ANZ Agribusiness Insights Luncheon

Stefan Bradley

Favourable weather complimented an optimistic insight into agriculture at the ANZ Agribusiness Insights Luncheon on Tuesday.

The event took place at the Mewburn Park Homestead in Maffra and was attended by about 50 people from a variety of professions, such as farmers, accountants, stock agents and machinery dealers.

They had gathered to find out what the two guest speakers had to say about commodities, particularly about the beef and dairy industries.

ANZ head of Agribusiness and Specialised Commercial Banking Mark Bennett spoke first.

Mr Bennett right out of the gate hailed how profitable farming had become.

“Wow, times are good right now,” Mr Bennett said.

Mr Bennett told the Gippsland Times that as a bank, ANZ saw opportunity in the investment landscape.

“We have strong pricing in most commodities. Whilst we have rising costs, we’re in a world of general under supply, so margins are still there for those that have got good seasonal conditions,” he said.

“And that’s true across most of Australia at the moment.”

Mr Bennett said that the beef industry had been “quite spectacular.”

“It’s been great in the last 18 months especially. The question to ask is how long can that hold?

“The good times are actually coming off a bit, but the lows are still incredibly profitable and well above three and five year average pricing. It’s a five month low, but what a low!”

After his address, Mr Bennett introduced the next speaker, Dairy Australia Industry Insights and Analysis manager John Droppert.

Mr Droppert told the guests that they were living in interesting times and “an unstable world.”

“Markets are hot, prices are high, confidence has improved, but costs are on the rise again,” Mr Droppert said.

“Fertiliser is very expensive due to high gas prices and the war in Ukraine. Two-thirds of sunflower oil comes from Russia and Ukraine. So even our dairy industry is affected by the war.”

Mr Droppert said the competition for milk was reflected in the strong prices.

“But costs of course are going up as well, so from the perspective of a farmer, it’s all going to be about watching the margins into the new financial year, with fertiliser, grain and fuel costs going through the roof. It’s a real job to manage that.”

“I want to highlight the volatility in the market from COVID, the logistics challenges and the war in Ukraine.”

The event was scheduled to end at 2.30pm that day, which was coincidentally the same time the Reserve Bank of Australia announced it was increasing interest rates for the first time in 11 years with a 25-basis-point hike, taking the cash rate target to 0.35 per cent.

Speaking to the Gippsland Times after the hike was announced, Mr Bennett said it would have a different effect on each individual in the beef industry.

“Things in the beef industry are still very good and profitability is relatively high, so most producers are in a good position to absorb higher costs,” he said.

“If we can see that inflation settles back to the preferred rate, the need to increase interest rates further would be relieved.

“We’ll have to see if the interest rate has the desired effect quickly, but if it doesn’t, it will make it more difficult for those who owe money.”

Dairy Australia Industry Insights and Analysis manager John Droppert speaking at the Mewburn Park Homestead in Maffra.

ANZ head of Agribusiness and Specialised Commercial Banking Mark Bennett speaking at the Mewburn Park Homestead at Maffra.

ANZ head of Agribusiness and Specialised Commercial Banking Mark Bennett speaking at the Mewburn Park Homestead at Maffra.

Mewburn Park Homestead at Maffra hosted the Agribusiness Insights Luncheon. Photos: Stefan Bradley