Dairy buoyant
The Rabobank Rural Confidence Survey found farmers' expectations for their own business operations had also improved, with the net reading on this measure lifting to +37% from +19% previously.
This is what is forecast in Rabobank's December monthly update, which says a mostly stable outlook for farm input prices into 2024 will lift Christmas spirits.
For the dairy sector, the report says firm commodity prices and FOB powder prices have rallied more than 10% for the month on the back of less favourable milk production signals in New Zealand. Butter prices also firmed over the past month.
Meanwhile, for beef it says North Island bull prices are set to end the year close to the five-year average, with New Zealand Meat Board weekly slaughter numbers show a 1% general increase for the year to date.
"September saw beef export volume drop 7% YOY with export volumes dropping 15% to NZ$7.78/kg. Volumes to China were down 28% while US volumes were up 33%, reflecting the strength of the US market and their declining slaughter compared to the weak Chinese market."
Meanwhile, Rabobank reports for the first five weeks of the new season lamb production is up 3% on 2022/23 season numbers.
"Sheep meat export volumes for September increased 1.5% and while volumes to China were down 3%, with weak demand reflected in the lowest mutton retail prices since October 2019, US volumes were up 16% and UK volumes up 35% - two of the stronger markets in a weak trade complex."
It also points out that Australian lamb prices remain at some of the lowest levels since 2015 and with no signs of a strong recovery in the coming months. "NZ lamb prices have finally succumbed to the continuing high volumes of Australian product and weak demand in key markets, with prices dropping to their lowest level for this time of year since 2016."
Rabobank has stuck to its forecast of 5.5% being the top of the OCR.
"The upward forecast and expectations of rate cuts in the US sent the NZ dollar up 3 cents against the US dollar, which along with major exporting nations struggling with deflation should help lower the price of imported goods."
