Farmers upbeat at Fieldays despite the cold

Farmers upbeat, despite the cold at Fieldays. Photo / Alan Gibson

Thousands braved strong southerlies and low temperatures to turn out at the Fieldays agricultural event at Mystery Creek, near Hamilton, amid an air of renewed optimism across a raft of different primary sectors.

From dairy through to kiwifruit, the primary is in a sweet spot, with the country's biggest merchandise export, dairy, bouncing back convincingly from a two-year slump.

"If you look right across the agri sector, the reality is that there is a good productivity improvement, growth, and better prices," Fonterra chairman John Wilson told the Herald.

"Farmers are sensing that, and that they are therefore able to plan for their businesses," Wilson, who also sits on the board of fruit and vegetable exporter T&G Global, said.

Wilson said he was still comfortable with Fontera's forecast of a $6.15/kg milk price for 2016/7, and a total payout of $6.55/kg.

For the current 2017-18 season, Fonterra's opening forecast stands at $6.50/kg, which he said reflected a more balanced supply/demand picture globally.

However, he did not expect dairy farmers to be big buyers at Fieldays as farmers continue to rebuild their balance sheets after the price slump between 2014 and 2016.

Zespri chief operating officer Simon Limmer said the kiwifruit industry was in the throes of picking the last of the green crop after a challenging harvest weather wise.

The kiwifruit marketer expects to sell 123 million trays of fruit this season, down slightly from 130 million last year. While volume was down, fruit quality was high and prices were strong, he said.

Zespri is developing a red variety of kiwifruit, but a decision on whether to proceed with it is two years away.

ANZ chief economy Con Williams said a more diverse range of businesses were exhibiting at Fieldays, across 1400 or sites, reflected advances in technology.

"The rate of change is picking up in the agribusiness sector; part of that is driven by the market and part of it is driven by regulation," he said. "Farmers are responding to those challenges.

"The dairy sector has been through a big downturn and their ability to do that kind of stuff (with technology) has been hampered a little," he said. "Improving returns will allow them to do more."

Williams expected a 2017-18 milk price of $6.75/kg.

"We're biased towards the upper end, with demand expected to be able to absorb the increase in supply at reasonable prices. However, if supply increases more than expected due to conducive weather this could push estimates back towards $6.00/kg."

ANZ expected farm-gate lamb prices to push toward mid-$6/kg in the winter period and hold through to the start of the new season, before moderating and for bull beef prices to hold around the mid-$4/kg mark into late this year, before adjusting down into the low-$4/kg.

The supply of beef from both the US and Brazil is forecast to rise more aggressively into 2018.