The superstars of the industry-wide report are dairy farmers, who NAB congratulates for reaping the benefits of good prices and strong seasonal conditions.
NAB agribusiness economist Phin Ziebell said dairy opening prices were a reflection of what he called “hot competition” between dairy processors.
“Opening prices have been announced, and in the case of Saputo and Fonterra Australia, already stepped-up,” Mr Ziebell said.
Saputo opened at $6.65/kg milk solids and stepped-up to $6.85/kg MS three days later.
Fonterra Australia opened at $6.55/kg MS and stepped-up to $6.85/kg MS.
“Smaller processors are offering comparable opening prices,” Mr Ziebell said.
These smaller processors include Bulla, Bega and ACM.
With astronomical feed and water costs now gone, pressure has been taken off the average dairy farm, according to NAB.
“Milk flow has likewise stabilised and the latest forecast from ABARES puts production just shy of nine billion litres for 2021-22,” Mr Ziebell said.
In other commodities, cattle prices remain close to record highs and domestic grain prices have increased in response to a global rally.
Mr Ziebell said sentiment was strong, with domestic wheat futures back above $300/tonne while canola continued its standout performance.
Wholesale fruit and vegetables prices both gained in May, up 4.5 per cent and 23.7 per cent respectively.