March 30, 2026 • 6 mins
Independent economist and the chair of Transport NZ. What are we seeing across livestock transport? Plus, we look at the exchange and interest rates, inflation and the NZX50 down 7% in March. And what are the best and worst-case scenarios?
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Speaker 1 (00:00):
Right, let's kick it off with and dependent Economists. Chair
of Transport in Z Cameron Bagriy Cameron, how worried should
farmers be, especially when it comes to transport of livestock?
Speaker 2 (00:14):
Tough out there, right, if you're a transport operator, you're
one of your I E. Diesel has gone through the
sc roof and you zee on as a country consumes
more diesel than what we do. Sort of petroble to
forget about the impact on or remote users you have.
The blood around this country is actually diesel. You know,
(00:35):
I'd encourage your red meat processes. These sort of people
just be a little bit accommodate. That's what the transfer
sector is going through here. You nuances about your trying
to get some sort of price relief pictors in regard
to some sort of.
Speaker 1 (00:53):
Cameron. Sorry, mate, we're not. We've got a great line here.
Can you stand on a chair or go to a
because you're cutting in and out of web it on
me here, I'll just give you a wee minute to
do that. Let me just give you a weave it
a Macy Gray Well, I was going to buy some
time for you to get to a better reception area.
(01:16):
Keep okay, take two on Cameron Bagray, it has I've
been off the trail here on the country. Believe it
or not. He was in Wellington and a higher rise
building on the twenty eighth floor. I thought, way up there, Cameron,
you'd get good mobile reception. But we've got you down
(01:38):
to the ground floor. Now talk to me about the
livestock transport industry please again.
Speaker 2 (01:44):
Well, the transfer sect of the moment. It's going pretty
toughly because you've got higher input costs from the form
of higher diesel prices and as a country we consume
more these of them what we do petrol. And the
problem is at the media fixate with the impact on
motorists as opposed to the law blood around this economy
and to get stuff from A to B. So look,
(02:04):
i'd encourage you to read me processes. Yeah, just be
a little bit flexible accommodating in regard to recognizing the
input costs for a lot of these transport life stop
operators that are going up to government out there, if
they're sort are listening to this yet, and it's going
to be tough to get price relief. But what we'd
like to see is some sort of productivity relief, i e.
A sector another sort of one to two ton truck.
(02:26):
So you assume roughly the same amount of fuel, but
you're getting more productivity by getting more stuff from A
to B. And that's a look at productivity relief as
a way of city of driving improvements across the sect
to relieve you know what is pretty stressful times out there.
Speaker 1 (02:42):
Okay, let's look at some of the numbers. Exchange rate
fifty seven US sns. I suppose in some ways that's
a positive. Certainly not a positive pricing fuel, but it
is for our export income, receipts, inflation maybe getting up
to four plus four percent. Interest rates when so are
going up, and if you were to use the nz
(03:03):
X fifty for instance, as a baromouth are down seven
percent in March. None of these numbers, Cameron Bagrie, are
really working for us.
Speaker 2 (03:12):
No, they're not. What's going on if you've got the
bigger picture, Jamie's, it's what's called a negative supply shock.
When oil prices up adds to input cost as the
input to a costs go up across the board. That's
bad for earnings, it's bad for growth, and flashing goes Hi.
I think Treasury came out with an estimate I think
(03:33):
about two weeks ago they said worst case scenario and
flacing was going to be three point seven percent. That's
probably looking the best case scenario. At the moment, we're
going to see something with a four percent handle in
front of it. And the scary numbers is that we
start to see a little bit of persistence about this
sort of shock. The view I guess three weeks ago
was I hopeing this is going to be a short
lived affair does not look like it is going to
(03:56):
be a short lived affair. With each sort of passing
day looks like it's going to be longer of duration,
longer duration Skyle event or the bigger the economic On
the other side, as a general principle, we're seeing growth
estimates revised there is they turn by economists, and inflation
estimates revised up. So that's bringing about what's called the statuation.
(04:16):
So that's not a word that we like to sort
of throw around, but that's going to be the reality
of about three months.
Speaker 1 (04:21):
Yeah, it's a dirty word to throw out there. Okay,
weren't with a brilliant line, but I just want you
to crystal ball goese for me, Cameron baggery, best and
worst case scenarios. Even under the best case scenario of
this war ending tonight or tomorrow morning, Trump declaring victory
and getting out of there, that doesn't appease the Iranians.
And the other thing is the supply chain issues won't
(04:44):
correct themselves overnight. So what's best case scenario.
Speaker 2 (04:49):
Well case scenario is they do a deal. What that
deal looks like, we don't know. But if we can
do a deal, then you're going to see the forward prices.
My oil prices are going to come back down. And
what we're seeing historically is that oil prices go up
(05:10):
then I collapsing right back. Then it's just the question
of how long they stay high. So we hope move
mats sort of part. But the problem is, look, even
if you start to refire up these oil fields, you've
got to get the pressure out up and that's no
easier fear. You know, the refineries that are starting to
shut down, well the chemistry parts, so you can't sort
(05:31):
of flick a switch on and off and sudden that
you magically producing refined fuel. The other side, so that
the reality is that this is going to take a
few months. I think settle down and it is step
you can think about the sure Over the past sort
of four to five years, the global environment has just shifted.
We're no longer in a low risk, low volatility world.
(05:53):
It's like shocks are becoming the new normal, whether it
be oil, whether it be shipping, whether it be something
to do with that era called the Great Moderation, which
is sort of nineteen ninety three to twenty nineteen brow
low inflation, not much volatility is behind us. Were just
(06:14):
in an era that feels a lot more like the
sixties and seventies. Was that a bad era? No? Was
it all more volatile area? Yes? And you just need
to learn how to deal with that and manage risk.
Speaker 1 (06:24):
Okay, Cameron, thanks for your time going from the twenty
eighth floor to the ground floor to have a chat
to us independent economist and the chair of Transport New
Zealand urging some constraint are the poor old transport companies
Right, let's kick it off with and dependent Economists. Chair
of Transport in Z Cameron Bagriy Cameron, how worried should
farmers be, especially when it comes to transport of livestock?
Speaker 2 (00:14):
Tough out there, right, if you're a transport operator, you're
one of your I E. Diesel has gone through the
sc roof and you zee on as a country consumes
more diesel than what we do. Sort of petroble to
forget about the impact on or remote users you have.
The blood around this country is actually diesel. You know,
(00:35):
I'd encourage your red meat processes. These sort of people
just be a little bit accommodate. That's what the transfer
sector is going through here. You nuances about your trying
to get some sort of price relief pictors in regard
to some sort of.
Speaker 1 (00:53):
Cameron. Sorry, mate, we're not. We've got a great line here.
Can you stand on a chair or go to a
because you're cutting in and out of web it on
me here, I'll just give you a wee minute to
do that. Let me just give you a weave it
a Macy Gray Well, I was going to buy some
time for you to get to a better reception area.
(01:16):
Keep okay, take two on Cameron Bagray, it has I've
been off the trail here on the country. Believe it
or not. He was in Wellington and a higher rise
building on the twenty eighth floor. I thought, way up there, Cameron,
you'd get good mobile reception. But we've got you down
(01:38):
to the ground floor. Now talk to me about the
livestock transport industry please again.
Speaker 2 (01:44):
Well, the transfer sect of the moment. It's going pretty
toughly because you've got higher input costs from the form
of higher diesel prices and as a country we consume
more these of them what we do petrol. And the
problem is at the media fixate with the impact on
motorists as opposed to the law blood around this economy
and to get stuff from A to B. So look,
(02:04):
i'd encourage you to read me processes. Yeah, just be
a little bit flexible accommodating in regard to recognizing the
input costs for a lot of these transport life stop
operators that are going up to government out there, if
they're sort are listening to this yet, and it's going
to be tough to get price relief. But what we'd
like to see is some sort of productivity relief, i e.
A sector another sort of one to two ton truck.
(02:26):
So you assume roughly the same amount of fuel, but
you're getting more productivity by getting more stuff from A
to B. And that's a look at productivity relief as
a way of city of driving improvements across the sect
to relieve you know what is pretty stressful times out there.
Speaker 1 (02:42):
Okay, let's look at some of the numbers. Exchange rate
fifty seven US sns. I suppose in some ways that's
a positive. Certainly not a positive pricing fuel, but it
is for our export income, receipts, inflation maybe getting up
to four plus four percent. Interest rates when so are
going up, and if you were to use the nz
(03:03):
X fifty for instance, as a baromouth are down seven
percent in March. None of these numbers, Cameron Bagrie, are
really working for us.
Speaker 2 (03:12):
No, they're not. What's going on if you've got the
bigger picture, Jamie's, it's what's called a negative supply shock.
When oil prices up adds to input cost as the
input to a costs go up across the board. That's
bad for earnings, it's bad for growth, and flashing goes Hi.
I think Treasury came out with an estimate I think
(03:33):
about two weeks ago they said worst case scenario and
flacing was going to be three point seven percent. That's
probably looking the best case scenario. At the moment, we're
going to see something with a four percent handle in
front of it. And the scary numbers is that we
start to see a little bit of persistence about this
sort of shock. The view I guess three weeks ago
was I hopeing this is going to be a short
lived affair does not look like it is going to
(03:56):
be a short lived affair. With each sort of passing
day looks like it's going to be longer of duration,
longer duration Skyle event or the bigger the economic On
the other side, as a general principle, we're seeing growth
estimates revised there is they turn by economists, and inflation
estimates revised up. So that's bringing about what's called the statuation.
(04:16):
So that's not a word that we like to sort
of throw around, but that's going to be the reality
of about three months.
Speaker 1 (04:21):
Yeah, it's a dirty word to throw out there. Okay,
weren't with a brilliant line, but I just want you
to crystal ball goese for me, Cameron baggery, best and
worst case scenarios. Even under the best case scenario of
this war ending tonight or tomorrow morning, Trump declaring victory
and getting out of there, that doesn't appease the Iranians.
And the other thing is the supply chain issues won't
(04:44):
correct themselves overnight. So what's best case scenario.
Speaker 2 (04:49):
Well case scenario is they do a deal. What that
deal looks like, we don't know. But if we can
do a deal, then you're going to see the forward prices.
My oil prices are going to come back down. And
what we're seeing historically is that oil prices go up
(05:10):
then I collapsing right back. Then it's just the question
of how long they stay high. So we hope move
mats sort of part. But the problem is, look, even
if you start to refire up these oil fields, you've
got to get the pressure out up and that's no
easier fear. You know, the refineries that are starting to
shut down, well the chemistry parts, so you can't sort
(05:31):
of flick a switch on and off and sudden that
you magically producing refined fuel. The other side, so that
the reality is that this is going to take a
few months. I think settle down and it is step
you can think about the sure Over the past sort
of four to five years, the global environment has just shifted.
We're no longer in a low risk, low volatility world.
(05:53):
It's like shocks are becoming the new normal, whether it
be oil, whether it be shipping, whether it be something
to do with that era called the Great Moderation, which
is sort of nineteen ninety three to twenty nineteen brow
low inflation, not much volatility is behind us. Were just
(06:14):
in an era that feels a lot more like the
sixties and seventies. Was that a bad era? No? Was
it all more volatile area? Yes? And you just need
to learn how to deal with that and manage risk.
Speaker 1 (06:24):
Okay, Cameron, thanks for your time going from the twenty
eighth floor to the ground floor to have a chat
to us independent economist and the chair of Transport New
Zealand urging some constraint are the poor old transport companies
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