Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


ASB Farmshed Economics Report: Dairy prices reality check

18 July 2014

ASB Farmshed Economics Report: Dairy prices get a reality check

• Rapid dairy price fall proves surprising
• Meat markets’ good health continues
• NZD approaches record high

This week’s slide in dairy prices was a surprise and has emphasised just how exceptional the recent season really was, according to the latest ASB Farmshed Economics Report.

"Ten of the last twelve dairy auctions have now recorded overall price falls, with prices down by around a third compared to the same time a year ago,” says ASB Rural Economist Nathan Penny. “An exceptional production season in New Zealand and strong production seasons globally, as well as high dairy stocks in China, have combined to push milk prices much lower than we expected.

“We have revised our forecast down and are now expecting a milk price for the 2014/15 season of $6.20/kg of milk solids. However, if the current trends of a soft prices and a strong NZ dollar continue, there is a possibility that we could be heading towards a price of below $6.00/kg.”

Conversely, the outlook is more optimistic for lamb and beef markets with lamb prices rising 9 percent over the last season and beef prices over the last month averaging 5 percent higher than the same time a year ago.

“While lamb markets take a breather over the Northern summer, we expect lamb price increases kick back into gear as we get closer to Christmas.”

Also over the last month, the NZ dollar got within striking distance of its record high against the US dollar, despite the overall weakening in export prices.

“Support for the NZ dollar from New Zealand’s relatively optimistic economic and interest rate outlook has dominated the impact from the recent fall in export prices. And with the Reserve Bank likely to raise the OCR again later this month, for now, we expect the NZ dollar to remain stubbornly high,” concludes Mr Penny.

Click here for the full report.

About Farmshed Economics
Farmshed Economics is a monthly report that gives ASB’s economic take on recent rural developments and includes our outlook for rural commodities and the relevant financial markets. The full report is attached and is available online.

Each quarterly Farmshed Economics will have a special feature on a relevant topic.

If you would like to receive ASB updates and reports by email: https://reports.asb.co.nz/register/index.html

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

OECD And Zero Carbon Reports: Environmental Pressures Rising In New Zealand

New Zealanders enjoy a high environmental quality of life and access to pristine wilderness. However, New Zealand’s growth model, based largely on exploiting natural resources, is starting to show its environmental limits with increasing greenhouse gas emissions and water pollution ... More>>

ALSO:

Statistics: Record Net Annual Migration Levels Continue

In the February 2017 year, 71,300 more migrants arrived in New Zealand than left, Stats NZ said today. This equalled the previous annual record set in January 2017. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news