ASB Farmshed Economics Report

Friday, 17 October 2014, 12:02 pm
Press Release: ASB Bank

Media Alert: ASB Farmshed Economics Report
17 October 2014

Beef is back

•Beef prices hit record highs

•Small rise in dairy prices too little, too late

•Lower NZD is providing support for farmgate prices

Beef prices have hit new records according to the latest ASB Farmshed Economics Report.

“As we predicted in last month’s Farmshed, the beef boom has hit new heights and beef prices are currently 5% higher than the previous peak seen way back in September 2008,” says ASB Rural Economist Nathan Penny. “The US appetite for beef shows no sign of easing and, with the US herd at a record low, the high prices could stick around for a while.”

“On the dairy front, falling dairy prices took a breather, with a small lift at the October 15 auction. However, for our milk price forecast, it was a case of too little, too late. Following the auction, we revised our 2014/15 forecast down by 20 cents to $5.10/kg of milk solids, but did keep our long range forecasts unchanged.”

Meanwhile, the falling NZD is giving lamb a second wind, and lamb prices are likely to remain steady this season.

“On the currency front, the NZD’s decline is providing welcome support for farmgate prices and we expect the NZD to remain low. We now expect the NZD to finish the year at US$0.80, down from our previous estimate of US$0.85.”

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

The full report is attached and will be available online. If you would like to receive ASB updates and reports by email: https://reports.asb.co.nz/register/index.html

ENDS

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