This represents the seventh consecutive monthly rise in the index, with the latest month also being stronger than any of the preceding six monthly increases.
Fourteen commodity prices increased in March and three were unchanged. For the first time in seventeen years there wasn’t a single decrease in the price of any individual commodity in the basket of 17 commodities that we monitor.
Last month was the first time in 17 years there wasn’t a single decrease in the price of any of the 17 commodities the ANZ monitors. Prices for
Fourteen commodity prices increased in March and three – wood pulp, kiwifruit and apples – were unchanged.
The price of wool strengthened 12 percent in March, with prices having doubled in the past 12 months. Whole milk powder prices also rose 12 percent, ahead of a 7 percent rise in skim milk powder prices. Lumber and skin prices also increased by 7 percent rise in the month. Beef and log prices grew 3 percent in the month; lamb, casein, butter and aluminium prices lifted 2 percent; venison and cheese prices rose 1 percent; and seafood prices increased by ½ percent. The export prices of wood pulp, kiwifruit and apples were unchanged over the month.
The value of the New Zealand dollar weakened in March. Consequently the rise in the locally priced ANZ NZD Commodity Price Index was magnified, lifting 8.1 percent from the preceding month, to an all time high. The NZ dollar priced commodity index is 25 percent higher than its level a year ago, and nearly double the low point recorded in February 2009, which followed the global financial crisis.
The New Zealand economy is poised to benefit from the increased rural income that will inevitably filter through the economy. Soft rural land values and a strong focus on the balance sheet has curtailed the benefit to the broader economy. This will not continue indefinitely. It is only a matter of time before this rejuvenation spills over into other pockets of the economy.
Farmers are cautiously optimistic after the best season many of them can remember. However the caution means they are paying off debt and keeping costs down which means the benefits of the commodity boom haven’t spread far from the farm gate – yet.
The Lincoln Field Days last week attracted about 21,000 people, a similar number of people as the last Field Days two years ago but sales were higher.
That is a positive sign that better prices farmers are receiving will start spreading further through the economy.