Agribiz report by Westpac

In these days of tough credit conditions and agricultures growing debt , it's important to follow the banks  understanding of the present economic situation. Westpacs Agribiz report looks at the world economy and predicts how our products will survive in it. They are positive in believing that  early signs of recovery are being seen, but believe a sustained situation could be some way off. NZ exports have fared better than many and the low currency has been helpful in that. Food purchases are not being hit as hard as other goods and services in this recession reinforcing the cliche that people must eat. Westpacs latest Dairy payout forecast for the 2009/10 season has been adjusted back to $4.70/kg but with much caution fluctuating around the volatile currency. Much will also depend on how the US cow retirement programme works in softening supply, and indeed how current market prices affect the world supply. They are still optimistic, that in the medium term prices will recover above the historic trend as emerging market growth drives demand.  Nothing new in their predictions for lamb with lack of international supply maintaining positive market prices in the next year.They are predicting a similar lamb crop for next year, and have increased their forecast price to $5.30/kg on a euro and pound currency of 0.43 and 0.36 respectively. The beef market is also being influenced by supply issues especially in the US and Argentina, which has helped stabilize prices on the back of weakened demand especially for prime cuts. They predict international beef prices to  be average around current levels over the next 18 months with returns at the farm gate for bull beef at $3.20/kg. Again strong privisos to these prediction rely on a lower NZ dollar. The report finishes with summaries on interest rates, currency, govt accounts, the labour market  and the housing market.