MAF's Situation & Outlook report for Agriculture and Forestry.This report makes interesting reading, as it gives us a feel where we are now, and some forecasts into the next 4 years.
The report states we have made a good recovery from the economic recession, where most of the effect has been in reduced credit, rather than lack of demand for our agricultural commoditys.A large part of the rise in prices has been on the back of Chinese demand.
They say that to achieve efficency and productivity gains, farmers need have an enviromental focus, and look at efficent water management, nutrient budgetd and reduce greenhouse gas emissions.
Some forecast prices for the 2011-2014 period worth noting. Venison 718c-787c/kg, Lamb 413c-570c/kg, Wool 384-529c/kg, Beef Prime 319-442c/kg, Dairy 524-721c/kgms.
Dairy export earnings were estimated to be down 16 per cent for the year ended June at $9.94 billion, largely because of drop in export prices, but were projected to reach $15.7 billion by the year ending June 30, 2014, as export prices and volumes increased, the report said in The ODT. Dairy production was likely to jump 14 per cent for the year ending May 2011, with an increased dairy herd and an assumption of average climatic conditions.
The report used exchange rate assumptions from the Treasury, including a rate of US51c in 2014. "That exchange rate does flow through to the forecasts of export values picking up, especially in 2013 and 14," Steel said. "But it is difficult to know what's going to happen next."
The MAF report forecast lamb schedule prices would fall to $4.13 a kg in the year ending June 2011, compared with an estimated $4.44 this year but would then rise over subsequent years to $5.70 in 2014. "I think the lamb supply is going to remain tight globally and I think in-market prices are going to be reasonably good so you're only coming back to the exchange rate," Rob Davison said.
1 Comments
The issue here we should debate is how we can increase the return on investment in agriculture, which world wide historically has been about 3%. The only reason farmers hang in there is, capital growth added to the business return, gives them a future. But those days are gone. Some will say the return is low because land prices are too high, but remember farmers run two operations, 1 looking after the asset and 2 getting a return from the business of farming. We need innovative ideas on how to seperate these two, and charge the business of farming, costs that reflect its productive value. While it is easy to be critical of farmers speculating on land prices, their record pales into insignificance when we look at "Hanover,Judge, Renouf," etc,!!!
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