The pain of economic and weather cycles

Photo. Supplied.

Who could have foreseen that the strong drought causing El Nino would turn into a relatively wet one for most areas of New Zealand!

As I write this article in mid-January, it’s a hot sticky night following another 14mls of rain in two day. The regular falls of rain we have received, with some nice fine periods, has really set the season up well for all farmers. Contractors have had a strong grass season and made record amounts of grass silage, and any drought that occurs now is likely to have little impact.

As you read this, you will be well focused on the new year, with kids back to school, the time spent at the beach a distant memory and the regular stresses of everyday life taking hold.

One person recently said to me that “no one has any money”. I had to concur that we live in some very challenging times - whether you are farming or if you live in a town. We are at the stage of the economic cycle where we all feel the pain of elevated prices following a couple of years of high inflation, and must face high interest rates as the Reserve Bank uses their only real tool, the Official Cash Rate, that can only be described as a sledgehammer, to bring inflation under control.

For those of you feeling the pain all I can say is that you must hang on and do what you can to fight your way through as it will get better.


Looking at the agricultural markets it is great to see that milk prices are not only holding but lifting slightly with the most recent Global Dairy Trade auction rising 2.3 per cent. The current season’s milk price futures are sitting just under $8/kgMS, a long way from the season low of $6.70/kgMS.

It would be great to see a similar trend across the board for all agricultural markets, however, it is not the case with lamb remaining at historical lows and the beef schedule falling slightly. Given the abundance of grass the prices of young stock at the yards have risen, and with the schedule dropping, any margin to be made on these animals is now being squeezed.

We live in a world that seems to get more volatile, with the likes of the Russian-Ukrainian War, the Israeli-Gaza conflict or more recently the attacks on ships in the Red Sea by Houthis. This all has significant effects on world markets. These influences are ones to watch out for in the year ahead. I guess when we think about the challenges we face we can be thankful we don’t live in one of these countries currently at war.

It is needless to say that we have plenty of feed available for sale at present. But now is the time to order your straw or hay requirements, whether that be for feed or bedding, as it is significantly cheaper to buy it straight from the paddock rather than later in the year due to no double handling. We have some great prices currently so do get in touch.

Weather statistics

Christmas 2023/2024 122.5ml compared to 139.5ml for the same time last year.

July 1, 2023, to mid-January 2024 584ml compared to 1339 for the same time the previous year.

September 1, 2023, to mid-January 519ml compared to 965ml the previous year.

Average temperature for the first two weeks of January – 22.8 compared to 20.6 the previous year.


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