Agsafe Weekly Report

Finance:  The NZ dollar is steady to slightly easier. The Reserve Bank lifted the OCR by 50 points last week. The banks are charging some excessive interest rates - bordering on “price gouging”- excessive Bank profits are wrong in the current markets.

Wool:  Wool prices remain in the doldrums. 

Beef, Sheep & Venison schedules: The meat schedules are steady as feed supplies are allowing the farmers to retain stock in some areas while others are have to destock due to floods and losses of land through slipping.

Dairy Prices:  The g/DT slipped 1.5% at last weeks auction and Fonterra reduced its predicted farm gate price by $0.50.  This is a real blow (but expected) to the farmers as the season production to date is behind last year and costs have escalated.  Many farmers will moving into negative territory with the some interest rates having increased by 3.5% plus over recent months.

A lot of deferred maintenance has been undertaken this season with the thought of a good milk payout.  It is time to reassess the remaining “jobs” and redo a budget with a reduced payout of around $8.50 and interest rates at 7.5%.  Basic farm costs on a system 1 & 2 are around $5.00 to $5.20 per kg ms.  Margins are thin!!!