Agsafe Weekly Rural Report
Finance: The NZ dollar remained steady over the week but is still trading lower than recent years. Trump’s tariff war is creating international chaos. Brent Crude is steady around $70 to $75 per barrel, but is currently $72.15/barrel.
Wool: Wool prices There is increasing interest in wool & some promising signs being reported – still want to see the change!!.
Beef, Sheep & Venison schedules: Meat schedules are steady across the board with a lower dollar. There is strong demand for red meats especially the manufacturing beef in the USA. Venison prices are good, lamb & beef schedules are OK.
Dairy Prices. Dairy prices are steady and the seasons butter & cheese exports are up considerably on the pervious year. The international demand for dairy protein remains strong. Production is in NZ is falling as the drought continues to impact farming.
Winston Peters & NZ First have declared a war on WOKE. We all need to get behind him on this issue as it is destroying our country & the world. Listen to Rodney Hyde on Leighton Smiths podcast ~275 from 12th March. Rodney has some very good comments of the effect “woke” has/is having on our society.
Jim’s Weekly Rant:
In 1987 President Regan addressed the issue of the dangers of tariffs. He concluded that tariffs only worked in the short term and while they looked patriotic they were actually destructive. He went back to the great depression of the 1930’s where it is known that the high tariffs imposed then both worsened and lengthened the depression. Regan provided a continuum that happens when tariffs are imposed and he showed how companies start relying on the government for support and research and technological development then other countries retaliate, and trade-wars start. The spiraling increase in prices creates less competition and with artificially high prices inefficient management becomes evident. As prices spiral upwards people buy less and the market eventually shrinks and collapses. Tariffs ultimately destroy prosperity. I believe President Regan was correct in his summation of the destructive impact tariffs have on an economy. Free trade has always been the ultimate goal of most nations hence the numerous free trade groups that have evolved since WW2. So why is Trump hell-bent on tariffs? I believe he sees it as the return to patriotism by returning the manufacturing bases back to the USA, but what he has failed to understand or factor into his assumption is the amount of componentry that is traded across boarders. An example is the USA car manufactures that have major parts of the vehicles made in China, Canada, Mexico and other countries and then fitted into the vehicle in the USA. All the imported componentry will be subjected to tariffs and lift the prices of the USA made cars in the USA. Even Fisher & Pykel (Haier) have a manufacturing plant in Mexico to supply the US market using cheap labour. The tariffs imposed on Mexico will create massive problems for Haier and other companies. Trump seems to be using tariffs as a mechanism to force countries to tidy up some trade imbalances and with Mexico and Canada it is about social stuff like controlling the drug trade – “you stop the drugs at the boarder and we will reduce the tariffs”.
So how will NZ be affected? The simple answer is no one knows. The USA is a major buyer of our manufacturing (hamburger) meat and the trade imbalance is insignificant, but the Trump administration cannot be seen as favoring one country over another. Imaging Australia having tariffs imposed on their meat trade into the USA and NZ having no tariffs. It would give NZ an advantage which might be good, but would Aussie beef then be sold as NZ beef without tariffs? . Tariffs are destructive and can destroy economies, they are simply described as being mechanism of economic warfare. But the bigger question is are economic wars better than guns and bombs war? The medium-term outcomes might be different from what we expect as the USA imposes massive changes on the world order. And as is said in many situations: “Watch this space”. There are interesting times to coming and we all need to be prepared and try and understand what is happening or what could happen as the changes become evident.
Finance: The NZ dollar remained steady over the week but is still trading lower than recent years. Trump’s tariff war is creating international chaos. Brent Crude is steady around $70 to $75 per barrel, but is currently $72.15/barrel.
Wool: Wool prices There is increasing interest in wool & some promising signs being reported – still want to see the change!!.
Beef, Sheep & Venison schedules: Meat schedules are steady across the board with a lower dollar. There is strong demand for red meats especially the manufacturing beef in the USA. Venison prices are good, lamb & beef schedules are OK.
Dairy Prices. Dairy prices are steady and the seasons butter & cheese exports are up considerably on the pervious year. The international demand for dairy protein remains strong. Production is in NZ is falling as the drought continues to impact farming.
Jim’s Weekly Rant:
In 1987 President Regan addressed the issue of the dangers of tariffs. He concluded that tariffs only worked in the short term and while they looked patriotic they were actually destructive. He went back to the great depression of the 1930’s where it is known that the high tariffs imposed then both worsened and lengthened the depression. Regan provided a continuum that happens when tariffs are imposed and he showed how companies start relying on the government for support and research and technological development then other countries retaliate, and trade-wars start. The spiraling increase in prices creates less competition and with artificially high prices inefficient management becomes evident. As prices spiral upwards people buy less and the market eventually shrinks and collapses. Tariffs ultimately destroy prosperity. I believe President Regan was correct in his summation of the destructive impact tariffs have on an economy. Free trade has always been the ultimate goal of most nations hence the numerous free trade groups that have evolved since WW2. So why is Trump hell-bent on tariffs? I believe he sees it as the return to patriotism by returning the manufacturing bases back to the USA, but what he has failed to understand or factor into his assumption is the amount of componentry that is traded across boarders. An example is the USA car manufactures that have major parts of the vehicles made in China, Canada, Mexico and other countries and then fitted into the vehicle in the USA. All the imported componentry will be subjected to tariffs and lift the prices of the USA made cars in the USA. Even Fisher & Pykel (Haier) have a manufacturing plant in Mexico to supply the US market using cheap labour. The tariffs imposed on Mexico will create massive problems for Haier and other companies. Trump seems to be using tariffs as a mechanism to force countries to tidy up some trade imbalances and with Mexico and Canada it is about social stuff like controlling the drug trade – “you stop the drugs at the boarder and we will reduce the tariffs”.
So how will NZ be affected? The simple answer is no one knows. The USA is a major buyer of our manufacturing (hamburger) meat and the trade imbalance is insignificant, but the Trump administration cannot be seen as favoring one country over another. Imaging Australia having tariffs imposed on their meat trade into the USA and NZ having no tariffs. It would give NZ an advantage which might be good, but would Aussie beef then be sold as NZ beef without tariffs? . Tariffs are destructive and can destroy economies, they are simply described as being mechanism of economic warfare. But the bigger question is are economic wars better than guns and bombs war? The medium-term outcomes might be different from what we expect as the USA imposes massive changes on the world order. And as is said in many situations: “Watch this space”. There are interesting times to coming and we all need to be prepared and try and understand what is happening or what could happen as the changes become evident.