The rising cost of production has been one of the most worrying issues for food producers these past months.
The world continues to pay good money for our food but the margins are slim as the bills for labour, fuel, fertiliser and other inputs mount.
That might be about to change, according to Westpac.
Its latest Weekly Economic Commentary highlights the impact higher interest rates are having on inflation.
It will be a slow descent back to some sort of normality, however, as the bank doesn’t forecast inflation to drop below 3% until the latter half of 2024.
But with Ballance cutting the cost of key fertilisers by $150/t in the past couple of days, the signs are improving.
Last week’s GDT auction showed a steadying of the downwards slope as well giving farmers hope that next season’s payout will top this season’s.
It’s still a bumpy road out there, no doubt, but there are some promising signals the market is beginning to find a bit of balance.
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