A Challenging Year Ahead For New Zealand Agri-Business Is Predicted In A New Rural Banking Report

A challenging year ahead for New Zealand agri-business is predicted in a new rural banking report. ASB’s Sleepless in Shanghai, report says weak Chinese demand is pushing global commodity prices down – especially for dairy, red meat and forestry. The report says forestry prices are in a rut, and global dairy prices are down more than 40% from peaks in early 2022. ASB economist Nat Keall is anticipating a reduction in dairy and meat supply, as many farmers fall below the break-even point. He says China sneezes and everybody else catches a cold. He says what we’ve seen is that the economy there has weakened along with demand. He says as prices fall, fewer farmers produce and therefore you get a bit of tightening of supply and prices start to move up again. Nat Keall says interest rates are expected to remain high for the next year too – with the debt servicing burden at its highest in years.