Early Bird Monday I April 7th 2025

Record farmgate prices boost red meat sector despite milk supply growth, NIWA data shows critical soil moisture deficits for farmers, and US tariffs put pressure on venison exports.

Welcome to Proud Country's Early Bird - The top things you need to know that impact rural New Zealand delivered to you by 5am, because who doesn’t need better chat beyond the weather!

 

Record farmgate prices boost red meat sector despite milk supply growth

Farmers are seeing strong returns across dairy, beef and lamb sectors with milk production up 2.8% season-to-date despite dry conditions now slowing North Island growth rates, according to Rabobank's latest agribusiness outlook. The milk supply growth reflects a wider trend from export regions, though Rabobank notes Australian production dropped 1.4% in February as dry conditions impacted their industry.

Farmgate pricing remains robust with Fonterra maintaining a firm $10/kgMS mid-point milk price forecast. Rabobank's analysis shows global dairy commodity prices seeing upward momentum with whole milk powder holding around $3,994 USD per tonne and butter climbing to $7,550 USD. This price strength stems from healthy international demand despite supply growth in most major export regions.

Red meat farmers continue experiencing record returns with Rabobank reporting bull beef, prime, and manufacturing cow prices sitting 35-45% above five-year averages. This represents more than an additional $1.50/kg cwt compared to previous seasons. While drought conditions across the North Island have increased cattle offloading by 7%, Rabobank data shows overall slaughter numbers remain down 2% year-on-year for the export season.

Sheepmeat returns show similar strength with lamb prices consistently above $8.00/kg nationwide and export values averaging $13.48/kg, up from $10.09 last February. Rabobank Senior Animal Protein Analyst Jen Corkran says that UK and EU markets have significantly boosted demand, now accounting for 44% of total export value for lamb this season, reducing farmers' traditional reliance on the Chinese market.

Rabobank reports urea prices have plummeted 12.8% to $620 per tonne, reaching levels not seen since January. Agricultural Analyst Paul Joules explains the drop comes as Indian demand failed to materialise as expected, though market watchers caution volatility may continue depending on Chinese export policies and global supply dynamics.

NIWA data shows critical soil moisture deficits for farmers

March brought challenging conditions for farmers across much of New Zealand with below-normal rainfall recorded throughout most of the North Island and parts of the South Island. The latest NIWA Monthly Climate Summary reveals well below normal soil moisture levels across most of the North Island, creating potential stress for pastoral farmers and growers.

While most regions experienced dry conditions, some areas bucked the trend. Gisborne, northern Hawke's Bay and the eastern South Island received above normal or well above normal rainfall. For farmers in these areas, particularly those in drought-prone eastern regions, this rainfall provided welcome relief heading into autumn. The wettest single day occurred at Milford Sound with 186mm recorded on March 17.

Temperature-wise, the South Island experienced notably warm conditions with above or well above average temperatures recorded. Parts of Wellington, Taranaki, northern Hawke's Bay, Bay of Plenty, and Northland also saw warmer than average temperatures, with Timaru recording the month's highest reading at 33.6°C on March 17. These elevated temperatures, combined with low rainfall, have accelerated soil moisture loss in many farming regions.

Soil moisture levels, critical for pasture growth and crop development, ended March well below normal across most of the No