It’s raining, it’s pouring, ANZ report

Ōtautahi - Wet conditions prevail across most of New Zealand, which has made it very difficult for wintering stock as soils are saturated, the ANZ bank says in its latest agriculture report.

Some regions have received more rain in the past month than they have all year.

Delays getting stock to processors also mean some farms are carrying more stock than normal for this time of the season, the report says.

Labour shortages that meat processors have been faced with mean we may need to reconsider our heavy reliance on being able to get space at processors when desired with little notice.

More forward planning, including supply contracts, could be beneficial for all parts of the supply chain.

The upside of the recent heavy rains is that irrigation dams have filled up nicely, which will be beneficial later in the year.

Commodity prices remain elevated, but the heat has come out of some markets recently as demand continues to be disrupted. Lockdowns in China have had an impact, as have tightening economic conditions in most markets.

Within New Zealand, the flood of regulatory change shows no sign of letting up. While there is widespread support for the intent of many of these rules, the practicality of implementing rules and unintended consequences remain a key concern for many.

The Climate Change Commission has recommended sharp upward changes in pricing guidelines for carbon credits released in the quarterly government auctions and have advised they don’t support including sequestration within the he waka eke noa framework.

“What is very clear is that we still have some way to go in terms of regulatory change and consents will be something most landowners will need to get used to.”

Energy and food prices are both very high at present, although the price of many of the foods we export is starting to ease.

The lower prices are largely driven by lower demand as supply remains tight for most foods we export. There are still major challenges getting goods to market due to ongoing issues in the container shipping industry.

Prices for goods shipped in bulk have eased a little, which is benefitting the forestry industry.

Demand for goods received a massive boost from the fiscal and monetary policy stimulus packages delivered to offset the economic impact of covid. But in many cases the economic impact was not as bad as was first feared and therefore the stimulus simply caused excess demand at a time when supply chains were limited in their ability to respond.