Scoop Business

ASB Farmshed Economics Report

Friday, 17 April 2015, 10:03 am
Press Release: ASB Bank

17 April 2015
Up, down and sideways

Drought’s hit on dairy production not as bad as first feared
Beef prices on the up and lamb prices may not be far behind
NZD strength a headwind for farmers

April is shaping up as a mixed bag, according to the latest ASB Farmshed Economics Report, with dairy, in particular, experiencing ups and downs recently.

“The recent drought just hasn’t packed the punch on dairy production we were expecting,” says ASB’s Rural Economist Nathan Penny. “We now actually expect nationwide dairy production to be up one percent compared to last season. That said, this extra milk sees dairy prices heading back down towards last season’s lows.”

“The recent price falls are probably too late in the season to impact our $4.60/kg milk price forecast, however next season could possibly bear the brunt of this, so we are watching our 2015/16 season forecast of $6.20/kg closely.”

Lamb prices look like they are on the turn after prices fell over 20 percent between November last year and March. “Tightening local supply will most likely lead to improving prices along with a possible pick up in Chinese demand later in the year.”

Strength is also returning to beef prices with a 5 percent lift over the last month, driven by firm demand from both the US and Chinese markets.

Also, the NZD has hit fresh highs against both the Euro and AUD this month.

“While the looming NZD/AUD parity is great for consumers, it’s not as great for farmers. The strong NZD makes NZ exporters less competitive compared to their Australian counterparts.”

ENDS

Advertisement - scroll to continue reading

ASB Bank

Helping you get one step ahead.

In 1847, ASB opened as the Auckland Savings Bank with the pledge: 'to serve the community; to grow and to help Kiwis grow'. And that is very much what ASB is about today.

ASB is a leading provider of integrated financial services in New Zealand including retail, business and rural banking, funds management and insurance.

ASB strives to consistently provide its customers with outstanding service and innovative financial solutions. They're dedicated to providing simple financial products that allow their customers to bank with them how and when they want.

We all have our own ways to measure progress, and our own stories about the things that matter to us. Whatever way you choose to measure progress, and whatever your goals, ASB is there to help you get one step ahead.