Agri markets trade on

$2.08-$2.16/kg Prime traditional steers, 435-545kg, at Canterbury Park

$1.13/kg Boner Friesian cows, 525kg average, at Temuka

NZX capital markets used by farmers have been active through the covid-19 uncertainties and the early days of nationwide lock-down. The electronic markets continue to be fully operational, supervised by staff working in split teams over recent weeks. Trading and settlement of all activity has performed well, including under the pressure of heavy trading volumes, NZX chief executive Mark Peterson said.

Apart from equities the main markets used by farmers are the Fonterra Shareholders Market and the Dairy Derivatives market for futures and options contracts.

After an extended period of stability at $4 Fonterra supply shares and their matching Shareholders Fund units have bounced around in a 25c band below that level over the past three months.

At any time the share/unit price loss was a maximum of 6%, attributable to the covid-19 virus disruption.

The relatively mild reaction has probably been because of Fonterra’s financial recovery and incident-free exporting.

Fonterra’s share compliance date has been extended from December 1 to April 20 as a response to its lower share value and more stringent bank loan requirements. The application period for cease notifications ended on February 29.

The S&P NZX primary sector equity index has dropped about 20% since the beginning of the year and its present level around 9000 is where it was in September 2017.

The parent NZX50 index is down 25%, giving some indication primary sector companies are faring better in the covid-19 bear market.

The primary index includes all NZ listed companies involved in agriculture, horticulture, viticulture, aquaculture and forestry.

Market leader by capitalisation, A2 Milk Company, has remained above $15 a share since January as demand in China for infant formula remained strong. Hugh Stringleman hugh.stringleman@globalhq.co.nz

DOING WELL: Agribusiness companies are faring better than those in other sectors, NZX analytics head Julia Jones says.

Global Dairy Trade prices haven’t dropped as much as feared.

Julia Jones NZX

At $16.30 at the time of writing it was 15% up on March 2019.

By contrast, major wine company Delegats dropped 40% from $12 at the start of the year to $7 today though most of its sales are made in export markets such as Britain, Australia and the United States. It is down 30% on a year ago. Fisheries leader Sanford’s share price has dropped the NZX50 average of 25%, from $8 to $6, some 8% lower than one year ago. At about $3.50 a share horticultural producer and processor Seeka is also down 25% over the past three months and the past 12 months.

Rural services provider PGG Wrightson dropped 30% from January’s level of $2.50 to $1.75 now.

Its latest market announcement confirmed a scheduled interim dividend of 9c will be paid on April 3 but the board’s guidance of earnings about $30 million for the full year will be reviewed.

NZX analytics head Julia Jones said continued use of the markets shows farmers are habitual traders and agribusiness companies have been less hurt by covid-19 than other sectors.

“Global Dairy Trade prices haven’t dropped as much as feared,” she said.

Heightened world trade risks had renewed interest in dairy derivatives, NZX reported. In the first quarter of 2020 NZ milk price futures and options trades were 86% higher than in Q1 2019.

In the bigger dairy supply chain, ingredients (whole milk powder, skim milk powder, butter, anhydrous milk fat) futures and options year-to-date trades were 12% higher.

The futures market for milk price is at $7.22 for this season and $6.35 for next season. ACROSS THE RAILS - SUZ BREMNER

The week the sale yards closed

WHAT was supposed to be another busy week of sales was cut short by Wednesday as yards shut their gates against covid-19. The past week has rewritten New Zealand’s history books and it is the first time sale yards, which have been an essential part of Kiwi farming since the 1870s, have no activity nationwide, aside from the standard two weeks off over Christmas each year.

It was hoped the yards would be deemed an essential service, especially in areas where drought means farmers need to offload stock but as the week progressed it became evident that would not be the case. It left a sense of disbelief throughout the farming community as it feels a little like we have lost a right arm. It has also left livestock agents with a huge task to try to move livestock so spare a thought for them.

We are, however, fortunate to have technology giving us a virtual world that can be used to sell stock. While for many it will not be the same as getting in among it at the yards and being able to view and put a hand on animals personally, it has created an avenue of selling that wouldn’t have been there had this happened 30 years ago. Alongside livestock agents doing plenty of work ringing, texting, sending photos and so on, there are a growing number of online trading platforms accessible to farmers.

Life as we know it has changed. We won’t be going to the sale yard cafe in the near future for a catch-up and a quick cuppa before heading out to the sheep pens. But once we have kicked covid-19 to the curb we will be back on the rails, chatting about the weather and solving the world’s problems.

suz.bremner@globalhq.co.nz

Find out more about AgriHQ at agrihq.co.nz

Increase your farms productivity with PFP’s Lime Prills

• Cost effective – low application rates dramatically reduce on-ground cost of Lime • With Lime the higher the purity and the fi ner the grind, the better the results • Optimum pasture nutrient availability achieved between pH 6.0 and 6.3