Slower but not much lower - that is sluggish economic growth but with little likelihood of interest rates dropping.
This is the outlook for the big global economies that affect Australian agriculture, as both customers and competitors, from prominent agribusiness lender Rabobank.
Senior market strategist Ben Picton, speaking at a knowledge sharing lunch hosted by Rabobank at the Royal Queensland Show in Brisbane, said the silver lining, however, was interest rates should not go much higher either.
He presented a overview of the economies of China, the United States and the European Union, which pointed to a mixed bag of both opportunity and risk for key farming commodities, particularly beef.
China deflation
In China, arguably the most important nation to the economic fortunes of Australia, the struggle is in deflation rather than the inflation woes being faced elsewhere.
This was partially due to harsh COVID lockdowns with no social security, unlike the west. That was only rolled back last December, Mr Picton said.
China has set a modest growth target for this year of 5 per cent.
The 'reopening boom' - widely touted in the beef industry as having big potential to ramp up demand for high-end Australian product - was mainly contained to the services sector. It was already fading out.
Mr Picton said stimulus was now coming from the Chinese government and central bank, with interest rates being cut, and there was a firming demand picture from China in the next six months.
US resilience
In the US, interest rates have been pumped right up in a bid to get high inflation under control.
"We are now seeing inflation is dropping quickly," Mr Picton said.
Rabobank believes rate rising has finished in the US.
"We've been expecting for some time a recession in the US but it hasn't happened," Mr Picton said.
"Economic data continues to surprise to the upside. The labour market has been incredibly strong and we've seen growth happen faster than forecast."
Australian beef export data for July shows volumes to the US were up more than 100pc. Talk of a US lack of supply as their herd shifts into rebuild has excited beef exporters who know that will mean big gaps to fill on the global market, particularly in high value markets like Japan and China, but also in the US itself.
EU in technical recession
The European Union, heavily affected by the war in Ukraine which pumped up energy prices, was now in a technical recession, Mr Picton reported.
EU countries had to find alternative energy sources to Russia.
An unseasonably warm winter and quick action to secure new natural gas supply softened the blow of the war but prices are still much higher than normal.
Germany was effectively de-industrialising - suffering the extra assault in the way of competition from China - and the overall outlook is very challenging for Europe.
Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
