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”

Farmers may not get much from the Budget but prospects are looking good in export markets

The agriculture sector may not get the recognition it deserves in this year’s budget, nor much assistance along  the  road  to  reducing  methane emissions — but  at  least farmers  can take  satisfaction (as New Zealand  emerges into  the  post-Covid  era)  that  returns   for the  bulk of the  sector’s output  have  been  strong.  The prospects are that high prices for  most products will be  sustained  next season.

The latest  Global  Dairy Trade  auction this week saw prices  easing  slightly—but  for  the product  that bears  the  greatest influence  on Fonterra’s  farmgate milk price, whole milk powder, it is still 54%  higher  than  at this time  in the  previous season.

Analysts are confident it will stay around that  level next season.

The other encouraging sign for primary producers  is  that  prices  in the  meat  sector  are  buoyant.  This  week  Westpac lifted its farmgate lamb forecast to at least $8/kg, and sees it possibly rising to over $9. Continue reading “Farmers may not get much from the Budget but prospects are looking good in export markets”

A2 Milk has lost  some of its sharemarket  gloss but has  become a formidable  dairy player with a bright outlook

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”