No easy ride for struggling sheep farmers
Stubbornly high farm input costs, a slow Chinese recovery and a flood of Australian lamb onto the global market are the main factors contributing to the tough times being faced by NZ's sheep farmers.
Demand for New Zealand dairy products should remain solid despite China’s mixed economic outlook, says Imre Speizer, Westpac.
He says China’s dominance as an export destination, particularly for whole milk powder, has been evident in official monthly trade data for some time.
Stats NZ figures for August confirm the trend of rising dairy export volumes since 2016, with China now importing about as much as it did at the previous peak in 2013.
Speizer says while the outlook for China’s economy is mixed, consumers are still buying dairy products.
“The outlook for China’s economy is mixed: over the remainder of 2019 we expect the pace of activity to slow further, but over the long term its various stimulatory initiatives should prove supportive.
“Against this backdrop, consumer activity has held up well, China so far successfully engineering a rebalancing of the economy towards domestic consumption.”
Last week’s Global Dairy Trade (GDT) auction also reflected increase demand from China.
The GDT auction resulted in little change to prices overall: the price index rose 0.2%. The key export product, whole milk powder, fell 0.2%.
But Speizer notes that the multi-month trend in whole milk powder prices remains positive, with a total gain of 5.8% since bottoming in July.
Prices overall have been fairly stable since June, the headline index now sitting at the three-year average. Whole milk powder at $3141 is slightly above the three-year average of $3060.
Westpac is maintaining its payout forecast at $6.50/kgMS. Fonterra’s payout price range remains unchanged at $6.25-$7.25/kgMS.
Futures markets for the milk payout are now pricing $6.85, up from $6.75 last month ago but about the middle of the $6.65-$6.95 range prevailing since June.
Federated Farmers claims that the Otago Regional Council is charging ahead unnecessarily with piling more regulation on rural communities.
Dairy sheep and goat farmers are being told to reduce milk supply as processors face a slump in global demand for their products.
OPINION: We have good friends from way back who had lived in one of our major cities for many years.
Listed Canterbury milk processor Synlait’s shares have been placed in a trading halt.
OPINION: Even before the National-led coalition came into power, India was very much at the fore of its trade agenda.
A step-by-step guide helping farmers through the process of creating a Freshwater Farm Plan (FWFP) has been launched by FarmIQ.
OPINION: A mate of yours truly wants to know why the beef schedule differential is now more than 45-50 cents…
OPINION: Your canine crusader understands that MPI were recently in front of the Parliamentary Primary Sector Select Committee for an…