New Zealand Agribusiness August 2022: Wet Welcome for Calves and Lambs
Here are the main highlights for some of New Zealand’s key commodities this month. The full report provides an overview of the developments to watch in the upcoming weeks.
- Dairy: RaboResearch holds its farmgate milk price forecast at NZD 9.00/kgMS for the 2022/23 season. We expect commodity prices to remain volatile over the coming months as the market works through uncertainty with regard to inflation, recessionary fears, and economic growth.
- Beef: RaboResearch anticipates that the farmgate beef price will remain elevated through the spring months, supported by a tight global supply situation and a favourable exchange rate.
- Sheepmeat: Farmgate sheepmeat pricing is expected to remain elevated into the spring months, but some of the shine could come off the schedule as China faces economic headwinds.
- Farm Inputs: A squeeze on China’s export program as well as further squeezes on the EU’s fertiliser supply chain means we expect the lull in global urea prices is over, and too soon to translate to local price relief.
- FX/Interest Rates: Another cash rate increase of 50 basis points – to 3.0% – is expected in August, with another one or two increases later in 2022. The NZD remains volatile and short-term USD strength is likely, but within six months we expect a turn and movement of the NZD towards USc 0.67 on a 12-month horizon.
- Oil/Freight: July was another volatile month for crude oil prices, as they balance tight supply and recession fears. Container shipping prices continue to fall slowly and are expected to normalise further over the next 12 months.
Where to go from here
Stefan VogelGeneral Manager – RaboResearch Australia & New Zealand Read more
Cheryl Kalisch GordonSenior Commodities Analyst Read more
Genevieve StevenAnalyst – Agriculture Read more
Angus Gidley-BairdSenior Analyst – Animal Protein Read more
Dennis VoznesenskiAnalyst – Agriculture
Michael HarveySenior Analyst – Dairy & Consumer Foods Read more
Emma HigginsSenior Analyst – Agriculture Read more
Pia PiggottAnalyst – Associate Analyst Read more