With the end of the year rapidly approaching it is perhaps worth having a look back and seeing where and how we’ve come as an industry through the last 12 months.
When we cranked up in January the prices being paid by livestock processors had taken a chronic downward slide. To a degree this is normal, but this season the drop was more marked than seen for some time. Lamb dropped 85c/kg between just prior to Christmas and mid-January and prime beef 40-50c/kg. By that time there had been a $2.65 kg drop since the giddy heights of October.
This drop has now stretched out to $3.20 and the falls continue.
This was also when, at least for those outside of the East Coast, that forestry slash became a regular part of our vocabulary as (ex) Cyclone Hale passed over wreaking havoc. An irony looking back was a comment I posted that perhaps things could only get better. Although the next post (Jan 20th) highlighted the big unknown, the weather. Then Cyclone Gabrielle came and made what had gone before pale in comparison. And the effects of the compounding cyclones, plus additional more extreme weather events have probably changed our view of what can be considered normal.
Speaking of which, back in May we were forecasting El Nino and by the end of July saying it was imminent. This assumed it was to be accompanied by drought or at least very dry conditions (which would have been a welcome change for many). However, this week we have had thunderstorms and torrential rain, which follows regular falls leading up to now. We have more grass than we know what to do with and presume NIWA have taken their phone of the hook.
Their latest update, which covers the December to February period, predicts dry periods ahead and explains the changeable nature of this season due to the greater amount of heat in the ocean in different places compared to previously strong El Nino years (see below).
Souce : NIWA December update.
Even if it heads into a dry spell now, we will be hard pressed to call it anything other than a good damp season, although there are still some predictions of 40oC days ahead.
By April earlier in the year the talk of recession was well advanced and those forecasting that got it more right than NIWA, unfortunately. I feel the elections aided this with the country going into a form of ‘lock-down’ for four weeks. Perhaps, this year is a good example of why a four year term has to be preferable. We’re one of the very few countries still persisting with less than four. To me this has been one of (and continues to be) the more volatile and ill-humoured years in politics I can recall. No doubt the easy access of social media has fed this to a large degree and this along with a need for some politicians to find a niche which provides a sustainable support group (at least until the wind changes, again) has led to a more divided country than I can recall seeing before.
Within the rural sector I feel the “Ground Swell” movement has been part of this, although a large number will disagree. Unfortunately, I can’t see next year being any improvement. For farmers much of the dissatisfaction has been driven by the on-off again policy changes to what was He waka eke noa (translation if we’ve forgotten “We’re all in this together”).
Under the new government I’m still not sure what the future policy is.
What parties campaigned on seems to be changing as the realities of government come into play. The latest COP28 climate conference, rather than clarifying positions and hardening up different government positions for future emission reductions, has with the objections of oil producing nations at including reductions in fossil fuels, not done anything to make the prospect of reduced CO2 emissions look any more likely.
Without considering the consequences, I can feel some sympathy for them. Oil is largely what their economies revolve around. I doubt our government would agree to reduce livestock in New Zealand, at least until there is some meaningful substitute to fill the economic gaps.
While for sheep and beef farming the past year has consisted of a consistent diet of bad news, be it weather or pricing. Dairy has had some upsides. While the TWI GDT price in US$ terms is slightly down on the opening values ($1,029 in January to $1,002 in December) at least forecasts looking ahead are more positive with Fonterra’s latest update now at $7.50 with the bottom end being pushed up. The El Nino dry has been delayed and on farm productivity should not be taking the hit predicted earlier.
Making any more than vague predictions for the next 12 months is fraught with danger from all fronts; markets, politics and climate, are all continuing to be in a volatile phase. So, a wait a see approach is the best that can be done. However, NIWA are predicting a warm and dry Christmas.
Source: NIWA for the Christmas week. Dark brown equates to drier warmer conditions.
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