Agsafe Weekly Rural Report

Finance: The NZ dollar remained steady over the week but has continued to weaken &while it is good for exporters, it is tough on importers. Brent Crude is steady around and below the $US65/barrel.

Wool: The wool prices are firming. There is strong demand from China.

Beef, Sheep & Venison schedules: The meat schedules are steady with strong demand for red meat internationally. US sheep farmers are concerned about the supply of lamb from NZ & Australia. The strong schedules are pushing domestic meat prices up.

Dairy Prices. Dairy prices have eased over recent week. The “Pulse-Auction” is continuing a downward trend and it is expected the g/DT this coming week will record a further easing in that will put real pressure on Fonterra to lower its forecast FGMP.

It is important to get your pastures ready for the summer. Ryegrass wants to flower & during the flowering process the quality declines. Topping will push the flowering process forward and maintain the quality longer but make sure the topping does not leave bare ground exposed during the summer period. I usually recommend that topping stops around 10th December.

You can hear us live on the radio on Monday morning at 7.35 am with Brian Kelly on Country Sport Breakfast – Radio NZ Gold AM. 792 AM in the Waikato & 1332 AM in Auckland.

Jim’s Weekly Rant:

New Zealand is failing and functioning with two economies. The rural economy, which is moving along well with strong demand for the dairy commodities and red meats and even wool is showing a resurgence. The other economy is for everyone else and there are many who are struggling with limited discretionary money available, and that’s going to be tough as Christmas approaches. The hospitality industry is struggling and the furniture and whiteware sales are reported as being low. New Zealand has moved from being one of the most prosperous economies in the OECD 40 plus aga to one of the poorer performing economies and are ranked 50th on the world Economic Complexity Index. The country needs to make a fundamental change if we want to become a wealthy country again. A country cannot become wealthy backed by an internal investment in residential housing which is where most New Zealanders measure their wealth, it is like building a house on sand. We need to look at what a politically stable vibrant economy is and give us something to aspire to. This is NZ now: 60% of our exports are rural based with 25% of all exports coming from dairying and 26% of the exported dairy commodities go to China. Dairy exports total +$18b. Meat sales are 12% at $8.46b, Forestry is $5b, seafood is $2.5b and horticulture is $3.5b or 5% of all exports. The forestry exports are the log sales where they are processed overseas and then the resultant products are imported back into NZ. The high-tech exports are 13% and are low in relation to other developed countries. Gold and other precious minerals are mined in NZ and sent overseas for processing as our environmental requirements are too tough. The innovative use of our commodities is all done off-shore and that is where the wealth stays and we just need to look at the sale of the Fonterra Brands to Lactalis and Alliance Meats to Dawn Meats in Ireland. To compare the NZ housing industry against productive industries will show housing is about 11% of GDP and it creates an illusional wealth as housing is not a productive asset. Housing values have increased by 130% over the last 20 years. The average house price in NZ is 8.8-times the gross medium income while the international standard is 3-times. New Zealanders invest in unproductive housing while the countries with strong economies invest in innovation and business development. The NZ investment in research and development is 1.4% of GDP while the OECD average is 2.7%. in simple terms, low investment in research and development is symptomatic of low economic growth. We export people who take their wealth and innovation with them while at the same time we import labuorer’s with limited capital or the wealthy retired immigrants whose innovative and productive enterprises remain off-shore. High wages and high power charges are problematic for NZ industries. There is an aging and shrinking workforce with 18% of our population being over 65 years old and the pensioners are also living longer so the welfare costs continue to increase. Our obesity is the third worst in the world and that adds to the social costs with over 400,000 people relying on some form of welfare. Our education system has been a failure. The HSBC recorded NZ as the worst performing economy in 2024. The labour productivity index in NZ is 0.3% while the OECD average is 1.5%. In simple terms, New Zealand is failing. These are the statistics we need to consider as we look for ways to make NZ great again!!.

Contact AgSafe NZ Ltd - Phone 027-2872886. We can prepare your Work Safe manual and hazard management plan at a very competitive price. We can arrange drug tests and farm maps for your property.