Australian farm exports have so far sailed relatively smoothly through the global coronavirus storm but new waves of infection pose dangers to world economic recovery.
In its July agribusiness and Covid-19 update, Rabobank Australia said sharp lifts in coronavirus cases would slow recovery in the United States which would continue to weigh on export prices for our beef and lamb.
Infection rates had also been rising again in key markets like China, Japan and parts of Europe.
Rabobank doesn't expect the Chinese foodservice sector will recover post-Covid sales until September while the US foodservice sector will struggle for longer.
The US meat processing sector had recovered from the impact of Covid-19 outbreaks in key abattoirs which would put downward pressure on import beef prices, Rabobank said.
As well, jittery Chinese officials had blocked imports from meat plants around the world hit badly by Covid-19 after an outbreak of infections at a Beijing wholesale food market.
Rabobank said there was no scientific evidence Covid-19 could be spread in meat.
The bank said weakening demand for both sheep and cattle in Australia had been offset by lower livestock turn-off because of restocking and the ongoing impact of African swine fever on Chinese pork production.
Restockers have helped push beef prices into rarefied air and Rabobank doesn't expect much to change on the back of good seasons and ongoing strong demand from China despite higher tariffs.
Exports to China rose six per cent in May despite a sharp fall in production which triggered 12pc falls to shipments to both Japan and the US.
Rabobank said restocker demand for sheep appeared on the wane after lamb prices took a tumble in June.
The Eastern States Trade Lamb Indicator price fell 15pc during the month to $7.86 a kg carcase weight.
Lamb exports have continued to track down because of lower production, sliding 39pc year-on-year in May. Shipments to China were down 22pc, the Middle East 50pc and the US 33pc year-on-year.
The wool market is tipped to start recovering in August as rising retail apparel, notably in China, push up demand.
China completely dominated the Australian wool market in May, taking 92pc of total exports of 17.9 million kg, down 27pc year-on-year.
Total wool tested for 2019-20 was 1.65m bales, down 7.4pc.
Rabobank said Australian grain export prices would remain under pressure with global production expected to exceed 2.2 billion tonnes in 2020-21.
Meanwhile, a recovery in national milk production continued to gather strength through better seasonal conditions and healthy market signals.
The story Australian export ag navigates coronavirus storm - so far! first appeared on Farm Online.