The current nation-wide lockdown has yet again cast a pall over the country. From a livestock farming perspective however the lockdown should not have the same impact as the last level 4 one had.
From a straight farming perspective, this time we are going into spring. This means increasing grass and warmer temperatures. Quite the reverse of the March-May lockdown we all experienced last year and so while sale yards are likely to remain closed for the duration most farms should be in a far better position to ride it out.
There also is a lot less uncertainty around markets.
There is still uncertainty, just less this time around.
While experiencing the Delta variant may be new to us, for many countries they are well ahead of us and have made their adjustments, good or bad, and now are getting on with their new paradigms. So, markets should not be the unknowns of the past. The possible caveat is China who is also battling a Delta outbreak of their own based around Shanghai. To date it appears as though they have it under control and with the majority of their population having at least one vaccine and New Zealand would be unlucky to have it impact upon sales.
Probably the biggest impact locally will be the slow down of livestock needing to be processed going through the works with staff needing to go back to distancing within the workplace. But again, with the slaughter season coming to an end and livestock throughput at a seasonal low this also should not be a major disrupter.
Perhaps the only farmers a little nervous will be those with lambs which are getting close to having their mature teeth erupt, although there is likely to be a month or so before this starts to become an issue. Just to reinforce the lack of disruption is the observation that the meat schedules have remain static for the week with venison even taking a step forward.
Before we start to congratulate the works too much it should be noted that the NZ$ versus the US$ has taken a knock with the Kiwi falling considerably.
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This will have helped cover any extra expenses the processors may be experiencing for some time.
A similar impact has helped to moderate last week's fall in WMP and improve the situation of the other dairy products. At this stage the term of the lock-down is looking reasonably modest with the MoH seemingly having a good handle on it. But we have made rash predictions in the past that now sound ridiculous, so I hesitate to say we’ll be out of this in a couple of weeks.
The primary sector that is probably taking the biggest hit from the lock-down is the horticultural sector. With the government agreeing to let in another 150 RSE workers per fortnight from the Pacific, the Delta outbreak has come at a bad time. Hopefully only the first one or two tranches will be delayed. While no fruit picking is being done at the moment, there is plenty of overdue work to be done in orchards and vineyards. Whether 150 per fortnight will make an appreciable difference over the whole country is doubtful, however, any is better than none.
In the meantime having just had a look at Keith Woodford's latest article on forestry and the ETS, a readers comment highlighted the fact that the government has updated its floor and ceiling prices for the next round of NZ Units auction in September. These go out to 2026 and probably need to be seen as guides rather than set in stone as the latest rises have seen this response.
At the moment the New Zealand price of carbon on the ETS is ...
Reinforcing Keith Woodford’s comments regarding the differencing between the EU scheme and New Zealand’s, is the differences in profile of the two schemes.
In the meantime, the hedges that didn’t get finished in the last lockdown may finally get the attention they need, now that the garage has been cleaned up.