September 7, 2026 • 6 mins
RaboResearch's senior animal protein analyst reviews the bank's September Agribusiness Monthly Report, which shows commodity outlooks remain positive despite rising farm input costs.
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Speaker 1 (00:00):
She is a senior animal protein analyst for Rabobank. Everyone's
got a title there. Her name is Jen Corcoran. Jen,
monthly you guys at Rabobank come out with your Agribusiness
Monthly Report. And if I look at it, and I
look at the left and the right, on the left-hand
side is the commodity prices. They're all, or outlooks, they're
all pretty good. Dairy, beef, sheep, meat, pretty good. I
(00:21):
look on the right-hand side of the ledger, farm inputs,
interest and exchange rates, oil and freight, not so flash.
Speaker 2 (00:29):
Good afternoon, Jamie. Yes, that's a great summary for this
first monthly of the spring, September. And, you know, we've
titled it A Spring in the Steppe, which probably speaks
more to that commodity side of things. You know, things
are really looking quite good out there. And, you know,
we've got record highs across parts of the red meat
sector still right now. But as you say, there's a
(00:51):
lot of watching points around that farm input side. And
it's fair to say things aren't very settled in the
Middle East yet. And, you know, the dollar is slightly
stronger than it's been as well. So there's a few
things playing into the cost side of businesses, I think,
that we need to really be keeping an eye on
and talking about as we go into the busy seasons.
Speaker 1 (01:09):
OK, let's start with the income side of the ledger.
And I want to start with dairying. I was a
bit worried that that was calling its jets a bit,
but we've had a couple of positive GDT auctions. So
is it steadying the ship there?
Speaker 2 (01:23):
Yeah, things are steadying out, Jamie, and we expect that
to perhaps continue as milk supply growth globally starts to
slow down, right? So that's what's really driving things. We've
also got really good demand for the powders happening. There's
still a lot of that butterfat and cheese basically supply
out there. So that's sort of holding things back in
(01:44):
that space. But as the season goes on, You know,
the view of rubber research is that we've got good
upside potentially there, so things are looking quite good from
a potential farm gate milk price perspective in New Zealand.
Speaker 1 (01:55):
And if we look at all of our commodities, in
some ways beef has been the star of the stable
of what's happening in the U.S. despite the tariffs. But
you're cautioning a bit of a warning here regarding that
trim price for beef, the stuff they want to put
into their hamburgers in the U.S., Why is that happening?
I thought there was just an out-and-out shortage.
Speaker 2 (02:17):
Yeah, well, there really is an out-and-out shortage of basically
domestic trim in the United States, and that is not
expected to go away anytime soon. What's changing around at
the moment a little bit is that the US has
opened up the other country's quota tariff and basically reduced
it to zero. or they say they're going to, for
about 300,000 tonnes of beef. Now, what that means, Jamie,
(02:39):
is that doesn't affect us really at all in terms
of our access into the United States market. But Brazil,
who's looking for a home for a lot of beef
because they can't actually send much into China right now
for other different China quota reasons, means that they may
start to pop more beef up into that market. And
what we're seeing is that that US imported trim prices
(02:59):
softening quite kind of rapidly at the moment. However, let's
remember it's at a very all-time high. And, you know,
our prices are also, because of that, very, very strong.
So we're coming down from a higher base because there
potentially might be a little bit more product for the
next 90-odd days going into the United States. But again,
remembering New Zealand's got great relationships into the US for
(03:21):
that trim. we've got good, consistent, compliant, safe product. And
so I think, you know, we're not necessarily competing all
the time with some of these other countries that might
be able to flood a market on a volume perspective
if those relationships don't perhaps exist in other countries. So
we'll just keep an eye on it. That might be
why we're seeing a little bit of softening in, you know,
our farm gate prices for bull and cow-cow at the moment.
(03:43):
But it is coming down off a very, very strong position.
Speaker 1 (03:47):
There's a lot of sheep farmers out there at the
moment on the lambing beat, listening hopefully to this show.
Have you got words of encouragement for them? What are
the prospects for lamb-like, Jan Corcoran?
Speaker 2 (03:57):
Yeah, great question, Jamie, and we talked about this, you know,
this time last year, right, because things were really picking
up and, you know, we're sitting steady above $ 12 at
the moment, obviously in a very low supply period before
these lambs grow bigger and start to hit the market
before Christmas. So the big question will really be when
that supply turns on and to what degree in New
Zealand because the export situation around that average export value
(04:21):
hit a new record in July at over $ 17, which
is a crazy amount of money because you're low on average. Now,
the reason for that is that we've got a good
diverse range of markets for our lamb. They're willing to
pay for it. There's a global shortage of sheep as well,
thanks to Aussie, and the northern hemisphere in general around
the UK and Europe. So good demand broadly for sheep meat.
(04:43):
Mutton prices are also doing great things. I'm reasonably positive
for the outlook for this season. I think the big
question will be how many lambs hit the New Zealand
processing sector at once. if that even happens at all, right,
and that's kind of more around the weather. So I
think we're sitting in a good spot. We're above $ 12.
It's likely to soften through that peak, but I can't
(05:04):
see any situation where we would expect it to fall
off a cliff in any direction.
Speaker 1 (05:09):
Right, let's quickly finish on, because we've touched on farm inputs. Obviously,
fertiliser and fuel are a real issue off the back
of what's happening in the Middle East, but I want
to just finish on interest rates and the exchange rate. Now,
we're currently at about 59 US cents. You guys at
Rabobank are expecting us to get to 61 in the
(05:30):
next 12 months. I guess we can live with that.
The interesting one is interest rates. Ben Pickton, your guy
in Sydney, chief economist effectively, is saying another couple of
rises to 3.25%. And do you know what I think, Jen?
I think we can live with that because if I
look across the Tasman to where Ben's making these predictions,
The Aussies are currently at 4.35%, with future rises in prospect.
(05:56):
So maybe we're not doing that bad after all.
Speaker 2 (05:59):
No, we're not doing too bad. And I think the
rubber research view here that Ben talks about is that
the New Zealand economy is recovering. And I think we're
all kind of aware of that now. There's just that
little bit of inflation management that isn't quite finished. And
so what we're expecting because of all of that, and
it's been well kind of versed this year is that
there is still more rises to come we think and
(06:21):
a couple more to go really but um it's certainly
not looking too bad if we if we compare ourselves
to across the ditch and um and we'll just watch
and see what
Speaker 1 (06:29):
Happens you can read all about it on rabobank's website
rabobank.co.nz jen corcoran thanks for your time thanks amy
She is a senior animal protein analyst for Rabobank. Everyone's
got a title there. Her name is Jen Corcoran. Jen,
monthly you guys at Rabobank come out with your Agribusiness
Monthly Report. And if I look at it, and I
look at the left and the right, on the left-hand
side is the commodity prices. They're all, or outlooks, they're
all pretty good. Dairy, beef, sheep, meat, pretty good. I
(00:21):
look on the right-hand side of the ledger, farm inputs,
interest and exchange rates, oil and freight, not so flash.
Speaker 2 (00:29):
Good afternoon, Jamie. Yes, that's a great summary for this
first monthly of the spring, September. And, you know, we've
titled it A Spring in the Steppe, which probably speaks
more to that commodity side of things. You know, things
are really looking quite good out there. And, you know,
we've got record highs across parts of the red meat
sector still right now. But as you say, there's a
(00:51):
lot of watching points around that farm input side. And
it's fair to say things aren't very settled in the
Middle East yet. And, you know, the dollar is slightly
stronger than it's been as well. So there's a few
things playing into the cost side of businesses, I think,
that we need to really be keeping an eye on
and talking about as we go into the busy seasons.
Speaker 1 (01:09):
OK, let's start with the income side of the ledger.
And I want to start with dairying. I was a
bit worried that that was calling its jets a bit,
but we've had a couple of positive GDT auctions. So
is it steadying the ship there?
Speaker 2 (01:23):
Yeah, things are steadying out, Jamie, and we expect that
to perhaps continue as milk supply growth globally starts to
slow down, right? So that's what's really driving things. We've
also got really good demand for the powders happening. There's
still a lot of that butterfat and cheese basically supply
out there. So that's sort of holding things back in
(01:44):
that space. But as the season goes on, You know,
the view of rubber research is that we've got good
upside potentially there, so things are looking quite good from
a potential farm gate milk price perspective in New Zealand.
Speaker 1 (01:55):
And if we look at all of our commodities, in
some ways beef has been the star of the stable
of what's happening in the U.S. despite the tariffs. But
you're cautioning a bit of a warning here regarding that
trim price for beef, the stuff they want to put
into their hamburgers in the U.S., Why is that happening?
I thought there was just an out-and-out shortage.
Speaker 2 (02:17):
Yeah, well, there really is an out-and-out shortage of basically
domestic trim in the United States, and that is not
expected to go away anytime soon. What's changing around at
the moment a little bit is that the US has
opened up the other country's quota tariff and basically reduced
it to zero. or they say they're going to, for
about 300,000 tonnes of beef. Now, what that means, Jamie,
(02:39):
is that doesn't affect us really at all in terms
of our access into the United States market. But Brazil,
who's looking for a home for a lot of beef
because they can't actually send much into China right now
for other different China quota reasons, means that they may
start to pop more beef up into that market. And
what we're seeing is that that US imported trim prices
(02:59):
softening quite kind of rapidly at the moment. However, let's
remember it's at a very all-time high. And, you know,
our prices are also, because of that, very, very strong.
So we're coming down from a higher base because there
potentially might be a little bit more product for the
next 90-odd days going into the United States. But again,
remembering New Zealand's got great relationships into the US for
(03:21):
that trim. we've got good, consistent, compliant, safe product. And
so I think, you know, we're not necessarily competing all
the time with some of these other countries that might
be able to flood a market on a volume perspective
if those relationships don't perhaps exist in other countries. So
we'll just keep an eye on it. That might be
why we're seeing a little bit of softening in, you know,
our farm gate prices for bull and cow-cow at the moment.
(03:43):
But it is coming down off a very, very strong position.
Speaker 1 (03:47):
There's a lot of sheep farmers out there at the
moment on the lambing beat, listening hopefully to this show.
Have you got words of encouragement for them? What are
the prospects for lamb-like, Jan Corcoran?
Speaker 2 (03:57):
Yeah, great question, Jamie, and we talked about this, you know,
this time last year, right, because things were really picking
up and, you know, we're sitting steady above $ 12 at
the moment, obviously in a very low supply period before
these lambs grow bigger and start to hit the market
before Christmas. So the big question will really be when
that supply turns on and to what degree in New
Zealand because the export situation around that average export value
(04:21):
hit a new record in July at over $ 17, which
is a crazy amount of money because you're low on average. Now,
the reason for that is that we've got a good
diverse range of markets for our lamb. They're willing to
pay for it. There's a global shortage of sheep as well,
thanks to Aussie, and the northern hemisphere in general around
the UK and Europe. So good demand broadly for sheep meat.
(04:43):
Mutton prices are also doing great things. I'm reasonably positive
for the outlook for this season. I think the big
question will be how many lambs hit the New Zealand
processing sector at once. if that even happens at all, right,
and that's kind of more around the weather. So I
think we're sitting in a good spot. We're above $ 12.
It's likely to soften through that peak, but I can't
(05:04):
see any situation where we would expect it to fall
off a cliff in any direction.
Speaker 1 (05:09):
Right, let's quickly finish on, because we've touched on farm inputs. Obviously,
fertiliser and fuel are a real issue off the back
of what's happening in the Middle East, but I want
to just finish on interest rates and the exchange rate. Now,
we're currently at about 59 US cents. You guys at
Rabobank are expecting us to get to 61 in the
(05:30):
next 12 months. I guess we can live with that.
The interesting one is interest rates. Ben Pickton, your guy
in Sydney, chief economist effectively, is saying another couple of
rises to 3.25%. And do you know what I think, Jen?
I think we can live with that because if I
look across the Tasman to where Ben's making these predictions,
The Aussies are currently at 4.35%, with future rises in prospect.
(05:56):
So maybe we're not doing that bad after all.
Speaker 2 (05:59):
No, we're not doing too bad. And I think the
rubber research view here that Ben talks about is that
the New Zealand economy is recovering. And I think we're
all kind of aware of that now. There's just that
little bit of inflation management that isn't quite finished. And
so what we're expecting because of all of that, and
it's been well kind of versed this year is that
there is still more rises to come we think and
(06:21):
a couple more to go really but um it's certainly
not looking too bad if we if we compare ourselves
to across the ditch and um and we'll just watch
and see what
Speaker 1 (06:29):
Happens you can read all about it on rabobank's website
rabobank.co.nz jen corcoran thanks for your time thanks amy
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