Red meat sector battles on
It's a bloody tough year for sheep farmers, but the worst may be over, and the future looks optimistic.
Is China's appetite for dairy back on the rise?
Last week's Global Dairy Trade (GDT) auction saw an increase in Chinese demand for skim milk powder.
Westpac's Kelly Eckhold says this was interesting given weaker demand from China in hard commodities and oil.
"Chinese demand increased again - especially for skim milk powder. This is interesting given the generally weak economic data seen of late and weaker demand from China in hard commodities and oil. Westpac reduced its Chinese growth forecast for 2025 and 2026 this month to 4.5% for each year," says Eckhold.
He says conditions in the dairy sector continue to look positive.
"It remains to be seen how durable the recovery is given the uncertainties on Chinese growth and demand. However, interest rates are now falling which will further assist on-farm costs going forward," he says.
NZX dairy analyst Rosalind Crickett notes that whole milk powder (WMP) rose 1.5% to settle at US$3,448/t. Skim milk powder (SMP) also rose 2.2% to reach US$2,809/t, its highest average price on the platform in the last 12-months.
"Factoring market sentiment, the increased demand for both milk powders is not surprising - given the off-peak of milk production in the Northern Hemisphere combined with factors such as the bluetongue virus which has been increasing in prominence in both the UK and Europe."
Fonterra will announce its annual results this week and is expected to give an update on its forecast milk price for the season, currently at a mid-point of $8.50/kgMS.
Paddy Boyd, the new chair of Deer Industry New Zealand (DINZ), says his priority is to make sure deer farmers are engaged and provide them confidence to grow.
Last week's approval of a recapitalisation plan for troubled milk processor Synlait is good for Canterbury and gives farmer suppliers a lot of security going forward, says farmer Willy Leferink.
It's a bloody tough year for sheep farmers, but the worst may be over, and the future looks optimistic.
The outlook for dairy farms this season is better than anticipated.
North Island maize grain growers are facing an uncertain future in 2025 as the country's energy crisis hits the rural sector.
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