Australia -Wheat and barley: The USDA’s initial 2026/27 outlook signalled a tighter global grain balance, with lower cereal production and historically low corn stocks, supporting prices.
Despite a late-May market pullback driven by macro factors and seasonal pressure, underlying fundamentals remain supportive, pointing to firmer prices ahead.
Canola: Global canola production is rising, but stronger crushing and biofuel demand are absorbing supplies and reducing exports. Prices remain supported as energy markets and policy continue to favour vegetable oils.
Beef: Cattle prices recover the losses over the last couple of months as rainfall across larges parts of the country improves producer sentiment and numbers of cattle through saleyards decline. High cattle inventory continues to support record production and export volumes.
Sheep: Lamb and mutton prices recovered after price drops in late April, early May. Prices continue to remain strong in light of low and declining stock numbers. New production data shows lamb carcass weights reached new records as strong prices encourage producers to grow lambs out longer.
Wool: Wool prices continue to rise in the face of declining supplies. The EMI rose 2% for the month with Coarser microns seeing a larger rise. Ongoing limited supplies are expected to keep prices strong, with the potential for increased buying activity towards the end of the season to push prices higher.
Cotton: US cotton futures have eased back to the mid‑70s on improved weather across the US. With US weather conditions stabilising and Brazil exports strong, the market is shifting focus to Eastern Hemisphere supply risks due to a below-average monsoon forecast, supporting a broadly tighter global outlook.
Farm inputs: Input prices remain high and volatile, driven by energy markets, supply constraints, and policy restrictions. Rising costs are eroding farm margins and forcing demand rationing despite only temporary price relief.
Sugar: Sugar prices have declined recently due to oil market volatility and weaker ethanol economics in Brazil, with policy uncertainty shaping production decisions. While higher sugar output may pressure prices, weather risks in Asia rising biofuel demand could offer some support.
Dairy: Record whey prices continue to dominate global dairy markets settings. Meanwhile, new season milk pricing in Australia and New Zealand has been announced and is mostly steady with 2025/26 prices, as a recovery in commodity values supports early price signals.
Consumer foods: Food inflation falls to its lowest level since December 2021, but consumers are not out of the woods. Meanwhile, consumer confidence remains in the doldrums.
Interest rate and FX: As forecast, the RBA raised the cash rate by 0.25ppts in May to 4.35% – equal to the previous cycle high. There were some further signs of economic slowdown in the month, and the RBA sent some signals that it may be nearing the end of the hiking cycle, but we are maintaining our forecast of an August hike.
Oil and freight: Oil prices fell on peace hopes in late May, but the Strait of Hormuz remains mostly closed and a deal is proving elusive. RaboResearch has changed its baseline forecast for the strait to remain closed until September and raised Q3 and Q4 oil price forecasts to USD 120/bbl and USD 100/bbl, respectively
.RaboResearch projects that global palm oil prices will remain elevated between 2026 and 2031, driven by rising food demand, expanding biodiesel use across Southeast Asia, and limited replanting of oil palm in Indonesia and Malaysia.Although global palm oil production is expected to increase over this period, total output is still likely to fall short of demand. The rollout of biodiesel mandates – particularly Indonesia’s B50 and Malaysia’s B15, plus Thailand’s push for B20 in addition to its B7 mandate – will further constrain export availability, tightening global supply.As a result, palm oil buyers may face ongoing sourcing challenges, while producers are likely to benefit from sustained price strength. Buyers will need to adopt strategic procurement approaches to manage risk and secure long‑term supply. At the same time, government policies and geopolitical developments will likely remain key sources of price volatility.
Here are the main highlights for some of New Zealand’s key commodities and economic influences this month. The full report provides an overview of the developments to watch in the upcoming weeks.
Dairy: Oceania dairy markets saw mixed price movements in May, with powder strength and weaker butter, supported by firm demand, strong New Zealand production, and a globally well‑supplied but moderating outlook.
Beef: Beef prices are stabilising at strong levels, supported by tight local supply and firm global demand, with record export values and constrained (global) production expected to underpin a generally positive winter outlook.
Sheep: Tighter Australian supply and firm global demand from a good market mix underpin a positive winter outlook for New Zealand lamb markets. Mutton also remains well supported.
Interest rates and FX: The RBNZ left the OCR unchanged at 2.25% in May, but it was a 3-3 split decision with Governor Breman’s casting vote as the deciding factor. The RBNZ sent strong signals that they expect to lift the OCR sooner rather than later, and we are now forecasting a 0.25ppt rate hike at the next meeting in July.
Oil and freight: Oil prices fell on peace hopes in late May, but the Strait of Hormuz remains mostly closed and a deal is proving elusive. RaboResearch has changed its baseline forecast for the strait to remain closed until September and raised Q3 and Q4 oil price forecasts to USD 120/bbl and USD 100/bbl, respectively.
World Farming Agriculture and Commodity news 1st June 2026
Recent trade policy changes are expected to influence global beef flows, but with limited short-term impact. New agreements between the EU and Mercosur, and Australia and the EU, improve market access but are unlikely to significantly boost volumes immediately. Meanwhile, renewed US access to China is tempered by limited supply, high prices, and quota constraints.
At the same time, global cattle prices rose in Q1 2026, while beef production continues to contract, down 2.5% year-on year and expected to decline further in 2026. Overall, tight supply conditions remain the dominant feature of the global beef market, with trade changes likely to shape flows gradually rather than drive near-term shifts.
Current geopolitical and energy market dynamics point to elevated inflation risk across the US food system. We expect mid-single-digit food inflation over the next 12 to 18 months, with baseline monthly ranges of 4% to 6% possible through 2027. The near-term catalyst is energy-driven cost pressure tied to the closure of the Strait of Hormuz, which indirectly pushes up fertilizer, packaging, and logistical costs.
Due to uncertainty around the timing and extent of cost pass-through, we express our inflation outlook as ranges. Hedges and longer-term contracts can delay when higher costs show up on shelves and in restaurants, so inflation not realized in one year often rolls into the next as contracts reset and inventories turn.
This analysis draws on our 2021 to 2022 inflation cost-stack work, “Project Radar,” which showed that food inflation can stay elevated even after commodity prices cool, and that pressures rotate across cost buckets, creating a more complex margin environment than a simple commodities cycle narrative suggests.
Against this backdrop, we expect US food inflation to enter a higher-volatility phase this year, led by energy markets and reinforced by fertilizer, packaging, and logistics costs. Energy matters not only because it raises direct operating costs, but because it lifts the cost floor across the entire system, from farm inputs to processing, cold chain, and distribution. This reinforces a cost-push dynamic that can persist as contracts reset and hedges roll off.
The key difference versus our 2021 to 2022 analysis is the consumer. With consumers having less financial cushion and increasingly bifurcated spending patterns – often described as “K-shaped” – companies’ ability to pass through rising costs is constrained. Lower- and middle-income households are more price-sensitive, accelerating trading down, private label substitution, smaller basket sizes, fewer discretionary add-ons, and a “barbell” shift toward trusted value or clearly differentiated premium products and brands.
For food and beverage companies, the main risks through this inflationary cycle are margin compression from constrained pricing power, volume losses that accelerate capacity utilization challenges, greater earnings volatility as input costs swing and timing mismatches emerge, and widening performance dispersion across channels, brand tiers, and income cohorts.
For companies operating in this environment, the priorities are clear: tighter risk management, stronger supply security, cost reduction, and disciplined pricing. Simplifying operations to build supply chain resilience is also critical. At the same time, companies may need to selectively accept some margin erosion to protect volumes, while continuously reassessing price elasticity to maximize profitability.
In December 2025, Karen Campbell of Glenrath Farms in Scotland faced a highly pathogenic avian influenza outbreak during an already difficult personal week. After managers reported high mortality in a shed, ministry vets confirmed the virus. What followed was weeks of culls, empty barns, paperwork, and daily government meetings, even on Christmas Day. The outbreak hit Campbell hard emotionally, with feelings of anger and loss of control. What troubled her most was that the virus showed up deep inside the barn near ventilation shafts, not at entrances where biosecurity measures were focused. This suggested contaminated footwear or vehicles weren’t the cause. At the World Egg Organisation conference in Warsaw, she argued that biosecurity has to be a 24/7 mindset, not just physical barriers. But she also pointed to the reality on her range, where thousands of pink-footed geese visit daily, asking how any farm could fully protect itself from that.Bryce McCory of Rose Acre Farms in the US echoed the same frustration. His company has endured six HPAI infections since 2015, despite heavy biosecurity investment: shower-in facilities, Danish entry systems, disinfectant pans, vehicle spray bars, lasers, and even inflatable tube figures to scare wild birds. Rose Acre also stockpiled cleaning supplies to deploy within hours of an outbreak. Yet the virus keeps returning. McCory noted that over 330 million wild birds migrate directly over US egg farms, with 80% of Rose Acre’s sites in high-traffic areas. Both producers told the WEO that biosecurity alone isn’t enough and the industry must push for vaccination. Campbell compared it to past breakthroughs with Newcastle disease and salmonella vaccines, asking why an HPAI vaccine can’t be next. The World Organisation for Animal Health’s 2025 report acknowledged vaccination could complement biosecurity and surveillance, but stressed it isn’t a universal fix and must be paired with strong monitoring. For producers who’ve already done everything on biosecurity, though, the conclusion was clear: vaccination and other defensive measures are needed alongside it.
The benchmark measure for world food commodity prices remained broadly stable in May, as declines in vegetable oil quotations offset increases in cereals and sugar, according to data released Friday by the Food and Agriculture Organization of the United Nations.
The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of globally traded food commodities, averaged 130.8 points in May 2026, down 0.2% from its revised April level and 2.9% higher than a year earlier.
"While global food commodity markets have remained broadly resilient, rising cereal prices underscore vulnerability to weather-related risks and disruptions in energy and input markets. Continued uncertainty affecting key trade routes, including the Strait of Hormuz, could reduce fertilizer use and place additional pressure on food prices, highlighting the need for coordinated international action," said Boubaker Ben-Belhassen, director of FAO's Markets and Trade division.
The FAO Cereal Price Index increased 2.6% from April and was nearly 5% higher than a year ago, reflecting higher prices across all major cereals amid higher fuel and fertiliser costs globally and weather-related pressures. World wheat prices rose 3.4% on the month — and 7.8% from their year-earlier level — supported by smaller expected harvests in major exporters, including the US, where winter wheat crop conditions are among the least favourable in decades. US Hard Red Winter wheat prices in May 2026 were 28% higher than in May 2025.
Maize prices rose 1.9% — 3.9% annualised — on the back of stronger import demand in key markets, tighter availability in Brazil and the US, and firmer energy prices that boosted ethanol-related demand. The FAO All-Rice Price Index increased 2.7% from the previous month as weather concerns and higher crude oil prices underpinned quotations in some leading Asian exporting countries.
The FAO Meat Price Index inched up 0.1%. World bovine meat prices rose on the back of robust import demand, particularly from China and the US, while pig meat prices declined, mainly due to lower prices in the European Union amid abundant supplies and subdued import demand.
The FAO Dairy Price Index declined 0.5% from the previous month, led down by international butter prices. Cheese prices were mostly stable while skim milk powder prices increased. Whole milk powder prices showed mixed developments.
