Dairy price ‘has reached the floor’

The latest ANZ Bank commodity price index shows a marked upturn in September.

The index showed a 3.5% rise, the largest monthly increase in 18 months, ANZ economist Steve Edwards says.

About 40% of the index is dairy products and the latest result shows the dairy price “has reached the floor and may be on the move upwards again”, Mr Edwards told NBR ONLINE.

The index is a further sign of gradually better growth, he says. The various forward-looking indices are showing signs of slightly better economic performance.

“We typically look out over the next two years looking at the business outlook survey and overlay it with consumer confidence and they have been holding up.

"They’re not pointing to a fantastic rate of growth, but its reasonably robust – just a fraction over 2.5%. It isn’t fantastic and it will be patchy, but it’s not bad for these times.”

The index itself shows 10 commodities lifting in price, with the largest two – skim milk and aluminium – rising 11% in September. Butter and whole milk powder was up 8%, wool and apple prices 6%, cheese 5%, venison 2% and logs and beef both by 0.5%.

On the downside, pelts fell 10%, casein and kiwifruit both slipped 2% and lamb dropped 1%.

“If the dairy components were excluded, the lift in the index would have been only 0.5%,” Mr Edwards says.

He says the kiwi dollar is dampening potential returns with meat prices, in New Zealand dollar terms, at a 26-month low.


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6952 0.0000 0.00%
AUD 0.8901 0.0000 0.00%
EUR 0.5907 0.0000 0.00%
GBP 0.5276 0.0000 0.00%
HKD 5.4294 0.0000 0.00%
JPY 78.9230 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1278.6 -9.430 2017-10-20T00:
Oil Brent 57.8 0.550 2017-10-20T00:
Oil Nymex 51.9 0.580 2017-10-20T00:
Silver Index 17.0 -0.177 2017-10-20T00:

Indices

Symbol Open High Last %
NZX 50 8124.1 8142.3 8124.1 0.07%
NASDAQ 6633.4 6640.0 6605.1 0.36%
DAX 13057.8 13063.6 12990.1 0.01%
DJI 23205.2 23328.8 23163.0 0.71%
FTSE 7523.0 7560.0 7523.0 0.00%
HKSE 28360.0 28519.8 28159.1 1.17%
NI225 21391.0 21489.3 21448.5 0.04%
ASX 5896.1 5924.9 5896.1 0.17%