The Country 30/01/26: Emma Higgins talks to Jamie Mackay

Rabobank’s senior ag analyst previews the bank’s NZ Agribusiness Outlook 2026 - titled "Keeping one move ahead".

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Episode Transcript

Speaker 1 (00:00):
For the first time in twenty twenty six. Let's welcome
on to the country Rabobanks senior ag analyst Emma Higgins,
who's one of the authors of the New Zealand Agribusiness
Outlook for twenty twenty six titled Keeping One Move Ahead. Emma,
let's start with our biggest primary sector export, dairy. Nine

(00:20):
falls in a row to wind out twenty twenty five.
That we've started with two positive auctions. What's your gut
feel on this one.

Speaker 2 (00:27):
Yeah, it's a great way to start twenty six after
a very disappointing end to last year. I think we
need to be cautiously optimistic here. The world still has
a lot of milk. The vat's a fault, particularly in
this part of the world as well, so we remain
cautiously optimistic about what the final endpoint will be for
twenty five twenty six, and then thinking ahead to the

(00:48):
new season, I think we might see a slightly more
cautious opening number this year.

Speaker 1 (00:52):
The good news is beef. I mean, of all the
primary sectors, red meat has to be the most promising
of the whole lot.

Speaker 2 (01:00):
One one hundred percent. It is so great that most
of the red met space is just having such a
good time, you know. Beef has started off at such
a firm level for twenty six. Edie pricing we think
is going to be the theme for this year. A
lot of it will obviously depend on your West demand,
but the other side of that is that our local
supply is likely to be pretty tight as well, So

(01:24):
on the whole we're expecting to continue to see excellent
pricing for our beef farmers this year.

Speaker 1 (01:29):
Ditto for sheep meat.

Speaker 2 (01:31):
Yeah, pretty much the same story, right, tight supply here
in New Zealand but also globally as well, and our
friends in the Northern Hemisphere have been exceptionally good at
enjoying our lamb and that's been really helpful for ad demand.
So on the whole again, things are looking pretty positive
in that sheep space.

Speaker 1 (01:50):
Emma Higgins with us from Rabobank and those are all
largely very good news stories. Perhaps the jury's out, are
wee bit on deiry, But when it comes to interest
rates in foreign exchange, which is something else you look
at in your agribusiness outlook for twenty twenty six, interest
rates are as low as they're going to go, and
we are going to see a hike at some stage
this year.

Speaker 2 (02:10):
That's certainly our view. We do think that we are
likely to see the economy gather pace across the course
of this year. We do think that probably the next
move is likely to be upward, although perhaps it might
not come until the second half of this year. Ultimately,
there's a lot of things happening in the world right
now and that will also influence things such as currency

(02:32):
rates as well. Likely to be incredibly volatile as the
start of twenty twenty six as anything to go by.

Speaker 1 (02:39):
Well, let's have a look at the currency rates, because
we're nudging sixty US sense now. We were trading down
at fifty six to fifty seven there for a while.
It's good news for US as a country because it
means we're worth more, But from an exporting point of view,
maybe a wee bit lower would be useful.

Speaker 2 (02:56):
Yeah, it would be absolutely. I guess well, I know
that at twelve months of year right now is sixty cents,
But in saying that, we're probably breaching that about now,
so you know, there might be a little bit more
upside to come. And as you say, not so much.
You know, super helpful when it comes to our export receipts,
but may be helpful in terms of potentially offsetting some

(03:17):
of the strengths that we might see in global fertilizer prices,
given that we import so much of that anto New Zealand.

Speaker 1 (03:23):
And you can read all about it in the Agri
Business Outlook for twenty twenty six. Hot off the press
from Rabobank. Emma Higgins, thanks for your time.

Speaker 2 (03:32):
As always, Thanks Jamie