increase font size
China’s sluggish economy is impacting on current prices for NZ dairy and meat exports.
Rabobank's September agribusiness report shows farmgate price pressure is expected to remain, with weak fundamentals underpinning difficult trade conditions.
It says dairy prices, hammered hard by August's low forecast price, are likely going to remain sluggish with slowed demand from China as its economy undergoes a rebalance. Global milk production is beginning to see signs of a slowdown ahead, NZ milk flow for the first two months of the 2023-24 season predicted to be 1.3% behind on tonnage basis and fewer cows with lower yields in the Northern Hemisphere are expected to see growth rates flatten or drop.
Following slips in July, farmgate beef prices started tracking upwards in August, with production values for all cattle categories close to last year's level. Rabobank says this is in line with seasonal trends, as slight changes in certain areas were generally offset in other areas.
Lamb prices stabilised throughout August but remain historically low. The report says demand from key markets is weak, with the average price for August 25-26% lower than the previous year. July sheepmeat exports were down 25% YOY.
However, lamb prices received in New Zealand (NZ$6.95/kg) remain significantly higher than in Australia (NZ$3.25-4.35). This is somewhat offset by larger Australian export volumes to China and a lower price providing tougher market competition.
The NZ dollar fell almost 3% in August as uncertainty over China's economy impacted the outlook for commodity exports. Rabobank says this makes the NZ dollar one of the worst performing major currencies over the period.
It says the slowdown in Chinese activity is being felt in many countries that send large numbers of imports to the country, with recent trade data showing a substantial fall in imports and a softening of manufacturing and service sectors.
Although the lower NZD could cause problems - as a weaker currency makes imports more expensive and potentially imports inflation - Rabobank does not predict any further increases to the official cash rate, saying figures point to the RBNZ leaving the OCR where it is.
More than 70 farmers from across the North and South Islands recently spent a dayand- a-half learning new business management and planning skills at Rabobank Ag Pathways Programmes held in Invercargill, Ashburton and Hawera.
A new Indonesian school milk programme is expected to significantly increase the country's total dairy consumption, creating opportunities for New Zealand and other global dairy players.
Twenty rural community hubs across New Zealand will receive $5,000 to upgrade their facilities having been selected as the winners of Rabobank's Community Hub Competition.
New Zealand is so far escaping the unpredictable vagaries of President Donald Trump's trade policies by the skin of its teeth.
The cost of producing milk in New Zealand continues to compare favourably with other exporting regions despite a lift in production costs over the past five years.
A significant breakthrough in understanding facial eczema (FE) in livestock brings New Zealand closer to reducing the disease’s devastating impact on farmers, animals, and rural communities.
Farmer co-operative LIC has closed its satellite-backed pasture measurement platform – Space.
OPINION: The case of four Canterbury high country stations facing costly and complex consent hearing processes highlights the dilemma facing the farming sector as the country transitions into a replacement for the Resource Management Act (RMA).
The 2024-25 season apple harvest has “well and truly exceeded expectations”, says Apples and Pears NZ chief executive Karen Morrish.
Through collaborative efforts with exhibitors, visitors, and industry partners, Fieldays says it is reaffirming its commitment to environmental responsibility with new initiatives for 2025.
Fonterra has announced a record forecast opening organic milk price of $12.30/kgMS for the new season.
