Record farmgate prices boost red meat sector despite milk supply growth, NIWA data shows critical soil moisture deficits for farmers, and US tariffs put pressure on venison exports.

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Record farmgate prices boost red meat sector despite milk supply growth

Farmers are seeing strong returns across dairy, beef and lamb sectors with milk production up 2.8% season-to-date despite dry conditions now slowing North Island growth rates, according to Rabobank's latest agribusiness outlook. The milk supply growth reflects a wider trend from export regions, though Rabobank notes Australian production dropped 1.4% in February as dry conditions impacted their industry.

Farmgate pricing remains robust with Fonterra maintaining a firm $10/kgMS mid-point milk price forecast. Rabobank's analysis shows global dairy commodity prices seeing upward momentum with whole milk powder holding around $3,994 USD per tonne and butter climbing to $7,550 USD. This price strength stems from healthy international demand despite supply growth in most major export regions.

Red meat farmers continue experiencing record returns with Rabobank reporting bull beef, prime, and manufacturing cow prices sitting 35-45% above five-year averages. This represents more than an additional $1.50/kg cwt compared to previous seasons. While drought conditions across the North Island have increased cattle offloading by 7%, Rabobank data shows overall slaughter numbers remain down 2% year-on-year for the export season.

Sheepmeat returns show similar strength with lamb prices consistently above $8.00/kg nationwide and export values averaging $13.48/kg, up from $10.09 last February. Rabobank Senior Animal Protein Analyst Jen Corkran says that UK and EU markets have significantly boosted demand, now accounting for 44% of total export value for lamb this season, reducing farmers' traditional reliance on the Chinese market.

Rabobank reports urea prices have plummeted 12.8% to $620 per tonne, reaching levels not seen since January. Agricultural Analyst Paul Joules explains the drop comes as Indian demand failed to materialise as expected, though market watchers caution volatility may continue depending on Chinese export policies and global supply dynamics.

NIWA data shows critical soil moisture deficits for farmers

March brought challenging conditions for farmers across much of New Zealand with below-normal rainfall recorded throughout most of the North Island and parts of the South Island. The latest NIWA Monthly Climate Summary reveals well below normal soil moisture levels across most of the North Island, creating potential stress for pastoral farmers and growers.

While most regions experienced dry conditions, some areas bucked the trend. Gisborne, northern Hawke's Bay and the eastern South Island received above normal or well above normal rainfall. For farmers in these areas, particularly those in drought-prone eastern regions, this rainfall provided welcome relief heading into autumn. The wettest single day occurred at Milford Sound with 186mm recorded on March 17.

Temperature-wise, the South Island experienced notably warm conditions with above or well above average temperatures recorded. Parts of Wellington, Taranaki, northern Hawke's Bay, Bay of Plenty, and Northland also saw warmer than average temperatures, with Timaru recording the month's highest reading at 33.6°C on March 17. These elevated temperatures, combined with low rainfall, have accelerated soil moisture loss in many farming regions.

Soil moisture levels, critical for pasture growth and crop development, ended March well below normal across most of the North Island and northwestern South Island. This creates challenging conditions for farmers heading into autumn, particularly for dairy operations and those looking to establish winter crops. Only Banks Peninsula, Selwyn District, and parts of Hawke's Bay maintained above-normal soil moisture levels.

For the main centres, Auckland and Tauranga recorded the highest average temperatures while Tauranga also claimed the driest and sunniest conditions. Christchurch was the wettest centre, while Dunedin experienced the coolest temperatures and least sunshine.

 

Vet medicine approvals need same fast-track as human drugs

Animal and Plant Health NZ is urging the government to streamline approval of veterinary medicines by recognizing overseas certifications, similar to recent changes for human medications.

The organization welcomes the government's move allowing human medicines to be approved in under 30 days when they have approval from two recognized international jurisdictions. Animal and Plant Health Chief Executive Dr Liz Shackleton says the same approach should be extended to animal medicines.    

Currently all animal medicines must undergo full approval processes through the Agricultural Compounds and Veterinary Medicines Group within New Zealand Food Safety, creating delays in bringing new treatments to market. The recent Ministry of Regulation Agricultural and Horticultural Products Regulatory Review specifically recommends increasing the use of international regulators' assessments and supporting harmonization of requirements.

The industry fully supports applying the 'rule of two' approach to veterinary medicines, allowing products already approved by two trusted overseas jurisdictions to be used in New Zealand when there are no unique local considerations. This represents an immediate, tangible way for regulators to harmonize and ease workload pressures.

Dr Shackleton says members are unclear why this opportunity hasn't already been implemented, noting the industry has provided regulators with multiple options including this approach.

 

US tariffs put pressure on venison exports

New Zealand's venison industry faces fresh challenges as the US administration announces a 10% tariff on chilled and frozen venison imports, potentially squeezing margins for Kiwi deer farmers.

The timing is particularly significant as the industry continues investing in its North America Retail Accelerator programme, aimed at building premium retail presence in US stores. DINZ CEO Rhys Griffiths says the tariff creates a new cost layer in the value chain, making the industry's coordinated market development work even more critical. The question remains who will ultimately bear the cost, with retailers likely to resist shelf price increases that could reduce sales.

The venison sector now faces intense pressure within the premium protein category where it competes with grass-fed beef, bison, elk and plant-based alternatives. Industry leaders are concerned this could influence purchasing decisions, particularly among new or occasional venison consumers not yet committed to the product.

While the tariff presents a significant challenge, DINZ believes coordinated action and continued retail focus can help New Zealand venison maintain its premium position in American stores despite the new economic headwinds.

 

First game animal herd management plan underway for sika deer

The formal process to establish New Zealand's first Herd of Special Interest has begun, with the Central North Island sika deer herd proposed for special management status. This comes almost 12 years after the HOSI legislation passed, giving hunters greater responsibility in managing valued game animal populations.

Hunting and Fishing Minister James Meager says the initiative puts hunters at the forefront of conservation efforts across more than 125,000 hectares of Kaimanawa and Kaweka Forest Parks. The proposal from the Central North Island Sika Foundation aims to improve herd health while reducing environmental impacts of deer populations. For rural landowners, this approach complements existing management efforts and recognises the value of community-led conservation.

The proposed management plan focuses on enhancing hunter participation in sika deer management while improving forest regeneration. For farmers and landowners bordering these conservation areas, better deer management could reduce pressure on farm boundaries and improve overall ecological outcomes.

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