Landmark forestry and horticulture deals signed in India, farm confidence reaches near-record levels in latest survey, and dairy forecasts point to back-to-back $10 milk payouts.

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Landmark forestry and horticulture deals signed in India

New Zealand's forestry sector is positioned for significant expansion in India following Agriculture and Trade Minister Todd McClay's signing of a comprehensive Memorandum of Cooperation during the Prime Minister's trade mission. The agreement comes as forestry exports to India have surged more than eight-fold, jumping from $9.5 million in 2023 to $76.5 million this year.

The forestry cooperation framework establishes pathways for sustainable forest management practices, cutting-edge research collaboration, and expanded education and capacity building programs. New Zealand exporters with established relationships in India now have formal government backing to develop partnerships across the entire timber value chain.

McClay stressed the agreement addresses key barriers that have limited forestry trade growth, while creating opportunities for knowledge sharing in areas where New Zealand has world-leading expertise. The cooperation extends to agroforestry systems that can benefit smaller landholders while delivering environmental benefits.

Alongside the forestry agreement, McClay signed a parallel horticultural cooperation arrangement focused on technical exchanges and post-harvest management. The kiwifruit sector represents the first major beneficiary, with the existing $600 million trade expected to grow substantially, potentially creating up to $1 billion in reciprocal benefits over the next decade.

 

Farm confidence reaches near-record levels in latest survey

Rural confidence has hit its second-highest level in a decade as sheep and beef farmers join dairy producers in anticipating stronger returns for the year ahead. The latest Rabobank Rural Confidence Survey shows net farmer confidence climbing to +44 percent, up from +34 percent in the previous quarter.

More than half of farmers now expect the broader agricultural economy to improve over the coming year, while just 8 percent anticipate worsening conditions. Sheep and beef farmers led the upward shift after experiencing strong beef prices and a significant recovery in sheepmeat returns in recent months.

Rabobank Country Banking General Manager Bruce Weir points to the powerful combination of rising commodity prices and falling interest rates delivering a substantial boost to farm profitability. The February 50-basis point OCR cut has further reduced borrowing costs, with 22 percent of optimistic farmers citing lower interest costs as a key factor in their positive outlook.

Despite the overall upbeat sentiment, dairy farmers moderated their expectations for their own farm performance compared to last quarter. Concerns about government policies, input costs and potential impacts from US tariffs tempered some enthusiasm in the dairy sector. Horticulturalists showed similar caution, with wine growers particularly affected by global oversupply issues.

Investment intentions remain positive across farming sectors with 29 percent planning to increase on-farm investment in the coming year. The survey also revealed a significant jump in farmers considering their operations easily viable, rising to 29 percent from 22 percent in the previous quarter.

 

Dairy forecasts point to back-to-back $10 milk payouts

Dairy farmers could be on track for two consecutive strong milk price seasons, breaking a 25-year trend that has typically seen record payouts followed by significant drops. DairyNZ's forecast for the 25/26 season shows a predicted milk payout around $10.13 per kgMS, similar to where the current season is finishing.

DairyNZ Head of Economics Mark Storey says international supply and demand appear well-balanced, reflected in major banks projecting $10+ milk prices for next season. However, high farm working expenses continue to persist at $5.94 per kgMS, resulting in a relatively high breakeven milk price of $8.57 per kgMS.

While on-farm inflation has cooled and input costs per unit remain relatively stable, minor increases in areas like electricity are occurring. An expected uptick in inputs such as feed and fertiliser is driving continued high expenses as farmers respond to positive milk prices and rebalance reductions made during recent high inflation periods. Interest rates are expected to continue tracking downwards, offering financial relief to many farmers coming off fixed-term lending next season.

Despite positive indicators, Storey emphasises the volatile nature of forecasting. International geopolitical contexts, trade tensions, exchange rate fluctuations, and recession risks add uncertainty to global dairy prices. Farmers are encouraged to use the current strong payout to prepare for potential market changes by maintaining healthy cash reserves and reducing debt where possible.

Looking at the current 24/25 season, successive positive international dairy auction results have contributed to a relatively high payout, with the national forecast sitting at $10.04 per kgMS against a breakeven milk price of $8.54. Many farmers are now managing drought conditions across several regions as the season ends, with DairyNZ encouraging attendance at partner events and webinars to understand options for managing impacts effectively.

 

Pig feed regulations under review to prevent disease disaster

New regulations could tighten how food waste is handled for pig feed as the Government moves to strengthen biosecurity protections against devastating diseases like foot and mouth. Biosecurity Minister Andrew Hoggard has opened consultation on four options to update the current food waste regulations for pigs.

The existing rules, introduced after the 2001 UK foot and mouth outbreak, require anyone feeding food waste to pigs to heat meat-containing waste to 100°C for one hour. However, these regulations have proven confusing for farmers and difficult for MPI to enforce effectively.

An outbreak of foot and mouth disease would devastate New Zealand's primary sector, with modelling showing an immediate halt to most animal product exports and potential ongoing losses around $14.3 billion annually. The 2001 UK outbreak, likely caused by pigs being fed contaminated meat products, demonstrates the severe risk poorly managed food waste poses.

The four options under consideration range from maintaining current requirements to a complete ban on feeding any food waste to pigs. Other alternatives include requiring food waste producers to treat waste before distribution or prohibiting only meat-containing waste.

Hoggard is encouraging all pig owners, farmers and rural businesses to submit feedback before the April 27 deadline, emphasizing the need for regulations that are practical and enforceable while providing robust protection for New Zealand's agricultural sector.

 

Farmers gain access to NZ-specific breeding data

B+LNZ has launched nProve Beef, a free online genetics tool designed to help farmers select bulls based on their specific farm requirements. The platform was introduced at the B+LNZ Genetics Beef Breeder Forum in Christchurch yesterday as part of the Informing New Zealand Beef programme.

The system allows farmers to filter bull selections according to their breeding objectives and provides a list of stud breeders offering animals that match these criteria. Dan Brier, B+LNZ's general manager farming excellence, explains the tool was developed with input from commercial farmers to address practical needs in bull selection.

A key feature of the system is the introduction of New Zealand-designed beef breeding indexes including Maternal, Terminal, and Beef-on-Dairy values. These provide economic measures for genetic traits specifically relevant to New Zealand farming conditions, whether for breeding replacements, finishing cattle, or supplying beef genetics to the dairy industry.

The development involved collaboration with industry organisations including Angus NZ, NZ Herefords, Simmental NZ, the NZ Beef Shorthorn Association, Performance Beef Breeders and AbacusBio. 

The platform is available without registration at nprove.nz, and B+LNZ will be running workshops nationwide to demonstrate how farmers can use the system. The seven-year INZB programme behind the tool is a partnership between B+LNZ and the Ministry for Primary Industries, co-funded through the Sustainable Food and Fibre Futures fund, with additional support from the New Zealand Meat Board.

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