Domestic price of wheat feed

IBISWorld forecasts that the domestic price of wheat feed in Australia will decline by 9.3% to approximately $366.2 per tonne in 2024-25 compared to the previous year. As a global price taker, international supply and demand dynamics significantly influence Australia's wheat feed prices. The disruption of wheat exports from Ukraine due to the Russia-Ukraine conflict, which escalated in 2022, initially tightened global supply and elevated prices. However, the global market has adapted by increasing production elsewhere, notably in Russia and Argentina. Despite the ongoing conflict, Russia exported an estimated 53 million tonnes of wheat in 2023-24 due to favourable weather conditions, alleviating some global supply constraints. Argentina also experienced favourable conditions, boosting its wheat exports and contributing to increased global supply. These high global export supply conditions are expected to continue and contribute to Australia's declining wheat feed price in 2025.

The domestic price of wheat feed exhibits considerable volatility, primarily from supply and demand fluctuations driven by variable weather conditions. Demand for wheat feed increases significantly during periods of below-average rainfall, which degrades pasture feed quality, compelling livestock farmers to purchase additional wheat feed. This drives up demand and prices. Concurrently, low rainfall hampers wheat feed production, further exacerbating price increases. Conversely, favourable weather conditions enhance pasture quality, reducing wheat feed dependency and lowering prices.

Over the past five years, weather conditions have been mixed. From mid-2020 to the end of 2022, Australia experienced La Niña events, leading to increased rainfall, higher wheat yields, and generally lower wheat feed prices. However, global factors, including supply disruptions from the Russia-Ukraine conflict, counteracted these domestic effects, elevating prices in 2022 and 2023. In 2023-24, developing El Niño conditions led to reduced rainfall and higher temperatures in Australia, decreasing domestic wheat yields. Despite reduced domestic production typically leading to higher prices, the increased global supply from other countries – including Russia and Argentina - is expected to contribute to a price decline in 2024-25. Overall, IBISWorld anticipates that the domestic price of wheat feed will fall at an annualised rate of 2.7% over the five years through 2024-25, reflecting a combination of global supply adaptations and domestic production variations due to weather patterns.