Farmshed Economics: Upsets, comebacks and lessons

Looking at developments over December, we lifted our 2016/17 milk price forecast by 50 cents to $6.50/kg on 21 December.  At the same time, we nudged our 2017/18 forecast higher by 25 cents to $6.75/kg.  With that in mind, dairy farmers can take time out over Christmas and look forward to better times over 2017.   

Turning to the meat sector, beef prices continue to hold at healthy levels.  Looking at lamb markets, prices are taking baby steps towards improvement.

Also, we expect rural land prices to lift over 2017.  Indeed, the recovering dairy sector is likely to see both a greater number of farm sales and lifting prices.

Lastly, interest rates are on the up, following US rates higher.  All up though, interest rates are likely to remain low over 2017 and into 2018 compared to historical averages.  Meanwhile, Donald Trump’s election victory has put a rocket under the US dollar.  Since his election, the NZD has dived from around US$0.7380 to US$0.6920