China, OCR challenges for agriculture

Rabobank senior agricultural analyst Emma Higgins. PHOTO: SUPPLIED.
Rabobank senior agricultural analyst Emma Higgins. PHOTO: SUPPLIED.
Central bank actions, the recovery of the Chinese economy and regional conflicts are set to charter a course for New Zealand agriculture this year, a Rabobank report says.

Farmers were no strangers to challenges and this year promised to "keep them on their toes".

Report co-author and senior agricultural analyst Emma Higgins said those challenges required a strategic mindset, agility and collaboration.

The main undercurrent affecting the sector would be Reserve Bank actions which would flow through to the cost of funds.

"The current restrictive monetary policy settings might start to ease up later this year but don’t be getting hopeful for a throwback to post-[Global Financial Crisis] rate levels."

Rabobank believed the Reserve Bank, in step with the United States Federal Reserve, would likely hold off official cash rate cuts until the second half of the year and any cuts would likely only be modest.

China was likely to continue to have a slow economy. And disruptions in the Red Sea increased the risk of another global supply chain shock.

Beef pricing in New Zealand in the next months would be resilient; good demand was forecast from the US.

Good supply from Brazil and Australia might hold pricing versus the highs of 2022, Ms Higgins said.

Sheepmeat remained "a subdued waiting game" for the year.

The kiwifruit industry was expecting a year of record returns.

Lower costs from fertilisers and agrochemicals were expected.

— Staff reporter



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