New Zealand Update
The latest dairy auction saw prices decline by 1.9%. Whole milk, which is a key price indicator for the Fonterra payout, was down 1.2%.
Fonterra’s payout forecast for season 18/19 has been revised down from $7/KgMS to $6.75/KgMS. The farm-gate price for the 17/18 season now ended is $6.79/KgMS including a 10 cent dividend.
New Zealand’s terms of trade rose 0.6% in the June quarter.
The NZ commodity price index fell 1.1% in August and 0.5% yoy.
New Zealand Dollar/Interest Rates
New Zealand Dollar
Vs USD 0.66058
New Zealand Interest Rates
NZD cash rate is 1.75%.
The NZ 10yr bond rate is 2.61%.
— Gold organic kiwifruit development with annual average yield of 18%+
— Existing gold kiwifruit conversion to organic
— North Island regional focused impact investment pastoral dairy
— High value organic apples
— South Island impact investment, regenerative dairy.
The following are trends we are seeing in the market:
— Conventional farmland investment strategy for overseas investors remains difficult to get through OIO.
— Regulation around water quality is an increasingly significant issue and is influencing farmer decision making. It is driving interest in exit or moving to more regenerative systems.
— Growth of impact investment interest as a means to improve specific environmental performance in New Zealand whilst generating return. Impact Investment is being seen as a compelling and efficient use of capital for mission driven investors in particular.