Farm prices are continuing to come under pressure across markets, the latest World Bank pink sheet data gives beef prices for August 18% down on August 2014, sheep meat prices down 21%, and soyabeans down 17%.
Milk prices have also fallen again. The FAO Dairy Price Index for August was down by 9.1% on July – the biggest falls being for milk powders. It has been reported that New Zealand dairy cow numbers have fallen for the first time in 10 years, with Fonterra predicting a 5% decline in NZ milk production for 2015.
A strong US dollar also continues to impact on US farm exports, along with Avian Influenza related restrictions, and trade restrictions by Russia. Slower economic growth in China is a key factor driving down commodity prices, and recent data has indicated that the Chinese factory sector is contracting, and that GDP growth may have fallen below 7%. There are also indications that the US and EU economies are also weakening, this poorer global economic outlook is likely to continue to weigh on farm prices, with significant impacts on farm incomes for 2015.