Food & Agribusiness Talking Points 21-12-2015

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American Avian Flu Affecting Exports to China

Sanderson Farms, the third largest poultry supplier in the US has seen profits crash by 71% on the back of an import ban from China. The US has seen an import ban on poultry put in place this year after an outbreak of the Avian Influenza virus. This ban has had particular effect on leg meat, where Chinese consumers prefer the dark meat of the leg, in comparison to US consumers preferring white meat. For the full article click here.

Cattle Prices at 30 Year High

The Eastern Young Cattle Indicator (EYCI) finished the year at 587c/kg, up 211c/kg from last years end on the back of a lower Australian dollar and tighter supply in the US market. Australia met its cattle import quota to the US for the first time since the US-Australia FTA came into effect, where supply in the US has led to less exports. This has allowed Australia to experience less competition in their second and third largest beef markets in Japan and Korea. Decent seasons returning after a few lean years due to drought are also reasons for the rebound. For the full article click here.

Low Fertile Chinese Land to get Assistance

A yearlong research program looks to increase yield of wheat, corn and soybeans in some of the less fertile soils in China. This initiative looks to benefit some 70 million farmers which will utilise a research fund of 36 million RMB called the ‘Second Granary’. The main target of this initiative targets farmland in Shandong, Henan, Anhui and Jiangsu Provinces; these provinces lie on the Huanghuaihai Plain and contribute 35% of the countries grain. For the full article click here.

NZ Dairy Herd Shrinks

With global dairy prices shrinking by 65% from February 2014 and August 2015, the New Zealand dairy herd has shrunk for the first time in a decade. Farmers have culled stock to deal with production costs, with sanctions on Russian imports and a decrease in Chinese demand leading to a drop in prices. The Reserve Bank of New Zealand warned that half of the countries dairy farmers were expected to make losses in 2014-2015, and four in five farmers have experienced negative cash flows. The drop in the NZ dollar has cushioned these blows, which follows a strong performance from the NZ economy in recent years. For the full article click here.