Early Bird I Monday January 13th 2025

Prime Minister heads to United Arab Emirates to seal primary sector deal, global dairy prices drop in first 2025 auction, and summer rain fails to ease drought concerns for North Canterbury farmers. Welcome to Proud Country's Early Bird - The top things you need to know that impact rural New Zealand delivered to you by 5am, because who doesn’t need better chat beyond the weather!   Prime Minister heads to United Arab Emirates to seal primary sector deal Primary sector exporters are set to benefit from immediate tariff elimination under a new trade agreement with the United Arab Emirates, as Prime Minister Christopher Luxon heads to Dubai today to witness its signing. The Comprehensive Economic Partnership Agreement will remove duties on 98.5 percent of New Zealand's exports to the UAE from day one, creating significant opportunities for farmers and agricultural exporters in the $1.3 billion two-way trading relationship. The agreement opens up greater access to a wealthy market of nearly 10 million people, while establishing the UAE as a strategic hub for reaching broader Middle Eastern markets. The Gulf nation already serves as a major transit point, with over half a million people traveling through to New Zealand annually. Trade Minister Todd McClay will sign the agreement, which forms part of the government's broader strategy to double New Zealand's export value over the next decade. The deal is expected to particularly benefit meat, dairy, and horticultural exporters looking to expand their presence in premium Middle Eastern markets. The agreement also aims to strengthen investment flows between the two countries, potentially opening new funding channels for New Zealand's agricultural technology and sustainable farming initiatives. The UAE has shown strong interest in renewable energy projects and sustainable agriculture technologies. The Prime Minister's four-day visit will focus on positioning New Zealand as a sustainable technology innovator and highlighting investment opportunities across the primary sector. He returns to New Zealand on Thursday morning.   Global dairy prices drop in first 2025 auction Global dairy prices have softened at the first auction of 2025, with the overall price index dropping one-point-four percent on Tuesday. This marks the second consecutive decline in prices following strong Chinese buying activity before Christmas. Whole milk powder, which represents half the auction volume, fell two-point-one percent. Skim milk powder recorded a similar decrease of two-point-two percent, continuing its downward trend from the New Year's Eve Pulse auction where it fell nearly three percent. Not all products saw declines, with several value-added dairy commodities showing strength. Mozzarella recorded the strongest gain with a three-point-six percent increase, while butter lifted two-point-six percent. Cheddar and butter milk powder also made modest gains of around one percent. The softer prices come despite significantly reduced product volumes at auction, with whole milk powder down nearly sixteen percent and skim milk powder offerings down fifteen percent compared to the previous event. Market analysis indicates Chinese buyers are operating on shorter-term purchasing patterns after significant stockpiling in November, when their whole milk powder imports jumped twenty-five percent above last year's levels. Meanwhile, New Zealand milk production continues to track ahead of last season, with November figures showing a two-point-seven percent increase in milk solids compared to the same time last year.  The next Global Dairy Trade auction is scheduled for January twenty-first.   Primary sector ends 2024 strong despite dairy dip Our primary sector finished 2024 on a high note, with strong gains across most agricultural commodities despite a seasonal easing in dairy prices at the start of 2025. The ANZ World Commodity Price Index edged up zero-point-two percent in December, delivering an impressive fifteen percent gain for the year. When measured in New Zealand dollar terms, the monthly gain strengthened to three-point-six percent, boosting returns for local producers. Meat sector performance remained robust, with annual returns up twenty-three percent despite a small monthly decline. Beef prices showed particular strength with a two-point-four percent lift in December, pointing to positive returns for farmers in the coming months. Lamb prices eased three-point-three percent after nine consecutive months of increases. The horticulture sector continues to show promise, with kiwifruit leading both production and price gains. Industry forecasts indicate further expansion in coming years, providing positive signals for growers considering crop diversification. While forestry remained flat due to ongoing weak Chinese demand, the overall primary sector outlook remains positive. Dairy prices started the new year with a modest one-point-four percent decline at auction, though this follows significant gains throughout 2024. The strong performance across most primary sectors, combined with a more favorable exchange rate, positions farmers and growers well for the start of 2025, particularly in the meat and horticulture sectors.   Summer rain fails to ease drought concerns for North Canterbury farmers Recent summer rainfall has brought welcome relief to North Canterbury's drought-affected farmers, though groundwater and river levels remain concerningly low across the Hurunui district. The Christmas period delivered up to one hundred millimetres of rain along coastal areas and fifty millimetres in the Amuri Basin, marking the second significant rainfall event since Labour Weekend. The moisture has restored some greenery to paddocks that had been parched by nearly a year of drought conditions. The timing provides a stark contrast to last summer, when the situation was so severe that Agriculture Minister Todd McClay declared a medium-scale adverse event in March. However, the current wet and cool conditions present new challenges for farmers with ripening crops awaiting harvest. Coastal areas have received the bulk of the rainfall benefit, while inland areas continue to face water shortage challenges. The district has experienced a season of extremes, with recent large fires occurring despite snow remaining visible on the mountains. Many Hurunui sheep farmers have already sold their lambs as stores and are now focusing on preparing ewes for mating and winter feed planning. Improved meat prices have provided additional support for farmers managing through the recovering drought conditions. The Hurunui Adverse Events Committee will meet on January twenty-first to assess the district's drought recovery progress, though officials caution that groundwater tables and river levels need significant improvement before the drought can be considered over.   All Blacks join shearers for major charity event Rural and sporting legends are joining forces next month for a major fundraising event in Mid Canterbury, with All Black greats and top shearers aiming to shear three thousand sheep in eight hours for cancer support services. The Shear for Life event at Hinds brings together shearing royalty including Sir David Fagan, Darin Forde and Marg Baynes alongside rugby legends Jock Ross, Ian Kirkpatrick and Billy Bush. The event returns after raising ninety thousand dollars for local cancer charities in its last running in 2019. The February first event at the Ewing family farm will combine serious shearing with family entertainment, including activities for children, live music, and food stalls. A monster auction will round out the day, featuring prizes ranging from an Elephant Hill hunting trip to signed rugby jerseys. Additional sporting stars joining the event include All Blacks Andy Earl, Richard Loe, Corey Flynn and Grant Perry, while the shearing contingent welcomes Dion Morrell, Dixy Lynch, Tom Wilson and Jules Burney. Proceeds from the day-long event will support the Ashburton Cancer Society and Hospice Mid Canterbury. The shearing starts at eight in the morning, with family activities running from eleven until three, followed by the auction at four.  See omnystudio.com/listener for privacy information.