Agricultural output increase forecast

Press, 9 October 1987, Page 2

Agricultural output increase forecast

By

OLIVER RIDDELL,

in Wellington Gross agricultural output is forecast by the Ministry of Agriculture to increase over the next two seasons. In its briefing papers to the Government, the Ministry said this rise would allow for a small increase in the volume of farm inputs, but not to levels sufficient to compensate for the run-down in capital incurred over the last two seasons. Farm-gate returns for sheepmeats were expected to decline in real terms as increasing quantities of lower-priced domestic sheepmeat displaced New Zealand sales in Britain. But firming skin-pelt prices should hold up the average lamb price, the papers said. Low prices Tor feed grains and falling interest rates were stimulating the

build-up of the beef herd in the United States. This should result in a shortage of domestic manufacturing beef, at least until 1988-89, during which time New Zealand beef prices would rise. From 1988 onwards, world supplies of coarse wool were expected to remain static, while the predicted growth in demand could see real prices increase by 12 per cent by 1992, the papers said. Real fine wool prices were forecast to increase by only 5 per cent as a result of increasing (mainly Australian) supplies. For dairy products, the papers said, some increases in real world prices were projected from 1990 onwards, particularly if production control policies in the United States and the European Community

were effective. With demand static real apple prices worldwide were expected to decline as global production rose and southern hemisphere producers competed more aggressively in northern hemisphere markets. World production of kiwifruit was forecast to increase by 270 per cent by 1990 and the real price received by the grower was likely to decline substantially — perhaps by as much as 25 per cent by 1992. The papers said that early indication for the 1987-88 season were favourable, with prospects for an Increase in the gross returns of sheep and beef farmers. Lambing , and calving percentages were expected to be high as a result of the dry, mild wihter, and the early announcements on prices had been good.