New Zealand agriculture set to extend profitable run - Rabobank

Photo / File

Rabobank's latest Agribusiness Outlook report says Kiwi farmers are poised to enjoy a fourth consecutive year of profitability in 2020 – with strong returns set to support them through a year of significant transition.

With New Zealand dairy and meat already reaching record prices, "this year is a very good year to be in livestock" Rabobank's Head of Research Tim Hunt told The Country's Jamie Mackay.

High prices for beef, lamb and dairy were underpinned by good demand conditions and limited supply growths, as well as the effect of African swine fever on China's market.

Hunt admitted his report was written before the coronavirus outbreak in China, and said it would have a different effect on some farmers, compared with the SARS virus in 2003.

"The exposure's much greater. It's spreading much faster and for some niche segments this is going to cause significant damage, at least in the short term".

However, it was a different story for staple products such as milk, beef and mutton said Hunt.

Listen below:

"We're unlikely to see Chinese consumption of those products fall and we can see that looking back at the SARS crisis ... what you saw was a significant reduction in the amount of people eating out".

"So the greatest risk at the moment is coming from those products sold by food service channels and those products that rely heavily on supply chain logistics and are perishable".

Products such as live crayfish were more at risk than milk powder said Hunt, therefore Rabobank did not expect coronavirus to cause a "significant detrimental effect" on the dairy industry.

Also in today's interview: Hunt looked at other sectors in New Zealand agriculture and predicted his "star of the stable" for 2020.