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ASB head of rural banking Aidan Gent is encouraging farmers to speak to their banks when they are struggling.
The latest ASB quarterly report suggests a more positive outlook for the primary sector compared with previous quarters.
It notes that prices for key commodities have rebounded and forecasts have been nudged upwards.
ASB economist Nathaniel Keall says the more bullish growth outlook has a lot to do with changing expectations around what monetary policy will do. He adds that markets have become more bullish that rates won’t need to move as high, and the global economy might manage the fabled ‘soft landing’.
The report notes that dairy prices have managed to rebound by about 22% since their lowest point earlier in the season, but are still around 30% below the peaks enjoyed the previous year.
Keall says the main feature of recent auctions has been the enduring absence of Chinese purchases. Over the past three months, the world’s largest dairy importer has purchased less than 40% of the whole milk powder (WMP) on offer at each auction, versus a historical average of 55-60%. “We’ve twice revised our 2023/24 milk price forecast since our last report. The recent uptick has also pushed our forecast for the 2025 season higher, to a fairly robust $8.30 per kgMS,” he says.
But while there are some sweeteners for the dairy sector, the report describes meat prices as looking “pretty crook” and notes that overall protein prices have been hit the hardest. Keall says this is driven by cost of living pressures with consumers reducing their meat consumption. He says this is likely to continue for a while yet.
“But pessimism around the global economy is no longer acute as it once was, so we are hopeful that meat prices will rise modestly as the season draws to a close.”
Two key factors remain a problem for the NZ lamb industry: The whopping 13% rise in Australian lamb production, which has led to an oversupply and a generally weak lamb market; and China, where growth still remains sluggish as the country tries to sort out its domestic economic problems.
New data released by LIC and DairyNZ shows New Zealand dairy farmers have achieved the highest six week in-calf rate and lowest notin- calf rate on record.
Christchurch City Council and the Canterbury Agricultural and Pastoral Association (CAPA) have signed an agreement which will open more of Canterbury Agricultural Park for public use while helping to provide long-term certainty for the A&P Show.
This year’s Fieldays will feature a Rural Advocacy Hub - bringing together various rural organisations who are advocating for farmers and championing their interests as one team, under one roof, for the first time.
ASB head of rural banking Aidan Gent is encouraging farmers to speak to their banks when they are struggling.
Hunters around the country are hoping for some foul weather this weekend with the game bird season getting underway.
Farmers have been airing their concerns to the Government over changes to the Accredited Employer Work Visa scheme.
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