Australia’s Agricultural Market in 2025
Australia’s Agricultural Market in 2025: Navigating Challenges and Embracing Opportunities
As we move through 2025, Australia’s agricultural sector finds itself at a critical juncture. Climate extremes, shifting global markets, and domestic policy decisions are reshaping the landscape, yet innovation, export resilience, and technological advancements continue to push the industry forward.
Economic Outlook: Production and Export Performance
Australia’s gross value of agricultural production is forecast to decline by 2.8% to $90.7 billion in 2025–26, primarily due to reduced livestock and crop output (Mirage News, 2025). Despite the drop, the combined value of agriculture, forestry, and fisheries is expected to reach $97.5 billion, marking the third-highest on record.
Export earnings are also projected to dip by $2.6 billion, settling at $71.7 billion, with downturns in meat and grain exports. However, when including fisheries and forestry, total export value could still hit $76.7 billion, underscoring Australia’s ongoing strength in global agri-trade.
Climate Pressures: Floods, Droughts & Recovery Efforts
Australia continues to face contrasting weather events. Flooding in New South Wales and drought conditions in South Australia and Victoria have disrupted farm operations, especially in the dairy sector, where rising costs and reduced supply are expected to push milk and butter prices higher (News.com.au, 2025).
In response, the Federal Government has announced a $2 million drought relief package, alongside plans to host the National Drought Forum in Gawler, South Australia, later this year. The forum will gather farmers, industry leaders, and policy makers to explore long-term drought resilience strategies (Adelaide Now, 2025).
Commodity Breakdown: Sector-Specific Trends
Dairy
Despite climate headwinds, the dairy industry retains strong fundamentals. Ongoing demand and relatively stable production practices make it one of the more resilient agricultural subsectors (Farm Online, 2025).
Meat
Prices for beef and lamb are on the rise, driven by tightened supply chains and robust export demand. In contrast, pork and poultry prices are expected to remain steady, offering more affordable protein options to domestic consumers (News.com.au, 2025).
Grains
Grain growers had a strong 2024–25 harvest, exceeding last year’s output. However, low soil moisture levels in parts of Victoria and South Australia could affect planting conditions for the next season (Rabobank, 2025).
Innovation & Sustainability: The Tech-Driven Farm
Technology is fast becoming the backbone of Australian farming. A notable example is the AgriBusiness Connect and Ericsson 5G partnership, which is enabling real-time data collection, automation, and precision farming solutions (Expert Market Research, 2025).
Meanwhile, a growing number of farmers are adopting regenerative agriculture practices, using drones, AI-driven analytics, and moisture sensors to improve crop yields and manage resources more efficiently.
Long-Term Investment
Labor shortages persist across farming and processing sectors, putting pressure on productivity and increasing operational costs (News.com.au, 2025).
Still, investor confidence remains high. The Australian agriculture market, currently valued at AUD 336.54 billion, is expected to grow at a CAGR of 8.3%, reaching AUD 747 billion by 2034 (Expert Market Research, 2025). This growth is driven by innovation, export expansion, and rising food demand across Asia.
Final Thoughts
The 2025 outlook for Australian agriculture is one of resilience amidst challenge. While climate volatility and labor constraints pose real risks, advancements in agritech, sustainability, and market diversification are creating pathways for continued growth.
As industry leaders, farmers, and policymakers come together at events like the National Drought Forum, the sector will continue adapting, ensuring it remains a cornerstone of the Australian economy for years to come.