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

 

Competitive future for “unbroken” NZ dairy

Competitive future for “unbroken” NZ dairy – visiting global expert

New Zealand dairy is well placed to compete in the global market as prices begin to recover in the coming 12 months, a visiting global dairy specialist has told localproducers.

Tim Hunt, New York-based global dairy strategist with international agribusiness banking specialist Rabobank, says while current market conditions are “extremely tough” for many local producers, the New Zealand dairy sector is “unbroken” and has the fundamentals in place to enjoy a strong, competitive future in the global dairy trade.

In New Zealand for a series of presentations to Rabobank clients and industry stakeholders, Mr Hunt said the current cyclical price downturn had been made worse by a number of additional shocks – including the dramatic reduction of Chinese buying, the Russian trade ban and the removal of EU quotas – leading to the recent dairy market price crash. But the factors were in place to lead to a sustained price recovery, likely to begin in mid-2016.

“We are in the midst of a nasty downturn. But this is what it is – a very bad cycle, not a shift in the medium-term fundamentals,” he said.

“In the medium-term – looking out from the second half of next year – we continue to expect trade growth and profitable pricing in the dairy sector.”

And once that occurs, the expectation is New Zealand trade will again expand, with the local dairy sector well positioned to compete on global export markets.

“New Zealand dairy farmers are well placed to continue to compete well in international export markets – they are cost competitive, the New Zealand supply chain is low cost and effective and New Zealand has leading market access,” Mr Hunt said.

Speaking to local producers, he said while the current downturn was extremely painful for the dairy sector – particularly in New Zealand where prices had been hit far harder than those in other major dairy export markets – the “medium-term story” for dairy remained a positive one.

“In the next five years, the world economy is still widely expected to grow,” he said. “And there is ample headroom for dairy consumption growth in emerging markets, which a period of lower prices will help to fuel,” he said.

In addition, Mr Hunt said, these emerging markets – including China and South-East Asian countries – were still high-cost producers of their own domestic dairy, making imports more competitive.

Mr Hunt said Rabobank’s forecast was for international dairy trade to expand at a compound annual growth rate of 3.3 per cent, over the medium-term (next five years).

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>

ALSO:

Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>