Christmas is coming early for farmers this year. Higher product prices plus rain falling at the right time plus some cost reductions - the latest in the important area of fertiliser - is all combining to make 2013/14 a stellar season.
Citing increased supply of Urea and DAP from China and a reduction in demand from India and Pakistan, Ballance Agri-Nutrients have today announced a new price list.
The strong series of globalDairyTrade dairy auctions continues with this mornings lift of 3.9%.
The data was:
The reason that globalDairyTrade auction prices are holding up so well seems to be threefold; growing demand for demographic and economic reasons, a muted supply response from the world's major dairy nations and the fact that China has 'lost' 2 million cows - see http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20131127000105&c...
Meanwhile NZX-Agri continue with somewhat pessimistic milk price forecasts for the 2014/15 season with an estimated $6.55/kgms forecast followed by $6.80/kg the following year (low/higher).
The United States Department of Agriculture is back producing economic data and information after a period of enforced silence as a result of the US government [budget] shut down. The following are the latest projections for developing world economic and population growth.
Whilst academic it is these indices that are driving increased dairy and meat demand through the known association between population and wealth and consumption levels. Obviously as people become more wealthy they eat more and they eat more meat and dairy.
The Parliamentary Commissioner for the Environment, Dr Jan Wright has just released a report "Water quality in New Zealand; Land use and nutrient pollution".
Yesterday on Radio New Zealand Dr Wright gave Katherine Ryan a thorough and balanced overview of the report, which is well worth listening to here.
New Zealand is becoming the farm for China, much like we were for England in the 19th and 20th centuries.
The following is an interesting extract from Radio NZ Rural about input costs in China:
"High input costs in China’s milk benefit NZ [12 November/ Radio New Zealand Rural].
I try not to become too excited too often. Generally high levels of excitement can end up with disappointment. What I am referring to is high commodity prices are generally followed by lower commodity prices.
MyFarm has contracted a farm at present which we are syndicating - Gold Creek Limited. We take over 16th of December. To date we have assumed investors will get an excellent rate of return over their first 6 - 8 months of investment before presumably falling back to more normal returns as the milk price moderates.
The spring dairy farm market has begun and for the first time since 2010 farm prices are starting to move upwards in response to record milk prices and the outlook supported by strong demand for NZ dairy products.
In a publication entitled "Eye on the horizon - Longer-term economic forecasts for New Zealand" Westpac have taken a look at the next 10 years for the NZ economy. Broadly speaking, they expect a period of strong growth through to 2017 followed by a correction as construction falls following the Christchurch rebuild and Auckland housing development (and also as a result of a tightening cycle from the Reserve Bank).