New Zealand’s agricultural sector is looking at mixed prospects in 2016, with dairy facing another difficult year but most other sectors, including beef, are expected to perform well, according to a new industry report.
In its Agribusiness Outlook 2016, global agricultural specialists Rabobank says dairy prices continue to be weighted down by strong supply growth, particularly out of Europe, after the recent removal of quotas, according to the bank’s general manager country banking New Zealand, Hayley Moynihan.
While dairy prices face another tough year, Rabobank foresees a generally strong year ahead for most other agricultural sectors.
Rabobank general manager food and agribusiness, Tim Hunt (right), says solid demand in offshore markets, recent progress in export development and generally tight global supply is likely to bring another good year for New Zealand producers of beef, wool and horticultural products.
“While beef prices have lost some ground in recent months, they remain well above multi-year average levels and are expected to receive support from a generally tight global market,” he says.
“Wool producers will face headwinds from cheap synthetic fibres, but see support from declining production in New Zealand and Australia.”
He sees lamb producers facing a less buoyant 2016. “Challenging seasonal conditions have driven a surge in slaughter rates early in the season, with prices likely to remain under pressure given generally sluggish demand,” he says.
The Rabobank Agribusiness Outlook found currency, financial volatility, the Chinese economy, climate and oil prices were all swing factors which had the potential to impact the prospects for New Zealand agriculture in 2016.