Dairy data should delight Covid recovery monitors while discouraging industry detractors

Farmers  are   back in the  frame  as  the  backbone  of  NZ’s  export economy,  after the  Covid-induced collapse of  the foreign  exchange earning capacity  of the  tourist  and international education industries.  But  it  is not  only  the  rural  industries themselves which  are  scrutinising bulletins  on  the  prices  being  earned  abroad  for  commodities.  Those data have  become a  vital  item  for  New Zealanders eager  to  monitor the recovery of an economy  battered  by a  one-in -100  year  event.

This  week  the  ANZ  reported  its  world commodity  price  index   had  eased  0.2%  in September as lower dairy and meat prices were largely offset by stronger prices for logs and fruit.

In local currency terms the index fell 1.3% as the NZ$ strengthened by 0.6% on a trade weighted index  basis during  the  month.

Hard on the heels  of those figures came   the  results   of  the latest  Fonterra  global  dairy   trade auction  where  the   average  price   strengthened  to  $US3143  a  tonne  and  wholemilk  powder (which  plays a  significant  role  on  Fonterra’s payout to  suppliers)  rose  1.7%  to  $3041  a  tonne.

Volumes sold were about the highest offered in 2020 and the most bidders of the year showed up for the  auction. Butter, up 8.4% to  $US3561,  rebounded  from  the previous  auction. Continue reading “Dairy data should delight Covid recovery monitors while discouraging industry detractors”