The Country 06/08/25: Emma Higgins talks to Jamie Mackay

Rabobank's Senior Analyst – Agriculture talks about the prospect of the $10 holy grail trifecta for farming.

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Episode Transcript

Speaker 1 (00:00):
She is a senior ag analyst for Rabobank. One of
the shortest titles in the Rabobank stable. Actually, Emma Higgan's
always good to get her on the show. We've chatted
to Matt Boulger from Fonterra about the GDT auction. Do
you think another positive auction as ten dollars? I know
you're going to I know you're going to duck for
cover on this one, Emma. But as ten dollars done
and dusted for the twenty five twenty sixth season, well,

(00:22):
you know.

Speaker 2 (00:22):
I might surprise you here. Look, I do think ten
dollars is looking pretty good right now. There's a few things,
as usual, put my caveats in there. I think the
big one is really how the market will respond over
the next several weeks when we're coming into critical timing
SI MILT production and also the bulk of our volume

(00:43):
that is offered on the GDT platform tends to step
up over the next sort of seven GDTs as well,
So how all of that aligns with potentially bumper spring
milk production will be critical as to how that ten
dollar price point moves at this point in time.

Speaker 1 (00:59):
I believe let's talk about tariffs. Now, this is the
first GDT auction I think that was affected or factored
factoring in a fifteen percent tariff to the US. And
as I discussed with Matt, obviously the US isn't a
huge dairy market compared to what it is for the
likes of red meat and wine. But what sort of

(01:19):
effect do you think it's having a on dairy and
be more importantly in your wheelhouse on red meat.

Speaker 2 (01:26):
Yeah, and look at us quite an interesting one, isn't it,
Because we're all sort of finding our feet in terms
of what might happen from here. Look, I think in
terms of dairy New Zealand really stands to benefit and
I'm sure you've probably heard it from some of your
other commentators just around how New Zealand could ultimately look
to supply any gaps that might emerge due to other

(01:47):
more unfavorable tariff amounts that are being imposed. But ultimately,
the biggest story I think the New Zealand farmers really
comes down to what's happening in the red meat space
and specifically to beef, because what we've got is a
really interesting dynamic starting to emerge. We've got steady farm
gate pricing for beef, which is excellent at the farm
gate price. Here in New Zealand, we've got a US

(02:08):
important market which is incredibly strong due to the lack
of supply domestically and the fact that they've got low
inventries and the herd rebuilding is un just happening. But
we need to layer on top of that the dynamics
with Brazil because what's been happening is that they have
front loaded a heck of a lot of products into

(02:29):
the United States. There's around about three hundred thousand tons
of beef that's entered into the US so far. Normally
they are in parallel with our volumes, which are currently
sitting at around one hundred and fifty thousand times so
the exports are up over one hundred percent year and year,
and what we think has been happening is that they've

(02:49):
been trying to frontload that product into the US market.
Because when we add all the various carrier terraffs and
quota amounts, etc. All out, it looks like Brazil are
facing around a seventy six percent tariff. So because of that,
we're expecting that those products from Brazil are likely to
start slowing down. But the Probably the impact for New

(03:13):
Zealand farmers is that we're likely to continue to see
steady pricing for beef and less upside as the US
market continues to digest one of really strong volumes and
have shipped across from Brazil. The good news is that
that herd rebuild is happening in the States. It's only
just kicked off. We think the cow cull is down

(03:33):
and we know that their heaper attentions are only just
starting to lift at the moment. So we think the
good news is that the steady market looks to be
in play for the next three to four years. New
Zealand does have a slight disadvantage when it comes to tariff,
having a fifteen percent number compared to a ten percent
imposed for Australia, so all things being equal, it does

(03:57):
put us on slightly backfoot. The dynamics are so strong
that I think New Zealand will be okay.

Speaker 1 (04:03):
Emma Higgins, thank you very much for your time today
on the country from Rabobank. Imagine if we got the
trifector ten dollar milk price, ten dollars beef price, ten
dollars lamb price, that would be farming utopia.

Speaker 2 (04:17):
Wouldn't it. And look, two out of three ain't bad
in the words of meat Loaf. And we're possibly there
on sheep meet, so we'll see.

Speaker 1 (04:24):
Well, well to see what happens with beef. Not not
a bad wee play on words there from you either, Emma,
thanks for your time.

Speaker 2 (04:31):
Thanks Jamie,