Contrary to more optimistic reports by bankers and meat companies The Ministry of Agriculture and Forestry has presented a pessimistic report to the new Goverment and released by the Agriculture Minister David Carter. The papers, released yesterday by Ag Minister David Carter, say a world economic slowdown is likely to reduce demand for agriculture products and will reduce export revenue reports Business Day. Dairy: Reduced demand from oil producing nations and emerging Asian economies that currently take about 40% of dairy exports. Meat: Demand for NZ lamb is likely to fall as consumers turn to cheaper substitutes. Demand for beef is expected to remain strong as consumers switch to lower-cost ground beef. Wool: Prices are likely to remain low as new housing is the biggest market for wool carpets. Currency: The depreciation in the NZ dollar will mitigate the reduction in demand for exports.This is the largest eight-month fall since the NZ dollar was floated. The ministry sees the global crisis making it harder to obtain and service debt. This follows a rise in farm indebtedness and an increasing vulnerability to financing costs, particularly for dairy farmers, and lower commodity prices, especially for sheep and beef farmers.
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