Guy Trafford looks ahead. He sees Russia (negatively) and China (positively) having big influences of farming prospects in 2023, but local changes being less important - except for the big unknown, the weather

You don't know what you don't know, so assessing what is ahead for New Zealand farming is always fraught.

The current major influences we are seeing at the moment are climate extremes and Russians actions in the Ukraine and influences elsewhere. You could add in government policies although I’d like to think we have hit a hiatus there, perhaps October 17th might have something to do with this, although most policies are reasonably (if a little unsettled) in place.

Covid also can almost be relegated to a bad dream (at least until we find out otherwise) that has run its course.

Russia’s action last year and still continuing at the moment has had a greater impact upon global trade than anything I can recall seeing before. Even the impact of Covid-19 while far reaching didn’t impact as immediately and severely as what Putin unleashed with impacts upon energy and grain markets and we have been fortunate that his actions haven’t extended to nuclear fallout. Going into 2023 it certainly appears that Ukraine’s chances of defeating Russia are looking increasingly more likely. As one observer has said initially the West actions were to provide weapons etc to prevent Ukraine being defeated whereas now the West is beginning to supply weapons to actually defeat Russia. Whether this can be achieved before the end of 2023 is probably unlikely and so we are unlikely to see any great changes to the energy and grain markets for some time.

So high costs to fuel and fertiliser will continue as these will obviously keep food costs up and grain shortages will persist.

Meat and dairy on the local markets despite seeing international prices falling are still seeing high prices for consumers. Wholesale cheese prices (within New Zealand) from the major producers are still at record levels despite the GDT significantly back on the record level of nearly a year ago. No doubt the cost of logistics and labour are having a contributing affect however prices seem to indicate some gouging going on through the chains.

The consumer has been told to expect inflated prices and so accept that the price increases are inevitable but meat and cheese should start to rebalance on local markets soon if there are any ethics out there.

Counterbalancing this and positive signals for traditional producer/exporters, the reawakening of China and them re-joining global trade is likely to be the main game changer for these products and in-fact may provide an export driven lift to price before local processors feel a need to readjust local prices.

Chinese New Year (starting on Sunday, January 22) may be an early indicator whether such an uplift is occurring. There are rumours that restaurant bookings in the major Chinese cities are up to pre-Covid levels. The Chinese have also been building up their savings over the prolonged lock down periods. So, if they are anything like Kiwis, they will be looking forward to splashing out.

Nothing is ever certain especially now but producers in areas not affected by weather extremes may be in a position to see some positive movements.

Unfortunately, weather extremes are going to be with us for far longer than I can foresee and most farming systems are going to be put to the test as to how resilient they are. This is going to apply to all forms of land use. What no one can predict (as NIWA predicts them all at various times) is whether it will be floods, drought, fires, wind or combinations of all.

I can recall thinking in the early 90’s when prices were poor and the UK and other countries were afflicted with mad cow disease and foot and mouth who would want to be a farmer! However, out of those game changing diseases New Zealand found its feet and was able to capitalise on them and we have taken those gains right through to the present times.

So, impacts on farming looking forward are likely to be harsh but we need to keep things in perspective and if we are having hard times dealing with the climate and other issues from afar it is likely other producers will be having far worse times than us. We just have to look over the ‘ditch’ at Australia and the issues many farmers there have to face.

It pays to remember that adversity is a relative thing and while things here may not feel rosy, compared to many others around the globe, we are still in a good position to make positive gains. How the year ahead pans is going to be anyone’s guess and by the end of it we are likely to have a totally different view of it than what we think we see ahead now. However, through a lot of trials and tribulations we hopefully will find we are not in such a bad place.