Winter 2026 Commodity Insights

The Winter 2026 outlook for Australian agriculture is defined by elevated input costs, fertiliser supply disruption and increasing global volatility. While seasonal uncertainty and cost pressures present challenges, tightening supply across key commodities and resilient global demand are providing support across several sectors. Read the full report.

Key takeaways

• Fertiliser supply disruption is emerging as the most significant risk to global and domestic agricultural production.
• Global wheat production is forecast to decline, supporting prices despite large Australian carryover stocks.
• Australian grain markets remain constrained by high on-farm storage and subdued domestic price movement.
• Cattle markets are stabilising following earlier supply-driven declines, supported by strong export demand.
• Sheep and lamb markets are tightening as flock rebuilding reduces available supply.
• Wool prices remain elevated due to constrained supply and strong demand for quality fibre.
• Dairy margins are being squeezed by rising fuel and fertiliser costs despite stable demand.
• Cotton prices have rebounded on expectations of reduced global production.
• Sugar markets are shifting toward a potential deficit, supported by biofuel demand.
• Egg markets have largely recovered, although supply remains uneven across regions.

Market context and current state of agriculture

Global agricultural markets are increasingly shaped by geopolitical disruption, higher energy prices and concentrated supply chains, particularly in fertiliser. Australia remains highly exposed to these dynamics due to its reliance on imported inputs.

Domestically, successive strong cropping seasons have led to elevated grain stocks, limiting price gains despite stronger global markets. At the same time, livestock sectors are transitioning into tighter supply cycles following periods of high turnoff.

Seasonal variability, including the potential for an El Niño event, remains a critical influence on production outcomes.

Major trends shaping the agribusiness industry

Trend 1: Fertiliser emerges as a structural constraint

Disruptions to global fertiliser supply are increasing costs and influencing agricultural production decisions, with potential impacts on yield, crop mix and profitability.

Trend 2: Global crop supply begins to tighten

After several strong seasons, global wheat production is forecast to decline, shifting markets toward a more constrained supply environment.

Trend 3: Domestic grain markets face storage pressure

High levels of grain held in storage are delaying the flow-through of higher global prices into Australian markets.

Trend 4: Livestock supply cycles are turning

Reduced cattle supply and smaller sheep flocks are tightening availability and supporting prices across livestock markets.

Trend 5: Input cost inflation reshaping farm decisions

Higher fuel and fertiliser costs are influencing planting decisions, stocking rates and overall farm profitability.

Trend 6: Diverging outcomes in fibre markets

Wool is benefiting from supply constraints and quality demand, while cotton is influenced by shifting global production and demand conditions.

Trend 7: Energy markets influencing agriculture

Rising oil prices and biofuel demand are increasingly impacting agricultural commodity prices, particularly oilseeds and sugar.

Challenges and risks to watch

• Fertiliser availability and sustained high input costs
• Weather variability and the risk of El Niño conditions
• Geopolitical instability impacting energy and trade flows
• High domestic grain inventories limiting price upside
• Currency movements affecting export competitiveness
• Concentration of global supply chains

Future outlook

Looking ahead, Australian agriculture faces a mixed outlook. Livestock sectors are expected to remain relatively well supported due to tightening supply, while cropping and fibre sectors will need to manage input cost pressures and variable seasonal conditions.

The interaction between global supply constraints, domestic production and input availability will be a key driver of outcomes across the year ahead.

Conclusion

The Winter 2026 outlook reflects an industry navigating increased volatility and structural change. While supply constraints and resilient demand support several sectors, rising costs and external risks require careful management. Producers who maintain flexibility, manage risk and focus on efficiency will be best positioned to respond to changing conditions and capture opportunities as they emerge.

Next steps

• Download the full version of ANZ Agri InFocus: Commodity Insights Winter 2026.
• Explore more of our Agribusiness banking services.
• Talk to one of our specialists by requesting a call back.