Friday, 14 February 2020 10:44

Drought’s mixed effects on sectors

Written by  Staff Reporters
ASB senior rural economist Nathan Penny. ASB senior rural economist Nathan Penny.

Prolonged dry weather will have mixed effects on commodity prices, says ASB senior rural economist Nathan Penny.

For dairy, the drought will put upward pressure on prices as milk production will fall.

“Currently, we forecast 2019-20 production to be flat on 2018-19, but we are reviewing this forecast next week,” says Penny.

The big dry is already depressing lamb prices as farmers bring forward and increase slaughter of stock due to a lack of feed, putting more lamb on the market.

However, Penny says a hot summer can often boost production levels in the horticulture sector: this could see prices fall.

The Government last week declared an adverse event for Northland, where dry weather is causing feed issues for farmers.

Penny says other regions may soon see an official declaration too. 

“The Waikato, Bay of Plenty, Taranaki and the northern part of the South Island are also very dry. Moreover, weather forecasts show little sign of short-term rain relief in these areas,” he says.

In terms of commodity price impacts, the drought will have mixed effects by sector. For dairy, For meat prices, the drought is having a depressing impact as farmers bring forward or increase slaughter due to a lack of feed. Already, lamb prices have fallen more than they do normally at this time of year. Meanwhile, a 

More like this

Floods leave behind massive bill

The financial impact of the flooding which ripped through Southland in the first week of February is huge, says Southland Federated Farmers vice-president Bernadette Hunt.

Featured

 

Dry Dargaville ready to shine

The biggest issue facing organisers of next month’s Northland Field Days is water, says vice president Basil Cole.

» The RNG Weather Report

» Latest Print Issues Online

The Hound

No cameras?

This old mutt notes that it took the Cuddler-in Chief, PM Jacinda Ardern, a very long time to pay a…

Really?

A mate of the Hound reckons despite more farmers growing it and more hectares of hemp in crop these days,…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter

Popular Reads