Agri Focus
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March 2012 - Turning water into wine (PDF 431KB)
In this report we take a look at the wine industry which is a growth story for New
Zealand. But the industry is suffering from growing pains. Key issues include a
splintering of approaches between small and large wine companies, bulk exports undermining
branded/bottled wine, over-reliance on one variety, increased regulation/taxes/compliance
costs, and higher production costs. Remedies include targeting expansion in existing
markets and opening up new markets, stronger focus on "super premium" positioning,
strategies to strengthen relationships and rebuild trust within the industry, collaboration
to manage supply and inventory, a stronger focus on efficiencies throughout the
supply chain – with consolidation inevitable, and continued research and marketing
into maintaining a high-quality public image of New Zealand wine. Education corner
looks at New Zealand's natural resource endowment and how we compare with other
nations. The World Bank has estimated New Zealand comes in at 20th of 152 countries
for total wealth per capita, and 8th for natural capital. More importantly we top
the list for 'renewable' natural capital per capita. Our ranking in the natural
capital per capita stakes is also higher than Australia.
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January 2012 - All bets on the dragon (PDF 307KB)
In this issue we take a look at seven key theme’s that we expect to play an influential
role in determining NZ’s and the farming sectors economic prospects over the year
ahead. They include: Deleveraging headwinds; Transitioning via differentiation;
Sovereign risk; Economic tensions – the interaction of five shocks; Asia – with
opportunity comes vulnerability; The grand finale – game theory at play; and Desynchronisation.
Education Corner examines different countries’ milk supply. We look at who the main
milk producers are, who is on the move, and how competitive they are. There is also
the normal round up of financial markets, key commodities, interest rates and the
rural property market.
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November 2011 - The green flush (PDF 280KB)
In this month's edition of the Agri Focus we take a look at where commodity prices
are heading. We expect NZD commodity prices to remain elevated, supported by favourable
supply-demand dynamics. However, a fickle global scene adds a considerable amount
of downside risk, though the currency is acting as a buffer. Education corner examines
the topical issue of Monetary Policy. While not a perfect system, and further tweaks
could certainly improve things, it is better than the alternatives on offer. And
we should remember that New Zealand has tried some of the alternatives that have
been mooted before, with disastrous consequences. The rural property section highlights
quite a bit of the cash from the 2010-11 season has found its way into property.
Thankfully, most investments have been strategic in nature and from those with strong
balance sheets. This additional momentum has also started to lend some support to
pricing, with murmurs of further upside over the coming 12 months.
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September 2011 - Kick-off (PDF 237KB)
In this issue we look at the attention centred on global developments and the challenges
facing various nations, including their vulnerability, fiscal sustainability issues
and financial conditions – with the latter having the potential to quickly escalate
problems. All signal a long period of challenging conditions for pockets of Europe
in particular. In the Education Corner, we look at the changing face of water management
in New Zealand, and the implications for rural water users and the wider New Zealand
economy.
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July 2011 - The Game of Two Halves (PDF 290KB)
In this issue we take a closer look at India and what a potential Free Trade Agreement
(FTA) is worth. Our simple estimates suggest a bilateral FTA could provide a one-off
boost to New Zealand exports of around $2.3bn (1.2 percent of GDP), with agriculture
one of the major beneficiaries. In the Education Corner we examine the building
blocks of human nutrition. This looks at protein and fat demand being a big driver
for New Zealand agricultural exports and industries over the next decade or more.
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May 2011 - Golden Year (PDF 696KB)
In May's Agri Focus we take a look at the future of a sector that has been a founding
pillar of our fine nation – the red meat sector, or “dry stock” farming and see
a greater need for farmers to take ownership of the recommendations of the Red Meat
Strategy report.
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March 2011 - Super-sized Autumn (PDF 737KB)
March Rural Focus looks at what real worth free trade agreements have for the average
farmer/grower, the myths and realities of rural business management, leadership
and governance, and the latest rural economic and market information.
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January 2011 - Two P's in a Pod (PDF 526KB)
January Rural Focus looks at the key economic themes evolving over 2011 and their
relevance to the rural sector, business risk gradings and their relationship to
business interest rates, and the latest rural economic and market information.
This material is for information purposes only. Its content is intended to be of
a general nature, does not take into account your financial situation or goals,
and is not a personalised financial adviser service under the Financial Advisers
Act 2008. It is recommended you seek advice from a financial adviser which takes
into account your individual circumstances before you acquire a financial product.
If you wish to consult one of The National Bank's financial advisers, please contact
us on 0800 18 18 18.