The Country 18/11/25: Stefan Vogel talks to Jamie Mackay

Rabobank's GM for RaboResearch says the global agricultural landscape has entered a new phase where geopolitics – not only traditional supply and demand market forces – will dictate agricultural trade flows, prices, and production decisions, according to the bank's Agri Commodity Outlook 2026. The report describes a world increasingly divided between two spheres of influence – the United States and China – where agricultural commodity exports have become “pawns on a geopolitical chessboard.”

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
The Rabobank has just come out with its agri Commodity
outlook for twenty twenty six has shot fired and anger
as we look towards a new year, Let's head to
Sydney the Sydney Office to catch up with GM for
RABO Research for Australia in New Zealand steff And Vogel
and Steffan. The headline on this report is more than

(00:20):
just supply and demand factors Shape and Global Agriculture in
twenty twenty six with geopolitics set to play a crucial role. Surprise, surprise,
good afternoon.

Speaker 2 (00:31):
I thought that, uh yeah, now, Jamie, look, we all
know how much the export destinations and export markets of
the world are impacted by the political positions. But maybe
very briefly, this is the Global report and he was
released last week and we've already seen that mister Trump
has changed his mind on beef tariffs. So with that

(00:54):
there are the changes than the one thing we mentioned
is what is certain is basically the uncertainty remains, so
we've seen that one coming in. I think for New
Zealand the changes here in the tariffs are actually nothing bad.
It will go back for the beef in quota trade
from the fifteen percent where we've faced now to slightly
under one percent. So that's a good kind of level

(01:16):
playing field now with the ones including US here in Australia.

Speaker 1 (01:19):
I'm sorry, do you think this could be the beginning
of the end for Trump's tariffs?

Speaker 2 (01:26):
Look, I think that the message we've already conveayed for many,
many months is that the threat of a tariff is
more powerful to the president's Trump in the negotiations than
the actual tariffs. So whenever the consumer hurts, and with that,
especially on the meat and food prices here, the consumer
in the US is hurting, He's making changes. I don't

(01:46):
think it will be the end of tariffs, but it
might be the end of tariffs or the more exceptions
to come for some of the food products that really matter.

Speaker 1 (01:56):
To the masses you mentioned. Jo politics, here's a question
for you, and now, are we now moving into like
a Cold war regime China versus the US as opposed
to Russia versus the US in the sixties.

Speaker 2 (02:12):
Well, we've already had that thesis for many years out
there that the sides are or the front are shaping
more into a cold war area. However, if you look,
with the Royals most recent treat deal, things even between
the US and China have calmed a little bit down,
but honestly they're only kicking the can one year down
the road. So with that, the good news out of

(02:35):
the deal between China and the US is basically we
will not see the por terriffs implemented, which could have
really changed the way that the freight market is reacting.
We get some more certainty that some soybeans out of
North America move into that Chinese market. But overall for
US in New Zealand and Australia, I think the grain
market takes it, and that's for your feeding costs probably

(02:57):
important takes it in a way that there are plenty
soybeans in the world market and China will anyway get
it from where wherever they can get it. So with that,
right now they're buying in the US it makes sense
it's cheap. They will move in a few months back
over to South America because that's where the volumes will
come with a new harvest in let's say February March onward.
So with that, China does what makes sense for China,

(03:20):
the US wants to do what makes sense for the US,
but the confronting to sites are not easy to overlap.
So with that, I think there's a bit of window
dressing in those trade deals.

Speaker 1 (03:31):
Stephan, sorry to come over the top of you here,
but I am limited on time. I want to quickly
have a look at some of these individual commodities. Dairy,
we have a global dairy trade auction tonight. Futures market
is pointing to perhaps another two percent fall and whole
milk powder. I see the futures market for New Zealand
and I appreciate that yours is a global report for

(03:51):
the twenty sixth season. Was it nine dollars seventy three
last time I locked?

Speaker 2 (03:55):
So?

Speaker 1 (03:56):
Is that a ten dollars milk price? Here in New
Zealand under severe threat?

Speaker 2 (04:01):
We fear there's a bit of pressure still coming from
the world market, because if we're looking into twenty six
there is continued growth in production in the big export
markets from the US but also from South America coming
into the market. So the forward curve is pointing a
little bit to the upside. But overall we see that
market pretty much going sideways to put in the US,

(04:23):
at least the futures market sideways to maybe slightly higher,
but the volumes that are coming in the world market
will give us here in New Zealand probably a bit
of a hard time because we need to get our
volumes into that Asian market.

Speaker 1 (04:35):
That seems that there's nothing but good news for base.

Speaker 2 (04:39):
Well for beef, yes, definitely well and mister Trump's changes
in mind came quicker than we could even write the report.
So I think for New Zealand the good news is
basically we're moving from a fifteen percent terrace back to
in quota tariffs of less than one percent. That brings
us more or less at a level playing field with Australia,
which moves from ten percent to nothing. We still have

(05:01):
Mexico not being able to move into that US market
because of a disease, and if you look at others,
the Brazilians, that's the big question mark right now what happens. Remember,
they got an extra forty percent tariff on top of
the reciprocal tariffs, and the market for now still expect
that that forty percent tariff will remain in place for
a while longer. So overall, the issue we're seeing there

(05:23):
for the Brazilians is that they may have a bit
of a tougher time to get in the US market,
which is good news for US.

Speaker 1 (05:27):
And I want to quote one of your final numbers,
GDP growth forecast for this year at two point nine.
Interestingly for twenty twenty six two point seven, so the
world economy is still in a sticky place. Hey, Stefan
Vogel out of Rabobanks Sydney office. Really appreciate your time
on the country.

Speaker 2 (05:45):
Thanks having me all of that