Farm product prices next year are shaping up to be similar to the season just ended.
Forecasts by several banks and the Ministry of Agriculture and Forestry's (MAF) situation and outlook for New Zealand agriculture and forestry, all point to returns little different from the season just past, with a high exchange rate once again dampening benefits from growing demand.
Both the National bank and MAF forecast a United States-New Zealand exchange rate next year of around US70c.
In the case of meat and wool, a global decline in animal numbers along with growing demand has underpinned forecast steady prices, while demand for dairy continues to go from strength to strength.
The National Bank also acknowledged some uncertainty from competing milk supply and consumer resistance at sharp price increases of up to 40% for some commodities, but still forecasts an increased payout from last season of 50c kg of milk solids to $6.60 kg/ms for the coming season.
In addition to the milk price forecast, it was picking a 30c a kg/ms dividend, similar to the season just ended.
It based that optimism on China, where milkpowder sales in the 2009 calendar year increased from $250 million to $610 million, but other factors were the influence of the oil price on consumer spending power in the Middle East, the sell-down of stockpiled powder in the US and Europe and the strength of the US dollar.
The National Bank said while demand for New Zealand meat protein and market prices were strong, industry issues of capturing a greater share of margins throughout the supply chain remained.
The bank forecasts a mid-season price for a 17.5kg lamb of $80, the same as last season.
Beef cow numbers were also in decline, and the bank suggested that could result in higher premiums for beef from traditional beef breeds.
It forecasts a mid-season bull price of $3.15 a kg, $3.35 a kg for a heifer and $3.40 a kg for a steer, an increase across the board of 15c a kg.
MAF warns the economic crisis has forced a shift away from prime to lower value cuts, but while beef consumption was expected to grow in the next decade, all of that would come from developing countries.
Due to that uncertainty, MAF has forecast a 15c a kg decline in average price.
Little movement was expected in wool prices, but demand for strong wool was expected to grow as the housing sector recovers.
The National Bank said despite wool's "inherent excellent qualities," wool prices continued to lag.
MAF statistics showed the New Zealand deer herd at 1.2 million, down 600,000 on the peak in 2004.
Venison production in the year to March 31 was down 27%, but there were signs of some restocking, with the number of stags slaughtered exceeding 50% of the total kill for the first time since 2004.
China was also reason for growth in log exports, which last year accounted for 42% of all wood exports, which were at record levels.
MAF expected booming log prices to continue until 2011, but while the volume of forestry-based exports was expected to grow 18% in the coming year, the average value per unit volume exported was expected to be 12% lower.