Commodity Price Index increases 3.7% m/m in June - ANZ

Con Williams, Agri Economist at ANZ, suggests that June was a warm month weather-wise and the same applied for the ANZ Commodity Price Index, which increased 3.7% m/m.

 Key Quotes

“There was broad-based strength across all the major categories. However, producers won’t be celebrating too loudly. In many cases world prices are still below the same time last year and the NZD rose over the month too. Farm-gate prices increased just 0.3% m/m in June (-5.9% y/y).

In terms of sector specifics:

In the month of June seafood prices led the charge, jumping 8.2% m/m. There were notable lifts in hoki fish and squid prices.

Dairy was the next biggest gainer, up 4.8%. Cheese (+9.2%), skim milk powder (+8.4%), butter (+5.5%) and whole milk powder (WMP) (+3.7%) showed the way. SMP prices played catch-up to those in Europe, while WMP lifted due to lower seasonal supply from New Zealand. Milkfat prices are being lifted by US consumers moving back toward natural products with nutrition experts increasingly saying butter is a better choice than alternatives. Cheese demand is being driven by a quite different trend of robust foodservice demand (pizza, burgers etc) in both developed and developing markets.

Horticulture experienced a 4.2% m/m lift with higher volumes of new season product hitting the shelves in Europe and Asia. First half pipfruit sales have been notably strong, especially in Asian markets.

Meat prices were boosted 2.6% m/m by better lamb (+4.4%), beef (+2.0%) and skins (+3.0%) prices. Sheepmeat and skin prices have started to recover thanks to tightening New Zealand supply. This is driven by a smaller 2015 lamb crop, lower stocking rates and high early season turn-off.

And lastly forestry (+1.7% m/m) and aluminium (+2.3% m/m) prices both lifted. The lift in forestry was driven by log (+2.1%) and wood pulp (+2.8%) prices.”