Agri sector to lead economic recovery
OPINION: Over the past month, people up and down the country have been asking me what I think is in store for the Agri sector.
EXPORT COMMODITY prices, already down 9% on a mid-2011 peak, are tipped to slip further in the coming months as Europe deteriorates and Asian growth slows, says Westpac's latest economic outlook report.
But Westpac head of agribusiness David Jones says things should improve towards the end of the year.
"We are clear the commodity prices will come off," he told Rural News. "We will see a bit of the dip, but we are expecting a second half-of-the-year recovery.... When commodity prices come off the dollar comes off which actually helps put a bit of a buffer around the return to the farmer."
However, farmers can be at the mercy of how well the processors hedge the currency, he notes.
"If they get it wrong, you can have double dip pain which goes back to the farm gate."
Other markets stepping up production when commodity prices are high can also in turn bring those prices down, which has happened in dairy.
For most nations the domestic market dominates, but any surplus comes onto world markets and will soften the commodity price. "So it's a watching brief; you never know what's around the corner."
Climate issues also have a big influence on supply, but again New Zealand has an advantage in offering stable supply, particularly in dairy.
Sheep farmers are this year building up capital stock with the good grass growing conditions, after several years drought. That's constraining lamb supply.
But the European market is "doing it tough," he notes. "So the orders have dried up. But you also have an emerging market in Asia.
"That's slowed down – their bubble has burst – but that will correct in the second half and we will start to see them buying again. It's a hiccup."
Two butcheries have claimed victory at the 100% New Zealand Bacon & Ham Awards for 2025.
A Taupiri farming company has been convicted and fined $52,500 in the Hamilton District Court for the unlawful discharge of dairy effluent into the environment.
The Climate Change Commission’s 2025 emissions reduction monitoring report reveals steady progress on the reduction of New Zealand’s climate pollution.
Another milestone has been reached in the fight against Mycoplasma bovis with the compensation assistance service being wound up after helping more than 1300 farmers.
The Government’s directive for state farmer Landcorp Farming (trading as Pamu) to lifts its performance is yielding results.
The move to bring bovine TB testing in-house at Ospri officially started this month, as a team of 37 skilled and experienced technicians begin work with the disease eradication agency.
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