprises of those
(01:13):
numbers to the upside, and the unemployment numbers, while for
a while looking like they could balance and keep the
argument going that well, maybe the RBA keeps on and cutting,
all of that didn't play out. So basically we're at
the point when we look at the latest economic data
that come in. Inflation is sticky, unemployment doesn't justify that
(01:34):
we actually keep on cutting.
Speaker 1 (01:36):
What about here in New Zealand, what chance of us
getting down to two point two five percent? Because there was,
of course talk of us getting to two percent, but
that seems to have dissipated obviously off the back of
higher than expected inflation.
Speaker 2 (01:50):
Exactly, and it's a bit the same in New Zealand.
So we're looking at New Zealand these days, and we
still hold one more cut of twenty five in November.
That is a little questionable, but we will now hold
that forecast. But as you said, there is not a
lot of other cuts expected after that, so that we
might end actually that cutting at two point twenty five.
Speaker 1 (02:13):
So maybe this is as good as it gains. Let's
have a look at the commodity outlooks. I'll start with dairy. Okay, look,
we've had a global dairy trade auction overnight down again.
Dairy prices are softening and that a lot of that's
due to the supply on the global stage.
Speaker 2 (02:28):
Yeah, that's a little bit the tenure here in the region.
If you look across the board, we see actually really
strong supplies on the world market coming now in and
also if you look at New Zealand, I think volumes
were good, while here in Australia we were actually a
little sluggish. So overall, if you look at it, butter
(02:50):
prices that were really the driving force over the last
let's say two years, we're back down to levels that
we had about six months ago in terms of price,
so they have given quite a bit of downside globally.
And we've also seen that the skim milk and whole
milk powder prices are weakening. So with that global picture
of plenty of supplies and plenty of choices, prices are
(03:13):
getting a bit under pressure and I think it's hard
to imagine that that will change somewhere quickly. We have
gone through a period of tightness in the global market,
but now it seems to be reversing.
Speaker 1 (03:26):
Well, you can't say that about bats. Still plenty of
demand for that.
Speaker 2 (03:31):
Yes, I think the driver obviously is if you look
at prices locally in New Zealand, they're still very good.
We have seen overall the volumes going down from where
they were last year, and if you think about the
demand on the global picture has been really strong and
that is helped by the US. The US is one
(03:51):
of those big importers these days. The heard in our
view is at that point where they start to slightly rebuild,
but it's not going to be a quick one. So
in our view, the good news in that beef market
is there is continued demand, maybe not as strong as
it is now in a year or two from now,
but it's still going to be pretty good in our views.
(04:12):
The problem in that beef market is obviously tariffs, and
New Zealand facees fifteen percent, Australia ten, but Brazil fases
fifty and so in an environment like this, New Zealand
has still been relatively competitive and exported a little more
than last year to the US so far this year
despite the tariff, Australia shipped actually thirty percent more. This
(04:34):
is by ten percent tariff, so that terrifs are not
holding us back as long as they are, there's really
low levels and as that the demand in the market
is still good, which is really really positive for our
local prices.
Speaker 1 (04:46):
Let's finish on shape, mate, eleven dollars a kilo at
the moment. Albeit that's an off season take. If you want,
how long can we define gravity? Because varying commentators are
saying varying things. I'm going to be talking to Professor
Keith would put on the show so tomorrow and he's
suggesting we could see a major correction before Christmas. What
do you think the lamb I'm talking about?
Speaker 2 (05:07):
Yeah, So in the landmarket, I mean for now, the
export has been once again a driver here that kept
these prices at these very lofty levels. If we're looking
into the competitive market and that's over here in Australia,
the strong one. We think that a lot of farmers
held back on the lands over the last couple of
weeks get them a little bit higher weights on, but
(05:28):
that they are now getting actually into the period of
selling some more. So the risk is out there that
you're going to face more headwinds from Australian exports going
into that market. So we're fearing that there is a
bit of a correction. If it is a major one,
is probably too early to say. But these prices are
pretty lofty as that right now, and we don't expect
(05:50):
them to hold at these really good levels, but we
also don't expect them to fall completely apart.
Speaker 1 (05:55):
Stefan Vogel out of Sydney Rabobanks, GM of RABO Research.
Thanks for your time. You can read all about this
the November Agribusiness Monthly Report on the Rabobank website. I
think it's going to be out tomorrow. Thanks for your time.
Speaker 2 (06:09):
Thank you very much for having me. Jamie
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