Two encouraging signals from the dairy industry this week underlined its strength as the backbone of the NZ export economy, all the more vital since the Covid-driven collapse of the international tourist industry.
First came news that prices strengthened at the latest Fonterra global dairy trade auction, with the average price reaching $US3157 a tonne. Prices for other products sold were mixed, with gains for butter and skim milk powder, but falls for cheese and other products.
Analysts said it was positive to see good, strong demand from China. The price of wholemilk powder which strongly influences the level of payout to Fonterra’s suppliers moved up 1.8% to $US3037 a tonne.
ANZ agri-economist Susan Kilsby said there had been some concerns that stocks may be building in China, so it was really positive to see good, strong demand from that market for the dairy industry. Continue reading “A2 Milk has lost some of its sharemarket gloss but has become a formidable dairy player with a bright outlook”
In all the concerns afflicting New Zealand business, none is more powerful than uncertainty generated by the “reviews” by assorted panels and working groups set up by the government.
PM Jacinda Ardern, in her speech to Auckland business leaders, spoke of how NZ needs to transition from growth dominated by population increase and housing speculation, to build an economy genuinely productive, sustainable and inclusive.
“First we want to grow and share more fairly New Zealand’s prosperity”.
So if NZ is no longer to rely on factors which (according to Labour’s analysis) achieved some economic growth during the years of the National government, where will the “genuinely productive” new elements spring from? Continue reading “Here’s hoping the advice on prosperity gels with the advice on fairness”
In an article at Newsroom Pro headed 8 things that mattered this week, business writer Bernard Hickey included interest rates and a flattening of the yield curve in the United States.
The yield curve is a line that plots interest rates over different maturity dates.
Longer-term interest rates normally are higher than short-term rates because lenders want greater compensation for locking their money up for longer periods, as Mark Lister explained in a recent newspaper article headed Is it time to panic about the sharemarket?
Lister, Head of Private Wealth Research at Craigs Investment Partners, said the relationship between short and long-term rates is important.
At the whiff of trouble on the horizon, investors will accept lower returns in the future, longer-term rates will fall below short-term rates (which are driven primarily by central bank policy) and the yield curve will become downward sloping, or inverted. Continue reading “Why we should be keeping an eye on the US yield curve”