The latest ANZ Agri Focus Report paints a bleak picture for rural New Zealanders with soft farmgate prices expected to have a severe impact on farm cashflows this season.
Decreased demand, particularly from China, challenging weather and rising costs for farmers seem to be stacking the odds against those paving their own way in rural business and the latest data doesn't appear to reveal any significant let-up.
Despite all this, International Keynote Speaker and Market Analyst Julia Jones assured REX host Dominic George that the current state of affairs in the farming industry isn't a crisis, but a part of the cyclical nature of economic patterns.
"Everything moves in cycles…we've had a really good run, and so things do adjust," she emphasised.
Jones didn't sugarcoat the situation the majority of kiwi farmers are currently facing.
She acknowledged the grim reality of shrinking farm gate prices and escalating costs. She explained that the issue isn't just the drop in prices but the impact on margins due to costs not dropping concurrently.
From meticulous cost management to proactive communication with financial institutions, Jones stressed the importance of external advice in these uncertain times.
However, she remained optimistic and reassured listeners that there is hope in these difficult times.
"Every single economic crisis I've been through with the farming community, we have come out of it better than we went into it."
The conversation then moved to the global stage, discussing the impact of China's economic downturn. Jones urged listeners to control what they can and not to feel powerless.
"Understand what you can't control. Understand the difference between your circle of influence, circle of control, and then the things you just need to understand," she advised.
When asked about diversifying markets, Jones advocated for the farming community's engagement in accreditation programs. She underscored the need to stay relevant to alternative markets and pointed out the potential in the US market, terming it as a "more viable market."
She envisioned New Zealand as being to food what Taiwan is to microchips, emphasizing the need to become indispensable in the global food market.
"We need to be Taiwan to the world for food… The US is our most logical partner right now."
In this time of economic challenges, Jones’s insights offer much-needed reassurance and guidance. While acknowledging the struggles, she also emphasizes the opportunities that lie within these difficult times. Her grounded perspective and optimistic outlook provide a fresh viewpoint on navigating these uncertain times.
The expertise and knowledge serve as a timely reminder that despite the economic challenges, there is a ray of hope and a roadmap to navigate through them. As Jones aptly put it, "It's not the end of days, it's a reset."
Find out more information about the full Agri Focus Report here.
Listen to the full chat between International Keynote Speaker & Market Analyst Julia Jones and Dominic George above.
To check out more episodes listen to the REX Today Podcast anytime on your favourite streaming platforms including Spotify, Apple Music and Rova or tune in to REX Mornings live on Magic from 5 am to 6 am every weekday.
Visit the Rural Exchange Facebook or Instagram page for more information and regular updates from the REX team.
