$150B farm succession challenge looms for NZ agriculture
Within the next 10 years, New Zealand agriculture will need to manage its largest-ever intergenerational transfer of wealth, conservatively valued at $150 billion in farming assets.
Softer whole milk powder (WMP) prices are not surprising given China’s strong import activity recently and the steadily increasing WMP pricing, says Rabobank dairy analyst Emma Higgins.
“We have been expecting China’s import growth to seasonally slow, combined with our expectation that inventory pipelines are full,” Higgins told Dairy News.
She was commenting on the final GDT Event last week for the 2018-19 production season. The GDT price index dropped 1.2% to US$3414/tonne. It ended a good run of 11 positive GDT Events since December 2018, says Higgins.
WMP prices moved lower by just over 2% to US$3180/t. Skim milk powder saw a small lift of 0.5% to US$2529/t.
“This was a good result given that more SMP was on offer for this GDT Event by 17% on prior forecasts and the last GDT Event. Oceania SMP prices are leading international prices, with NZ product retaining a premium over both European and US product.”
Fats dived. AMF results were lower by 1.4% to US$6140/t. Butter was softer by 3.2%, landing at an average price US$5297/t.
“Despite this, Oceania butter is still priced ahead of US and EU product. Part of the recalibration of fat prices seen in this GDT Event comes down to the affordability of European product compared to Oceania butter, in particular.
“The other factor is that the northern hemisphere season is well underway, with reports of improved milk flows from earlier in the year….
“We are moving into the quieter months for NZ production and therefore fresh product for the GDT. Any major price movements over the next GDT Events will be influenced by the urgency of buyers looking to obtain product over NZ’s seasonal hiatus period.”
She notes EU milk production for March 2019 was higher by 1.1%. This brings total EU milk production for the first quarter 2019 to a small decline of -0.1% year on year.
BNZ senior economist Doug Steel says the small decline at last week’s event was in line with expectations and “fits with our broader view that prices will drift lower over coming months”.
“Not all prices fell. Cheese bucked the trend with a massive 15.2% gain [from already elevated levels] and casein prices also rose strongly,” he notes.
Profitability issues facing arable farmers are the same across the world, says New Zealand's special agricultural trade envoy Hamish Marr.
Over 85% of Fonterra farmer suppliers will be eligible for customer funding up to $1,500 for solutions designed to drive on-farm efficiency gains and reduce emissions intensity.
Tighter beef and lamb production globally have worked to the advantage of NZ, according to the Meat Industry Association (MIA).
Groundswell is ramping up its 'Quit Paris' campaign with signs going up all over the country.
Some farmers in the Nelson region are facing up to five years of hard work to repair their damaged properties caused by the recent devastating floods.
Federated Farmers is joining major industry-good bodies in not advocating for the Government to withdraw from the Paris Agreement.
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