Encouraging prices and weather boosting farm sector: MAF

Dec. 14 (BusinessDesk) – The best prices for sheepmeat since 1977, stabilising dairy prices and favourable spring weather all augur well for agricultural production, the Ministry of Agriculture and Forestry says in a six-monthly update to its annual Outlook publication.

Weaker than expected export prices for dairy, forestry, meat and wool have knocked forecast revenue for the year to March 2013 down by 3.5 percent, or $930 million, though MAF says commodity prices remain at “historically high levels”.

Meanwhile, climatic conditions over spring in New Zealand were favourable for milk production and lambing.

However, it warns the forestry industry can expect tougher competition in the Chinese market for unprocessed logs, as Russia is being forced to remove an export tax as part of its entry into the World Trade Organisation.

The star performer among agricultural products this year is lamb meat, which is fetching its highest inflation-adjusted price since 1977, although increased supply is expected to dampen prices over the next two seasons.

“The dairy sector faces a squeeze between increased supply from other major exporting countries and slowing demand from major importers such as China,” the MAF update says. “However, the sector’s expected total earnings, at $13.6 billion for the year to June 2012, will still be the highest to date.”

On the outlook for fisheries, MAF says the increased hoki quota and new legislation making aquaculture developments easier will underpin “modest” increases in output in the short to medium term.

(BusinessDesk)

BUDGET 2012:
Parliament Debate Live - Video Of Budget 2011
Keith Ng Interactive Graphic: How the Budget Breaks Down
BUDGET 2012 - FULL COVERAGE: Reports / Analysis - Press Kit - Reaction (from everybody) - Previews (from everybody) - Pre-Budget Announcements

Gordon Campbell: On the Budget’s Spreadsheet Victories

It wasn’t as if expectations were sky high, exactly. Chances are, it was always more likely that we’d be seeing Bigfoot rampage through the Beehive lock-up than catch a glimpse of a credible growth agenda from this government. More >>

Sludge Budget Report - Short The Dollar! MEMO: To international bankers FROM: C.D. Sludge Please short the dollar! It'll be good for both you and us. And you know you want to. Greexit, Eurogeddon... watch out... flight to quality and all that. Follow your instincts. The NZ Debt Management Office has been so surprised at the unprecedentedly low interest rates that it can borrow at that it has already entirely pre-funded the 2013 fiscal deficit - all $8 billion of it! More >>

Pattrick Smellie Comment: Doddling along the best we can hope forCriticising Budgets for lacking vision or imagination is like shooting fish in a barrel, but even so, this year's Budget again feels like a missed opportunity. Perhaps it's the intrusion of real world needs that means the government couldn't make better political use of the $558.8 million it expects to gather in its first partial asset sale. More >>