McGrath Research | New South Wales Rural Market Report H1/26

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Research

H1/26 Rural New South Wales

Headlines FY26 agricultural output is forecast to fall 4.9% to $104.45 billion, driven by a 2.2% decline in livestock production and an 8.1% drop in crop yields.

Farming expenses in NSW are expected to remain elevated, driven by higher fuel, fertiliser and labour expenses.

Agricultural export values are projected to fall 8% to $79.32 billion, reflecting weaker export volumes.

Rural property sales across NSW trended 19% lower in 2025, and 22% below the five year average.

Average broadacre farm profits are expected to drop 70% in FY27, driven by weaker revenues and rising input costs.

NSW broadacre farmland prices fell by 9.4%, to stand at an average $7,686 per hectare at the end of 2025, although grew 39% over the past five years.

Economy Key drivers

H1/26

+3.2%

Economic growth

The global economy is estimated to have expanded by 3.2% in FY26, following 3.4% growth in FY25. Economic growth in Australia rose from 1.3% in FY25, to 2.3% in FY26. In FY27, global growth is forecast to be 3.3% higher, whilst in Australia, the economy is expected to rise by 1.8%.

Exchange rate

+5.0%

Inflation

Inflation was recorded in Australia at 2.4% in FY25. when the variable interest rate to large business in Australia was estimated at 5.70%. Inflation became higher in FY26 with an estimated change of 5.0%. The FY27 outlook for inflation is forecast to be 2.5%, when the interest rate to large business is likely to shift to 5.90%.

US$0.68

+1.4%

Population growth

Understanding the exchange rate is essential for exporters because it directly affects pricing, competitiveness and profitability in foreign markets. The Australian dollar (AUD) depreciated against the US dollar (USD) to be US$0.65 at the end of FY25, and was estimated to be US$0.68 in FY26. The AUD is forecast to reach US$0.72 at the end of FY27.

Australia recorded 1.6% growth in population in FY25, when compared to 0.9% globally. Australia's population is projected to grow 1.4% in FY26, then rise 1.2% in FY27. At these times, the global population is projected to be 0.8% and 0.8%, respectively.

Economic outlook

FY23

FY24

FY25E

FY26E

FY27F

Global economic growth, annual change

3.3%

3.4%

3.4%

3.2%

3.3%

Australian economic growth, annual change

3.1%

1.4%

1.3%

2.3%

1.8%

Australian inflation, annual change

7.0%

4.2%

2.4%

5.0%

2.5%

Interest rate to large business, variable rate

4.50%

5.80%

5.70%

5.30%

5.90%

Exchange rate, per AUD

US$0.67

US$0.66

US$0.65

US$0.68

US$0.72

Global population, annual change

0.5%

0.9%

0.9%

0.8%

0.8%

Australian population, annual change

2.5%

2.0%

1.6%

1.4%

1.2%

Source: McGrath Research, ABARES, RBA, ABS

2

Rural environment NSW

H1/26

Rainfall and water availability

Temperature

Rainfall across NSW has been mixed, with drier conditions in the north and better falls in the south supporting soil moisture. The potential development of El Niño increases the risk of reduced rainfall. Water availability remains constrained, with Murray-Darling Basin storage around 45%, limiting irrigation and placing pressure on agriculture despite recent rainfall offering only partial relief.

Temperature patterns in NSW are highly variable, with warmer-than-average conditions during summer and early autumn increasing evaporation and reducing soil moisture.

Cooler winter temperatures typically support crop establishment, but ongoing warmth can offset these benefits. Seasonal outlooks suggest a risk of continued warmer conditions, especially with potential El Niño influences, which may increase climate risk.

Bushfire risk

Farm expenses

NSW saw a warmer, drier autumn, with rainfall well below average. Rainfall in May wasn’t enough to shift broader deficits, leaving much of the state unusually dry and parts of northern NSW already in drought. Winter is also expected to be drier and warmer, lifting bushfire risk, particularly across northern, central and eastern NSW, with conditions likely to persist into spring.

Farming expenses in NSW are expected to remain elevated, driven by higher fuel, fertiliser and labour expenses. Input prices are forecast to rise further, increasing overall farm costs. At the same time, drier conditions may reduce production, tightening margins. These combined pressures are likely to weigh on farm profitability and limit income growth for producers.

Farm performance

Rural property prices

Agricultural conditions are set to soften in Australia, with FY26 output forecast to fall 4.9% to $104.45 billion, driven by declines in livestock production and crop yields. Export values are also expected to drop 8% to $79.32 billion, reflecting weaker volumes, while broadacre farm profits are projected to fall 70% in FY27 amid lower revenues and rising input costs.

NSW broadacre farmland reflects a more nuanced outlook, with values stabilising after strong gains, as grazing outperforms while arable land remains under pressure.

Transaction volumes have moderated, particularly for lowerquality assets. Nationally, Rabobank forecasts around 2% growth in FY26, signalling a shift to a weaker growth cycle, constrained by higher input costs, mixed commodity prices and tighter margins

Source: McGrath Research, ABARES, BOM, AFAC

3

Rural commodities Australian outlook

Cattle

H1/26

-3.4%

Australian cattle exported live, including all bovine for feeder and slaughter, breeding and dairy purposes had an estimated gross value of production 2.0% more in FY26 at $979.37 million, with an estimated 634,000 head of cattle exported. This is forecast to rise 0.9% at $988.05 million in FY27 with the export of 680,000 cattle. Cattle saleyard average price was estimated to rise 26.4% in FY26, to 771 cents per kilogram on carcass weight. These prices are forecast to decrease by 3.4%, at 745 cents per kilogram, based on the average of MLA's Heavy Steer and Processor Cow Indicators.

Sheep

-4.5%

Beef

Demand for beef was 17.4% lower in FY26 at 16.7 kilograms per person and this is likely to decline by 0.5% in FY27. The gross value of cattle and calf slaughtering production was estimated 29.6% higher in FY26 at $22.94 billion. The US import price for Australian beef is forecast at 750 US cents per kilogram in FY27, being down 4.5%. This was after recording a 20.1% increase for the cow 90CL cif estimated price, at 785 US cents per kilogram, in FY26.

-9.1%

+2.6%

Fisheries

Lamb meat consumption fell 18.1% at 5.04 kilograms per person in FY26 and is forecast to decrease 1.2% at 4.98 kilograms per person in FY27. The gross value of production was estimated at $1.50 billion in FY26 for lamb meat, sheep meat and sheep exported live including breeding stock. This is forecast to contract by 22.3% at $1.17 billion in FY27. Over this time, Australian lamb saleyard prices are expected to decline by 9.1% at 1,030 cents per kilogram on carcass weight, according to the MLA national trade lamb indicator.

The value of Australian fisheries production was estimated at $49.61 billion in FY26, sliding 0.8% on the previous year.

Prawns (+19.3%) and rock lobster (+18.1%) recorded the strongest change in production. In FY27, rock lobster (+10.5%) and salmonoids including trout and salmon-like products (+3.5%) are forecast to experience the greatest uplift in production, with an overall 1.1% change in fisheries products to total $3.92 billion. Exported seafood is forecast to grow 2.6% during this time at $1.69 billion, where rock lobster ($864.88 million) and salmonoids ($336.77 million) are expected to record the highest values.

Australian Outlook, change from a year ago

FY23

FY24

FY25E

FY26E

FY27F

Cattle saleyard prices

-15.7%

-29.6%

30.9%

26.4%

-3.4%

Beef import prices in the US

-13.2%

1.0%

19.1%

20.1%

-4.5%

Lamb saleyard prices

-14.8%

-19.7%

42.1%

36.5%

-9.1%

Fisheries total value of exports

14.5%

-2.4%

3.7%

11.4%

2.6%

Source: McGrath Research, ABARES

4

Rural commodities Australian outlook

Pigs

H1/26

+1.3%

Demand for pig meat was 1.5% weaker in FY26 being 24.4 kilograms per person and this is forecast to be 1.5% higher in FY27. Pig slaughtering production grew 5.5% to be estimated at a gross value of $2.13 billion in FY26. This is forecast to increase 4.1% in FY27 at $2.21 billion. Over-the-hooks prices were estimated to have grown by 4.0% in FY26, to be 455 cents per kilogram based on carcass weight, with 1.3% forecast for FY27.

Eggs

+4.0%

Poultry

The consumption of chicken meat equated to 54.8 kilograms per person in FY26 and this is forecast to be higher by 1.9% in FY27. The gross value of poultry slaughtering production, which includes chickens, duck, turkey plus other poultry rose 2.4% to be estimated at $4.25 billion in FY26. This is forecast to increase by 11.4% in FY27 at $4.74 billion. Over this same time, the export value of poultry meat is expected to be 4.0% higher at $153.26 million, following growth of 26.9% in FY26.

+3.5%

+3.1%

Dairy

Egg production in Australia continues to be reliant on stablity with incremental gains in output and being supported by efficient production systems. This market rose by 0.6% in FY26, reaching an estimated gross value of $1.40 billion, based on consumer demand and underlying input costs.

Looking ahead to FY27, egg production is forecast to increase by 3.5%, lifting the total value of approximately $1.44 billion.

The total number of milking cows across Australia is expected at 1.24 million in FY27 after falling 2.4% the year before. The estimated gross value of production for dairy, which includes cows milk, butter, cheese and both whole and skim milk powders was 1.3% higher in FY26 at $6.04 billion.

This is forecast to rise 1.4% to $6.13 billion in FY27. Australian average farmgate milk price growth is forecast at 3.1% to reach 75.8 cents per litre in FY27, after recording a 2.6% price increase in FY26.

Australian Outlook, change from a year ago

FY23

FY24

FY25E

FY26E

FY27F

Pigs over-the-hooks prices

6.8%

4.6%

10.5%

4.0%

1.3%

Poultry total value of exports

10.2%

10.5%

-16.1%

26.9%

4.0%

Eggs value of production

0.0%

0.0%

7.8%

0.6%

3.5%

Milk farmgate prices

31.5%

-0.5%

-3.7%

2.6%

3.1%

Source: McGrath Research, ABARES

5

Rural commodities Australian outlook

Coarse grains

H1/26

+5.0%

In FY27, consumption demand for corn is forecast to be 7.1% lower, whilst demand for barley is likely to be down 0.7%.

The gross value of barley production is expected to compress 10.8% at $4.50 billion, while sorghum production is likely fall 9.0% at $834.99 million. Malting barley prices were estimated to decrease by 3.0% in FY26, to $312 per tonne, whilst an increase of 5.0% at $328 per tonne, is forecast in FY27.

Oilseeds

+22.1%

Wheat

The weight of wheat demand globally was estimated to be 1.3% greater in FY26, whilst forecast 5.4% above this in FY27 with 864 million tonnes. Australia's gross value for wheat production in FY26 was estimated at $11.43 billion, growing 0.2%, whilst forecast to fall by 18.3% in FY27. Global wheat prices are forecast to be 22.1% higher in FY27 at US$315 per tonne, based on the indicator US no.2 hard red winter, fob Gulf. This followed a rise in FY26 of 1.2%.

+2.3%

+2.0%

Sugar

The global demand for oilseeds rose 3.2% in FY26 and is forecast in FY27 to rise by 3.1% to 715 million tonnes. Gross value of production in canola across Australia was estimated at $5.84 billion in FY26, after rising 20.1% during the year.

FY27 is forecast to see a change in canola production of -19.0% to total $4.73 billion. Australian canola average prices increased 0.4% in FY26 and were estimated at $762 per tonne. This average price (delivered Melbourne) is forecast to increase by 2.3% at $779 per tonne.

Global consumption of sugar is forecast to be up 0.5% in FY27 at 192.02 million tonnes. Sugar production in Australia was estimated at a gross value of $1.45 billion in FY26, which was 24.5% lower than the previous year. Production is forecast to increase 4.6% in FY27. In FY26, global sugar prices were estimated to fall by 20.8% to 14.7 US cents per pound based on the nearby futures price, Intercontinental Exchange (New York No.11) contract. The FY27 forecast is 2.0% higher at 15.0 US cents per pound.

Australian Outlook, change from a year ago

FY23

FY24

FY25E

FY26E

FY27F

Malting barley prices

13.2%

-8.1%

-6.4%

-3.0%

5.0%

Global wheat prices

-2.8%

-24.8%

-12.8%

1.2%

22.1%

Canola export prices

-20.0%

-8.2%

14.7%

0.4%

2.3%

Sugar global prices*

19.2%

-3.4%

-14.6%

-20.8%

2.0%

Source: McGrath Research, ABARES *Oct-Sep

6

Rural commodities Australian outlook

Horticulture

H1/26

+0.3%

The value of horticulture production was estimated at $18.80 billion in FY26, 2.5% higher than a year ago. By FY27, horticulture production is forecast to lift by 2.6%, to $19.29 billion. The value of horticulture exports is set to rise by 0.8%, to $4.41 billion. As a general trend, horticultural prices were estimated to have grown by 0.3% in FY26, with 0.3% forecast for FY27.

Wool

+0.7%

Viticulture

Total crush of wine grapes in FY27 is forecast to rise 4.2% with 1,250 kilotonnes. An estimated total value of Australian wine grape production was 35.8% weaker in FY26, at $609.5 million, whilst this is likely to pick up 1.8% at $620.8 million in FY27. Wine grape export prices were estimated to have fallen in FY26 by 7.4%, with 0.7% forecast in FY26 at $3.70/litre.

+11.9%

+8.7%

Cotton

The number of sheep shorn across Australia is forecast to fall 1.4% to 58.4 million in FY27. Total value of wool production was estimated to have grown by 22.2% in FY26, at $2.94 billion and is forecast to rise 6.2% at $3.12 billion in FY27.

Wool prices grew by an estimated 36.7% in FY26, according to the Eastern Market Indicator (clean equivalent) whilst forecast to increase by 11.9% to 1,780 cents per kilogram, in FY27.

Around the world, the uptake for cotton in FY27 is forecast to rise 1.3% to 26.5 million tonnes. Cotton production value was estimated to have declined by 17.4% in FY26, to total $2.54 billion, and this is forecast to decline by 30.1% in FY27. In FY26, cotton prices are estimated to rise by 1.2% to 80.54 US cents per pound on the Cotlook 'A' index. The FY27 forecast is 8.7% higher at 87.57 US cents per pound.

Australian Outlook, change from a year ago

FY23

FY24

FY25E

FY26E

FY27F

Horticulture prices

7.8%

-1.5%

2.3%

0.3%

0.3%

Wine grape prices

-7.8%

14.8%

8.7%

-7.4%

0.7%

Wool prices

-6.3%

-10.8%

0.3%

36.7%

11.9%

Cotton global prices

-23.1%

-9.3%

-13.4%

1.2%

8.7%

Source: McGrath Research, ABARES

7

Rural property sales Update

Rural property sales

H1/26

-19%

Rural property sales, by annual number Rural NSW

Rural NSW broadacre farmland transactions tallied 1,393 sales in 2025, a downward trajectory of 19.0% from the previous year. As a benchmark, over the past five years, the annual average was 1,785 rural property sales, whilst the annual average since 2005 has been 1,704 sales.

Source: McGrath Research, ABARES

Share of national rural property sales

39%

The NSW share of rural property sale transactions across Australia was 39% in 2025. This proportion of sales was higher than one year ago when the share was 33%, whilst higher than 21% recorded 20 years ago.

Share of national rural property sales, by number, 2025 Rural NSW Source: McGrath Research, ABARES

Rural NSW, 2025

Total Sales

Number of rural properties sold in past year

1,393

Change from a year ago

-19%

Change from 5 years ago

-31%

Change from 10 years ago

-31% Source: McGrath Research, ABARES

8

Rural property sales Update

H1/26

Major regions rural property sales

Rural property sales, by major regions Rural NSW

Across the five major regions in Rural NSW, the Tablelands region recorded the highest number of broadacre farmland sales in 2025 with 316 transactions. This was followed by Central West (311), Riverina (299), North West Slopes & Plains (272) and Coastal with 172 sales. Looking back over the past year, it was the region of North West Slopes & Plains which saw the best growth in the number of rural properties sold at 1.1%, then Coastal (-14.0%), Riverina (-21.1%), Central West (-21.7%) and Tablelands (-24.6%).

Source: McGrath Research, ABARES

Zoning rural property sales

Share of rural property sales, by zones Rural Australia

The wheat-sheep rural zone made up the largest proportion of broadacre farmland sales across Rural Australia with 53% (1,913 sales) in 2025. The rural zones considered high rainfall with 1,513 sales (42%) and pastoral with 110 sales (3%) made up the remainder. Back in 2020, the number of sales in the wheat-sheep zoning also led the tally (54%), followed by high rainfall (43%). The 3% of total share being pastoral zoned sales, has averaged less than 5% between the five year period.

Source: McGrath Research, ABARES

Rural Australia, Zones, 2025

High Rainfall

Wheat-Sheep

Pastoral

Number of rural properties sold in past year

1,513

1,913

110

Change from a year ago

-30%

-30%

-41%

Change from 5 years ago

-44%

-44%

-49% Source: McGrath Research, ABARES

9

Rural property prices Update

Average rural property price

H1/26

$7,686/ha

Change in average rural property prices Rural NSW, per hectare

Rural property prices across NSW fell by 9.4% in 2025 to average $7,686 per hectare. This was after growing by 39% over the past five years and over the past two decades, increasing by a total of 216%. Looking forward based on projected levels of production, commodity prices and the cost of finance, Rabobank forecast land value growth across Australia of 2% in 2026 as the base case outlook.

Source: McGrath Research, ABARES

Major regions rural property prices

Average rural property prices, by major regions Rural NSW, per hectare

In Rural NSW, the Coastal region recorded the strongest broadacre farmland average price across the five major regions with $10,852/ha in 2025. Riverina ($9,305/ha) followed, then Tablelands ($7,679/ha), Central West ($6,329/ha) and North West Slopes & Plains ($6,134/ha).

When benchmarked against 2024, it was the region of North West Slopes & Plains which saw the best performance despite falling 3.2%, then Central West (-7.9%), Tablelands (-10.6%), Coastal (-12.6%) then Riverina (-13.3%).

Source: McGrath Research, ABARES

Rural NSW, 2025

Average Price

Rural property average price/hectare

$7,686/ha

Change from a year ago

-9.4%

Change from 5 years ago

39.3% Source: McGrath Research, ABARES

10

Rural property prices Update

H1/26

Zoning rural property prices

Average rural property prices, by rural zones Rural Australia

Broadacre farmlands considered to be zoned high rainfall continued to achieve the highest average rural price at $12,114/ha in 2025, being 3.4% above the year before whilst 47% higher than back in 2020. Rural property prices in the wheat-sheep zone fell 1.0% throughout the year to be $8,015/ha at the end of 2025, whilst over the past five years prices have grown 71%. Pastoral zoned properties at an average value of $2,160/ha in 2025, were 59.6% higher in price than a year ago, whilst 169% more than back in 2020.

Source: McGrath Research, ABARES

Average rural property prices & annual rural property sales, by land use

Land use rural property prices & sales

Rural Australia

The average price for rural properties and the number of transactions varied significantly in the past year once land use was taken into account across Australia. Broadacre farmlands specialising in orchards recorded the highest average price at $40,217/ha with 149 sales in 2025, then by those with vineyards ($38,477/ha) and dairy ($26,998/ha) with 77 and 144 sales, respectively. Next, farmlands with sugarcane ($20,897/ha) followed with 50 sales, beef ($10,120/ha) with 407 sales and cropping ($9,891/ha) with a total of 329 transactions taking place over the same time.

Source: McGrath Research, ABARES

Rural Australia, Zones, 2025

High rainfall

Wheat-sheep

Pastoral

Rural property average price/hectare

$12,114/ha

$8,015/ha

$2,160/ha

Change from a year ago

3%

-1%

60%

Change from 5 years ago

47%

71%

169% Source: McGrath Research, ABARES

11

Definitions

Rural New South Wales Rural New South Wales (Rural NSW) refers to the area outside of ‘Greater Sydney’ or is the ‘Rest of State’ for NSW as defined by the Australian Bureau of Statistics, which are properties most suitable for agricultural purposes.

Gross Value of Production Gross value of production (GVP) refers to the total value of products produced on farms, measured at farmgate prices.

That is, the prices received by producers before any processing, transport, or retail markups.

ABARES The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), is the science and economics research division of the Department of Agriculture, Fisheries and Forestry.

Hectares All land area measurements in this report are expressed in hectares (ha) unless otherwise stated. One hectare equals 10,000 square metres, or approximately 2.47 acres.

Currency All monetary values in this report are expressed in Australian dollars (AUD) unless otherwise stated.

Guiding you home

Michelle Ciesielski National Head of Research, McGrath Research www.mcgrath.com.au/research

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