Agri Focus

ANZ Agri Focus is a bi-monthly overview of developments in the rural sector, combined with research on topical issues.

Written by ANZ’s Rural Economist, ANZ Agri Focus typically includes feature articles on current topics, a review of the past month and the rural property market. ANZ Agri Focus also includes information on key commodities and financial market variables along with an economic backdrop and information around borrowing strategies.

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2021 editions

October 2021: Scaling new heights

Rising global food prices bode well for export returns, but inflation is pushing up the cost of production. The supply of many commodities is very tight so we could see commodity prices reach new heights. We are forecasting average farmgate returns for beef and for sheep meat to be at record levels this season.


August 2021: Springing into action

Warm winter days make it feel like spring is already here. The improved conditions for pasture growth are certainly welcome, particularly in the regions that were hit hard by drought in the autumn. Also running hotter than expected is New Zealand’s economy. Very strong measures for both inflation and employment mean it is time for the Reserve Bank to spring into action with tighter monetary policy.


June 2021: When it rains it pours

Feed supplies across New Zealand are becoming increasingly tight as we head into the colder winter months. The extensive flooding in Canterbury has caused massive damage to farms and wiped out a lot of winter feed. Store markets for lambs and cattle remain subdued due to the limited feed. Meanwhile it will be a record year for milk production as conditions for pasture. Log prices are at exceptionally high levels as global demand for timber skyrockets at a time when supply has tightened. Freight disruptions are unlikely to abate anytime soon, continuing to cause havoc for our exporters and importers. Freight prices aren’t the only prices on the rise, with inflationary pressures now showing up nearly everywhere in the economy.


April 2021: Slow boat to China

Commodities are leading the global economic recovery. International demand for grains, dairy and forestry products is extremely strong – driven primarily by increased demand from China. Demand for products such as fruit is also robust, but finding sufficient labour to pick and pack the fruit is a major challenge. Container shortages and disrupted shipping schedules are also making it extremely challenging to deliver goods to market on time and in tip-top condition. It is particularly difficult for chilled products with a limited shelf life. Mother Nature has also been kinder to farmers this season than last. The east coast of NZ is still drier than normal, but this season’s drought is not as widespread as last season, which has provided more options to offload stock where necessary.


February 2021: Reaping the rewards

The year has started in a positive manner for most of our primary industries. The agreed upgrade of free trade agreement with China will help facilitate trade with our largest trading in the years ahead. Achieving this upgrade is particularly symbolic given China's relationships with many other trading partners have deteriorated. The dairy sector has started the year very strongly, which has resulted in milk price forecasts for the current season being revised up. The fortunes of the meat sector are mixed - returns certainly aren't as healthy as we have seen in recent years, but some sectors are improving. Demand for our produce generally remains strong in most markets. The biggest challenge is actually getting it there. Logistics are difficult at present as containers are difficult to source and ships are being delayed.

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