New Zealand Agribusiness April 2022: Variable Autumn Weather and High Input Prices

Here are the main highlights for some of New Zealand’s key commodities. The full report provides an overview of the developments to watch in the upcoming weeks.

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- War in Ukraine: Global market volatility will remain high while the active fighting in Ukraine continues. The heavy sanctions on Russia are forcing a change in geo-political order.  Secondary sanctions against China remain a key risk.

- Dairy: Milk supply from most of the exporting countries remains lower compared to the prior season but inflationary pressure around the globe begs the question ‘how high for how long’? 

- Beef: Global demand for beef remains strong, and farmgate pricing is expected to remain elevated in New Zealand in April. 

- Sheepmeat: Elevated farmgate pricing is expected to continue in April, supported by strong demand from China and the US. Processing delays and shipping logistics will likely continue to limit potential export volumes.

- Venison: The venison schedule is expected to continue to recover through Autumn, albeit at a potentially slower pace than the lift it has seen in the past three months.

- Downstream Markets: Food inflation is a key component of the broader inflationary issues impacting the global economy. China’s strict zero-Covid-tolerance continues to cause disruption to the local food market. 

- Farm Inputs: Unfortunately for farmers, local fertilizer prices reached new highs due to the war and it is unlikely any significant price relief will be felt before the end of the winter and before spring.

- FX: The Central Bank (RBNZ) is expected to continue to increase interest rates over the course of 2022 (towards an Official Cash Rate (OCR) of 2.25 in December 2022, up from 1.00 currently) in an attempt to temper inflation.

- Oil: Oil prices close to USD 100/bbl keep NZ fuel prices expensive. Bulk freight rates have firmed since the beginning of the war and the slow decline of container freight rates has halted for now.

  • Stefan Vogel

    General Manager – RaboResearch Australia & New Zealand.
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  • Angus Gidley-Baird

    Senior Analyst – Animal Protein
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  • Michael Harvey

    Senior Analyst – Dairy & Consumer Foods
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  • Cheryl Kalisch Gordon

    Senior Commodities Analyst
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  • Wesley Lefroy

    Senior Analyst – Agriculture
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  • Emma Higgins

    Senior Analyst – Agriculture
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  • Genevieve Steven

    Analyst – Agriculture
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  • Dennis Voznesenski

    Analyst – Agriculture
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