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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2022 editions

June 2022: Global food shortage looms

Global food prices continue to strengthen as shortages loom for basic foods such as grains. This means there will also be a shortage of carbohydrates to feed livestock. This won’t directly impact New Zealand food production systems, but it will impact our competitors who rely on grain to produce beef and milk. At the same time, the price of growing pasture has also gone up, as global fertiliser costs have soared. The shortages of these basic feed stocks will underpin global production costs and keep production in check, but it will also erode the ability of poorer countries to import the higher-value foods that New Zealand exports.

April 2022: Mixed blessings

Widespread autumn rain has devastated many arable and fruit crops, but has been welcomed by pastoral farmers. Food commodities are in short supply globally. New Zealand will also export less produce than normal this season as production of most of our export commodities is impacted for varying reasons including delays processing livestock and impacts of labour shortages.

February 2022: Heating up

Commodity prices for dairy produce and most meat cuts are currently very strong, which, combined with a slightly weaker NZ dollar, is delivering exceptionally strong prices at the farmgate level. Unfortunately production is constrained in many areas, as soils have dried out rapidly. On-farm costs are also rising exceptionally quickly, and labour – or rather the lack of it – is becoming a major constraint for most primary industries. The unemployment rate is now the lowest it has been since the early 1980s. This is making it exceptionally hard to find short-term labour. The labour shortage means it is very unlikely that all of the fruit will be harvested this autumn and there could be significant delays at meat processors. If labour availability falls further due to surge in COVID-19 cases then the situation will only worsen. Interest rates are on the rise here in NZ and globally. Central banks are now starting to tighten monetary policy in an attempt to rein in inflation.

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