New Zealand Agribusiness May 2022: Global Supply Chain Mayhem

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.


A Record-breaking Month: April was a month of records. While strong and partly record-breaking pricing (CBOT corn and CBOT soy oil) benefit farmers, the record fertiliser prices seen in early April and strong energy prices cut into margins. Globally, inflation in many regions has reached its highest point in decades and passing on costs to consumers is getting difficult.

- Dairy: Opening milk price forecasts are around the corner. Despite weak global supply fundamentals, we anticipate a wide range to capture the heightened uncertainties in market conditions. Global dairy commodity prices presented a mixed bag in April 2022 as demand weakened.

- Beef: RaboResearch anticipates that the North Island bull price will continue to hold around the current levels in May. Global beef pricing remains strong amidst economic and supply chain pressure in key markets.

- Sheepmeat: We anticipate that farmgate sheepmeat pricing will hold steady in May, supported by strong demand from the US. Widespread lockdowns in China will likely impact New Zealand sheepmeat exports in May.

- Downstream Markets: Consumers need to brace for more food inflation as headline numbers hit decade highs. The potential consumer response and volume reduction in food and beverage sales could be more pronounced in emerging markets.

- Farm Inputs: Global urea prices have fallen but we do not expect a sustained, or further, decline unless hostilities cease in Ukraine, something that is considered unlikely in coming months.

- FX/Interest RatesThe NZD has weakened in past weeks against the USD. We maintain a strengthening of the NZD in our forecast, but acknowledge the downside risk of an economic slowdown in China, which would hurt NZ exports. Despite RBNZ raising interest rates in April by 50 basis points to 1.5%, a further hike is expected.

- Oil/Freight: Oil markets remain tight as the west moves away from Russian supplies, with limited room for supply disruptions. Seasonal higher demand is expected and any relaxations of China’s lockdowns could further support prices. Port congestions, especially in Asia, put upside risk on container freight rates.

  • 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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  • 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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