The Main Report:Agri-Market Trends & Forecasts December 2011

The Main Report: Agri-Market Trends & Forecasts December 2011

The Main Report Editor’s monthly predictions based on observations of current trends and statistics

Cross Bred Wool: Prices have retreated over the past month by 10 to 15c/kg clean as the dollar’s value has fallen. Over the next few months prices are likely to remain within the same band as supply remains tight without the wool stockpiles to fall back on as was the case two years ago.

Fine Wool: The price gap between super fine and mid- micron grades has closed up to just $5 to $6kg with the prices for the two grades at $18 and $23/$24 a kg respectively. Look for the fine price edge to rise or the coarser grade to drop over the next few months but overall prices are expected to remain relatively stable.

Anhydrous Milk Fat: Prices are set to keep drifting downwards through to the end of April. Look for prices to firm through mid year with auction prices reaching $4205 a tonne for May 12 to June 12 up from $3549 a tonne for the February-April 12 period.

Skim Milk Powder: Prices should continue rising steadily over the next 6 months from $3268 a tonne in January through to $3509 for February 12 - April 12 reaching $3678 for May 12 - June 12.

Whole Milk Powder: Prices are set to ease slightly between January and the end of April from $3574 a tonne to $3557 a tonne before recovering slightly to $3664 a tonne between 12 May and 12 June.

Butter Milk Powder: Prices set to strengthen from $2980 a tonne in January through to $3285 by mid April.

Currency: The NZ dollar has been on a general downward trend as a result of the European debt crisis. Expect more fluctuation, and some spikes in the short-term as it returns to some sort of equilibrium.

Land Sales: Farm sales nearly doubled in the three months ended October 2011 compared with a year earlier with 286 properties sold. But the median average price increased only 6.7%. Grazing properties accounted for the largest number of sales with a 58.7 per cent share of sales over the three months and dairy properties 5.9%.

Interest Rates: The Reserve Bank is now not expected to lift rates until the end of 2012, which means a stable borrowing and savings environment in the medium term.

The Main Report Agri-Business Week: www.nzagri-business.co.nz

ENDS

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