BNZ Rural Wrap
International dairy prices rose strongly in 2016, from low levels. Prices have largely held these gains in 2017. While some easing is still expected over the coming year, we expect prices to be sufficient to underpin a $6.75 milk price in 2017/18. We see this as close to the mid-point of a still wide range of possible outcomes.
Primary Prices Performing
- Primary product pricing generally firm
- 2017 goods exports expected to lift by over $3b
- Farm spending rising cautiously
- Debt repayment on the agenda too
- Very high terms of trade an economic boon
- Sets the scene for a buoyant National Fieldays
Many primary product prices are not only higher than a year ago but they also currently sit above their 5-year average. It’s a positive sign for incomes. To the extent that farmers spend the additional cash, it will be a boost for economic activity. But there are also debt repayments and saving to consider. In any case, it is good to have options.