Wool growers, too, have something to cheer about as dairy leads the charge in brightening farmers’ prospects

City dwellers,  preoccupied by  Covid,  may not  have  observed  that the  country’s export  economy is  being  sustained  by   its  primary  industries.  Last  week  came  the  news that  Fonterra had  signalled a  record payout to its suppliers, pumping  $13.2bn into the  regions.

Some analysts think that may be on the conservative side and  the final payout will surpass  $9kg/MS.

In  any  case,  the  ANZ commodity  price index lifted  2.8%  in November,  pushing  it into new  territory.  The  bank’s economists, noting that dairy prices  led the   charge, reported they  were  supported  by strong  gains  in  meat.

Again,  because  of the  preoccupation with the pandemic,  it may have  gone  unnoticed that meat  exporters achieved record returns  in the season ended in September. Total export receipts for beef and sheepmeat  equalled the record returns of 2019–20 and were 17% up on the five-year average.

Beef export volumes reached a record high in 2020–21, up 8% on 2019-20 and 16% up on the five-year average. The high volumes reflected the  numbers of steers and heifers processed.

The higher volumes were easily absorbed by strong consumer demand and tighter global beef supply.

Lamb export volumes in the 2020–21 season were about the same as in the previous season and the five-year average. The average export value was 4% down on the record high of 2019–20, but 8% above the five-year average. Continue reading “Wool growers, too, have something to cheer about as dairy leads the charge in brightening farmers’ prospects”

Lift in commodity prices gives boost to the economy – here’s hoping we can keep on shipping our goods to market

New Zealand’s Covid-battered  economy  is  once  more sustained   by  its  primary  industries, as  international tourism languishes  and  earnings  from  its  international education arm are  all  but  invisible.

Despite  high  charges    for   shipping,     an  exchange   rate stronger  than   exporters  would  like   and  (some  would  say)  a  government   which  does  little  to  encourage  farmers, output  from the  rural  regions   is   again pumping  the  lifeblood   into   an  economy  which might otherwise be  gasping for air.

News  from  the  ANZ  this  week indicated  its  World Commodity Price Index lifted 1.5% in September, partially unwinding the previous month’s fall. The lamb sub-index is now at a record level, driven by stronger prices for all cuts.

ANZ Agri Economist Susan Kilsby reported dairy and forestry both regained some ground and aluminium and meat prices  were strong. Continue reading “Lift in commodity prices gives boost to the economy – here’s hoping we can keep on shipping our goods to market”

China’s growth is a key factor in lifting returns from NZ’s major exports

New Zealand’s producers of  major exports  have  been  earning  the  country record returns   in  foreign  markets.

It’s  the  news which  should  buoy  the whole country after  such a  tough  year.

ANZ’s monthly commodity price index rose 6%  in March on February, and  is 20% higher than a year ago,  to  peak  at its highest point since it was started in 1986.

Standing out has been the strength of global dairy prices, which gained 12.7% in March, the highest in seven years.  Returns  for whole milk powder, a key driver  for Fonterra’s suppliers, were 43%  higher than last year.

ANZ’s agricultural economist Susan Kilsby said:

“Dairy prices are currently being supported by strong global demand, combined with a steady milk supply in the main dairy-exporting nations”.

Meat was close to a one-year high, while logs and aluminium were sitting near two-year highs.

The common feature of the strong prices and demand was China, which was growing more strongly than most economies after the pandemic, Kilsby said. Continue reading “China’s growth is a key factor in lifting returns from NZ’s major exports”

Phil fronts up for action on nuclear disarmament while colleagues prepare our Covid-19 defences during the summer

Our attention has been drawn to the former Minister in charge of Kiwibuild taking action – of sorts – as Minister in charge of governmental efforts to secure us against the threat of nuclear war.

We were alerted by an announcement that Pacific nations  came together yesterday under the auspices of the Treaty of Rarotonga “to ramp up diplomatic efforts for nuclear disarmament”.

The statement came from Phil Twyford as Disarmament and Arms Control Minister after he had taken part in a virtual inaugural meeting of Treaty parties.  He described the Treaty of Rarotonga as the Pacific’s nuclear-free zone and a useful region-wide platform for pushing the anti-nuclear cause.

Comforting news came, too, from Finance Minister Grant Robertson, who said the Government is putting in place support for affected businesses in case there is a resurgence of COVID-19.

More generally, COVID-19 response Minister Chris Hipkins outlined extensive All of Government planning in the event of a community case of COVID-19 during the holiday period.

Readers with an interest in the country’s economic wellbeing, meanwhile, were cheered by the latest Situation and Outlook for Primary Industries report which forecasts food and fibre export revenue of more than $47.5 billion for the year ending June 2021, and a record $49.2 billion the following year.

Among other statements: Continue reading “Phil fronts up for action on nuclear disarmament while colleagues prepare our Covid-19 defences during the summer”

Strong dairy receipts help lift the primary sector’s export growth – and its boost to the economy

The Covid-19  pandemic has  put  enormous  pressure  on  the country’s  primary  sector,  yet it  has  managed to  expand  export  receipts  by  $1.7bn  over  the previous year.

The  government,  or  at   least  several ministers  in it, are  celebrating  the  effort  of  the  primary sector  in  doing so,  and   recognise  the  sector  is a  key  driver  in rebooting  the  economy.

Yet  the  government,  with   its climate  change  measures  hitting    agriculture’s methane  emissions  and  its freshwater  reforms, has  done   little to  encourage  farmers to  expand  production.

When  Agriculture  Minister  Damien O’Connor says the government is focused on creating more demand, pursuing greater market opportunities to generate higher export returns and growing rural communities with new jobs,   the  response  down on the farm may be   no more than a  one-handed  clap.

Farmers  are  more  likely  to  be   grumbling  over the   government’s failure   to  drive down the  exchange rate.  Or  to do  more to build irrigation  schemes. Continue reading “Strong dairy receipts help lift the primary sector’s export growth – and its boost to the economy”

Food producers can do without the green shackles when they are driving the post-virus economic recovery

What’s  to   celebrate in the  wake of   the crushing  blow  to   the  economy  delivered   by the Covid-19   pandemic?

Certainly it’s a relief    NZ  has emerged  less  scarred  than other  countries.  Whether the country absorbed   more   economic  pain  than  was necessary will be   debated fiercely.

As   ministers   begin  the  search  to  fill  the economic hole left  by the  collapse of the  tourist industry  and  by  permanent  damage – perhaps –  to sectors like international education,  PM  Jacinda  Ardern  says  she  wants “specific” and “ specially designed” initiatives for  different  industries.

Finance  Minister  Grant  Robertson,  in  talking  of  the  government’s  “strong recovery plan”,   says all ministers have been tasked  with reaching out  to their sector to help develop this plan. Deputy  PM  Winston Peters believes  the  fragility of the highly  interconnected  global  economy has been exposed, and  NZ  must become more  self-reliant. Continue reading “Food producers can do without the green shackles when they are driving the post-virus economic recovery”