New Zealand commodity prices fell further in August as meat prices dropped and dairy prices largely traded sideways.
The ANZ Commodity Price index slipped to 293.2 from 295.7 in July, down 0.8 per cent on the month but up 16.3 per cent on the year. In New Zealand dollar terms, the index was at 211.2, up 0.2 per cent on the month and up 15.8 per cent on the year as "the dip in the NZD against most major peers during August helped buffer local returns," said ANZ Bank agri economist Con Williams.
Meat prices had another rough month, with prices falling 3.2 per cent month-on-month. Higher US domestic production, reduced retail promotional activity and a passing of the seasonal demand peak have been the main drivers of lower beef prices. Lamb prices - down 0.7 per cent month-on-month - were "more resilient", and sheepmeat prices continue to be supported by low seasonal supply and inventory levels and New Zealand dollar prices are receiving an additional boost from a lower NZ dollar against the euro and British pound, Williams said.
Dairy prices slipped 0.4 per cent in August, with whole milk powder up 0.3 per cent but skim milk powder down 5.2 per cent, partly due to high Northern Hemisphere stocks, and processors in these regions continuing to favour a SMP/milkfat mix because of high milkfat prices, Williams said.
Seafood prices were unchanged and horticulture prices fell 1.7 per cent on the month while the forestry group increased 0.7 per cent as log prices continue to be supported by Chinese demand, with port-level inventory and offtake continuing to track favorably. Wood pulp fell 1.3 per cent as Chinese demand for softwood products eased.