Beef prices climb as supply contracts in key markets
With production volumes contracting in most major beef-producing regions, global cattle prices have continued to rise across recent months.
Last year's fourth quarter Rabobank Rural Confidence survey found New Zealand farmer confidence rebounding strongly off the back of improved dairy farmer sentiment, with farmers across all sectors more optimistic about the prospects for the agri economy.
Following an historic low in September, the survey — completed during the last two weeks of November 2023 — found farmer confidence up to a net reading of -47% from -72% previously. The number of farmers expecting conditions to worsen over the next 12 months dropped from 77% to 58%, while those expecting conditions to improve rose from 5% to 11%.
However, despite this sizeable uplift, farmer sentiment remains low overall.
A majority of primary producers still expect the broader agricultural economy to worsen over the coming 12 months, while those who expect conditions to remain the same jumped from 15% to 29%.
Rabobank senior agriculture analyst Emma Higgins said dairy farmers recorded the biggest lift in sentiment, largely down to strong GDT results pushing dairy commodity prices – and the farmgate milk price forecast – higher.
“With this morale-boosting lift in the Fonterra payout coming just after the close of the latest survey period there’s a strong likelihood that, if taken today, dairy farmer confidence would be even higher,” she explained.
“While we did still see government policy featuring as a reason for pessimism [26%], we’ve also seen it come through as a major reason for optimism [59%].
Several announcements from the new government – including the decision to increase the size of the Recognised Seasonal Worker (RSE) scheme and the launch of a new $1.2 billion Regional Infrastructure Fund – appear to have landed well with farmers.”
Higgins added that overseas markets/ economies and rising commodity prices were the other key reasons cited by farmers for an optimistic outlook.
Meanwhile, falling commodity prices and rising input costs continued were the two most regularly cited reasons for pessimism.
Farmers across all sectors were found to be more optimistic about the prospects for their own farm businesses, with 15% of farmers (11% last quarter) now expecting the performance of their business to improve in the year ahead. Some 46% expect it to worsen (67% previously) and 37% expect performance to remain the same (from 21%).
However, while sheep and beef farmers are also generally more optimistic, their confidence remains depressed at a net reading of -62%. With lamb prices falling to their lowest level for this time of year since 2016 and little to indicate an improvement in short-term prices.
Like many manufacturers around the world, European agricultural machinery and tractor manufacturers are currently operating in a difficult market environment. But they are heading to the world’s largest agricultural machinery event in Hanover next month with a degree of cautious optimism.
Established in 2021, the John Deere Technician of the Year Awards champion the important contribution parts and service technicians make to the Australian and New Zealand agriculture, construction and forestry industries.
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New Zealand is closer to eradicating bovine TB than ever before, but possums remain a threat, says Beef + Lamb New Zealand.
Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.
The ACT Party says media reports that global dairy giant Nestle has withdrawn from the Dairy Methane Action Alliance shows why New Zealand needs to rethink its approach to climate.
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