New Zealand’s provincial economies are poised to drive growth in the economy, building on the recovery in dairy prices during 2016, according to Infometrics latest economic forecasts. Spending activity in the regions is comfortably outpacing activity in the main centres, with commodity prices for most exports holding at high levels.
Mycoplasma bovis (M. bovis) is spreading fast in New Zealand and causing devastating effects for farmers. The Government this week announced an ambitious attempt to stamp out the disease, through mass culling and strict restrictions on farmers. M. bovis causes a wide range of problems in cattle, ranging from pneumonia to arthritis. The government says they have a good shot at eradication… if they act now.
We have revised down our expectations for GDP growth during 2018 in our latest economic forecasts (see Graph 1). Our previous forecasts, in October, were upbeat about prospects for the New Zealand economy this year, but a range of factors have combined to see that growth outlook soften over the last few months. These factors include persistent capacity constraints in the construction sector, changes in central government’s infrastructure priorities, and dairy prices that have been a bit disappointing.
Exports made their rebound in the June quarter, with volumes up 6.8% from March (seasonally adjusted). Rising prices on the international market have supported a lift in dairy, horticultural, and forestry export volumes – so much so that Eastland Port boasted record log shipments in the month of June. Although the recovery in export prices has brought demand for heavy vehicles back on line, there are concerns about the consequent increases in road maintenance costs.
After a few tough years, the prospects for New Zealand’s primary sector are currently looking pretty good. There is a lot of commentary going around about the potential $6 trifecta for dairy, beef and lamb prices, while kiwifruit growers and wine producers are also looking forward to continued buoyant returns. One part of the primary sector, however, that doesn’t perhaps get the coverage that it warrants is arable.
It has been a bit of an unusual time recently in the banking sector following the Reserve Bank’s cut of the official cash rate by 25 basis points to 2.0%. Instead of playing ball and passing on this cut to mortgage holders and other borrowers, the major retail banks, with the notable exception of Kiwibank, passed on mere crumbs and, intriguingly, lifted the interest rates they offer to term depositors.
Something seems to be adrift in the domestic oil market and sufficiently so as to warrant some form of investigation by the Commerce Commission. An excess margin of around 10 cents per litre represents a transfer from consumers to oil companies in the region of $600m each year.
The sharp decline in dairy prices since their February peakwill have a significant effect on farmers’ incomes and their willingness tospend and invest this dairy season. This article examines what potentialfarmgate milk price scenarios mean for each territorial authority’s dairypayout.
Although log exports are booming, wood manufacturers are going through tough times. This article explores the reasons for these diverging fortunes and examines what can be done to help the wood processing industry.
The massive spike in dairy prices during the 2013/14 season has simultaneously highlighted both the seemingly insatiable Chinese appetite for dairy products and a fundamental flaw in Fonterra’s milk price formula. This article expands these issues by looking at factors that will support Chinese dairy demand over the coming five years, as well as considering the likely supply response from other key dairy-producing nations.