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Here are the main highlights for some of Australia's key commodities and economic influences for this month. The full report provides an overview of the developments to watch in the upcoming weeks.
Right now, affordability in some categories for some consumers is being challenged, given higher general inflation since 2021. Through June 2025, US foodservice traffic declined for nine consecutive quarters, as foodservice inflation has proven to be much stickier to the upside than food retail. However, quick-service restaurants focused on either chicken products or snacks and beverages have bucked the downtrend.US retail beef prices continue to break records, even as year-on-year per capita supplies are being stabilized by elevated carcass weights and larger beef import volumes. The price surge is being driven more by the robustness in beef demand, which is on track to be at its highest level in over 40 years. At the same time, the relative affordability of chicken and pork continues to support strong consumer purchases of those competing products.While tariff and trade outcomes are still a moving target, US dairy is having an impressive year. Through June, total dairy product shipments were up 1.2% year-on-year, and US cheese exports set monthly record highs in May and June. Year-to-date US cheese and butter exports are up 11% and 108%, respectively.Although important supply-side dynamics are also impacting markets, from a demand-side perspective, one thing seems clear: Consumers want ample animal protein and dairy products.
The estimated operating margins for the 2024/25 soybean and corn crops show signs of recovery compared to the previous season. In the case of soybeans, this improvement can be attributed in part to the rebound in productivity in certain regions, as well as the favorable impact of the exchange rate on commodity prices. Despite this apparent improvement, the figures do not show what should be the focus of attention. A deeper analysis of the financial results reveals that producers continue to operate under high levels of leverage, a reflection of the debts accumulated between 2021 and 2023. The credit environment in Brazil remains tight, pressured by a cautious market considering rising payment delays, increased requests for judicial recovery, and persistently high interest rates. These factors have strained producers’ financial conditions beyond operational performance, representing the main point of concern. It is important to note that this is not a reality exclusive to Brazil. In our 2024 Field crop margin outlook, we analyzed the scenario faced by key countries in the sector. One of the conclusions at the time was that this margin-compression cycle could extend for two to three crop seasons starting in 2024. For the upcoming season, our initial estimates point to an increase in operating production costs, particularly due to rising international fertilizer prices, which would result in a reduction of operating margins. Therefore, the focus for producers in the next season should be on reducing leverage, which will be essential to navigating this period of tighter operating margins. Another challenge producers face is the uncertainty stemming from geopolitical developments that continue to disrupt global markets. Given all these conditions, our analysis suggests that this tighter margin scenario will potentially last until mid-2027.
The US organic dairy sector is experiencing steady growth, driven by evolving consumer preferences, regulatory developments, and expanding production. The USDA Organic Program has provided a consistent framework for organic certification, helping organic dairy (and egg) sales reach USD 8.2 billion in 2023. Organic milk production rose from 3.4 billion pounds in 2014 to 5.2 billion pounds in 2021, with Texas leading in output. Despite challenges in data collection, RaboResearch estimates organic production has grown since 2021 due to healthier margins especially in 2024 and 2025, and projections suggest organic milk production could exceed 6 billion pounds annually in the coming years. Legislative efforts are aiming to improve transparency and provide support for organic producers. Although organic dairy farms face higher costs due to stricter standards, they also command premium prices. The consumers willing to pay this premium are motivated by perceptions of health, sustainability, and quality. Driven by this consumer demand, organic fluid milk has gained market share and seen volume growth, even as conventional milk sales decline. The strategic interest from private equity and M&A activity, such as Platinum Equity's acquisition of Horizon Organic, highlight the sector's potential. Looking ahead, global organic dairy sales are expected to continue growing, though price and farmer barriers to entry remain key challenges.
The United Kingdom is experiencing an unusual summer uptick in H5N1 avian flu outbreaks in commercial poultry, with 10 cases reported over the past two weeks, the Center for Infectious Disease Research and Policy (CIDRAP) reports. Ireland also confirmed an outbreak on July 31 in a small backyard flock. The two most recent UK detections were confirmed at commercial farms in East Devon and West Devon. The rise comes after the UK had lowered its avian flu threat level following a five-week stretch with no new detections. Unlike last summer, when Great Britain saw no poultry outbreaks from March to early April, this year’s detections suggest a shift in seasonal patterns. According to the latest weekly update from the Hong Kong Centre for Health Protection, recent H5N1 outbreaks have also been confirmed in poultry in Taiwan, Canada and Cambodia, based on notifications to the World Organization for Animal Health (WOAH). The most recent detection in US poultry occurred in early July on a game bird farm in Pennsylvania.
China has suspended imports for Argentine poultry products from August 20, just five months after lifting a two-year ban, reported Reuters. The notice of suspension, which was posted on a customs website, did not state a reason for the move or how long the suspension might stay in place. Customs authorities did not immediately respond to a request for comment. Beijing has also banned on poultry and related imports from its largest supplier, Brazil, since May and on imports from Spain this month, with authorities noting bird flu outbreaks in both countries. The two-year ban on Argentine poultry followed the detection of highly pathogenic avian influenza (HPAI) in the country's commercial poultry. "This decision may help support the prices of some poultry products as China has restricted imports from some major suppliers," said Pan Chenjun, a senior animal protein analyst at Rabobank in Hong Kong. "However, its overall impact (on prices) is likely limited due to China's current surplus of poultry meat and the industry's ongoing financial struggles." China mainly imports poultry products such as chicken feet, chicken wings, and bone-in chicken pieces. China's poultry meat imports from January to July totalled 226,013 metric tons, down 2% compared to the same period last year, customs data shows.
South Africa's Association of Meat Importers and Exporters (AMIE) welcomed a joint announcement by Ministers Tau and Steenhuisen outlining Government’s “Plan A” for long-term trade resilience and competitiveness, in particular, the emphasis on market diversification and the commitment to protecting jobs and rural livelihoods, which are critical for the South Africa’s meat export industry, according to a press release from the organisation. AMIE is the apex body for the South African meat import and export industry. Its core mandate is to pursue global access for SA beef, poultry, lamb and pork products.
For the beef export sector, and South Africa’s broader red meat industry, this is an important opportunity to build long-term growth. To fully realise this potential, AMIE has highlighted that key operational gaps must be addressed urgently, to facilitate access to new and existing export market opportunities. These include the urgent need for the Government to conclude standing regionalisation agreements, for both exports and imports, with its trade partners. These agreements limit trade restrictions to disease affected areas and safeguard supply chain continuity when disease outbreaks occur. For the meat export sector to flourish, South Africa also needs to strengthen its sanitary and phytosanitary (SPS) capabilities and capacity. “Diseases like Foot and Mouth Disease (FMD) are likely to remain part of our reality into the future, but they do not have to halt all exports. Many of our trading partners are open to sourcing beef from areas in our country not affected by FMD, provided regionalisation agreements are already in place," said AMIE CEO Imameleng Mothebe. "These agreements need to be concluded before outbreaks occur to ensure trade continuity and efficiency. Timely, proactive communication from the Department of Agriculture will help secure these arrangements more efficiently."“AMIE, with our deep sector expertise and established global network - including strong relationships with industry organisations in SA’s key export markets - stands ready to support Government’s trade objectives," she added. Mothebe said AMIE believes that stronger, more regular engagement between the Department of Agriculture and the Department of Trade, Industry and Competition, alongside industry, will be key to unlocking the country’s meat export potential.
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