Rabobank has officially put out its New Zealand Agri-Business Outlook for 2024. It's called 'Smooth sailing or choppy waters' and Senior Agricultural Analyst at Rabobank Emma Higgins joins Dom George for a comprehensive discussion of the report.
Higgins, co-author of the report, provides expert analysis on the challenges and opportunities that the country's agri-sector faces in light of various global and local factors.
A significant part of the conversation revolves around the three key factors outlined in the report that are expected to influence New Zealand agriculture in the coming year: central bank actions, the recovery of the Chinese economy, and geopolitical tensions.
Higgins points out that the central bank's monetary policy decisions will be crucial in shaping the cost of funds, which is "key to really shape some of the fortunes this year."
She emphasises the balancing act central banks face between controlling inflation and the implications of prolonged monetary policy. The dialogue also turns to the dependency of New Zealand's commodity trades on China's economic performance.
Higgins voices concerns about China's slow economic growth and its potential impact on New Zealand's export prices, acknowledging the need for exporters to pivot to new markets.
"We are very reliant on China and I know that a lot of our exporters are doing what they can to pivot away and find new markets, which is also another silver lining."
Geopolitical tensions, including the ongoing conflicts in Ukraine and the Middle East, are discussed as potential disruptors of global supply chains and crude oil prices. Higgins notes the delicate political relationship between New Zealand and China, particularly in light of New Zealand's engagement with Australia and other allies.
The episode also touches on the implications of New Zealand's new government and its multiple agriculture ministers for the farming community. Higgins suggests that "more ag ministers... may bring fresh air," but also cautions that "the general direction of travel for the broader regulatory environment is likely to stay the same."
She highlights the importance of attention to detail and increased collaboration within the agricultural sector. Throughout the episode, Higgins provides nuanced insights into sector-specific outlooks, such as dairy, beef, sheep meat, and horticulture, and comments on consumer trends and farm inputs.
The conversation encapsulates the intricate web of factors affecting New Zealand's agri-sector and serves as a vital resource for those invested in its future. Higgins concludes by reflecting on the importance of regulation.
"The devil will be in the detail, obviously, as we start to see some of those changes come through."
Listen to the full chat between Emma Higgins and Dominic George above.
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