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”
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”
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”