Rural Wrap

Drying Out

Doug Steel -
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- NZ soils drying out rapidly
- An economic risk worth monitoring
- As 2008 NZ recession attests

The risk of drought in New Zealand is rising. That might seem like a strange thing to say when right through winter and early spring there was far too much rain. Back then grass growth was restricted by saturated soils. But conditions have been changing over recent weeks. It has been drying out – rapidly. It has got to the point now that many parts of the country have bigger soil moisture deficits compared to what is normal for this time of year according to NIWA. At this point, we have not adjusted our economic forecasts on account of the spreading dry. But it is a risk worth highlighting, especially with near term weather forecasts showing little rain on the horizon.

Rural Wrap - Slow Spring

Doug Steel -
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- Spring 2017 lamb number estimates reduced
- Expected milk production increase also tempered
- Recent wet weather unhelpful for many
- Export growth outlook lowered, shaving GDP forecast

Export volumes of meat and dairy products over the coming season will, as usual, be a function of farmers’ previous decisions based on such things as climatic conditions and farm economics as well as events through the season itself. That is, what is happening on farm gives a good steer to what lies in store for exports. Winter and early spring weather has been less than ideal, crimping the outlook for export volumes.