After plenty of action last week, this week has been a quiet one for economic data, with just a couple of statistical releases.
Farm sales still strong.
The Real Estate Institute of New Zealand (REINZ)’s latest Rural Property Statistics shows there were 439 farm sales in the three months to May 2021, up 78.5% on the same period last year.
This looks strong, and it is, but like many other economic data releases of late the annual comparisons have been inflated by coming off a low base from the slump in activity during the Level 4 COVID lockdown. Comparing the three months to May 2021 with the three months to April 2021 indicates a bit of a slowdown, with sales down 8.4% on that basis.
For the full year to May 2021, 1,716 farms were sold, 52.0% more than were sold in the year to May 2020. Dairy farms were up 124.3%, dairy support up 77.8%, grazing up 38.5%, finishing farms up 65.7%, but arable farms were down 28.4%.
The median price per hectare for all farms sold in the three months to May 2021 was $28,250, 21.8% higher than that for the three months ended May 2020. However, the median price per hectare was down 0.9% compared to the three months to April 2021.
The REINZ All Farm Price Index, which adjusts for differences in farm size, location, and farming type, increased 5.2% in the three months to May 2021 compared to the three months to May 2020. Compared to the three months ending April 2021 the Index increased 1.9%.
Imports continue to recover.
May saw another big increase in goods imports, but goods exports were also up, according to Statistics NZ’s monthly Overseas Merchandise Trade statistics.
Goods imports were worth $5.40 billion in May 2021, up 31.3% compared to May 2020. There was strong growth for the major import commodities, but especially vehicles, parts, and accessories (up 194.0%) and petroleum (up 67.7%). However, it should be noted that May 2020 was a weak month due to COVID-19 and May 2021’s imports were still $170 million lower than those for May 2019.
Meanwhile, goods exports were worth $5.87 billion in May 2021, up 8.5% on May 2020. Dairy, meat, and forestry were all up. Movements for key commodities follow:
- Milk powder, butter, and cheese up 11.6% to $1.48 billion.
- Meat and edible offal up 1.0% to $782 million.
- Logs, wood, and wood articles up 26.0% to $521 million.
- Fruit down 1.4% to $632 million.
- Preparations of milk, cereals, flour, and starch (largely infant formula) down 3.1% to $222 million.
- Wine down 4.5% to $133 million.
In addition, exports of eggs, honey, and other edible animal products were down 20.2% to $42 million; live animals up 123.7% to $21 million; and wool up 42.3% to $31 million.
The net result was a monthly goods trade surplus of $469 million. This was down sharply from a $1.29 billion surplus for May 2020 but is more than April 2019’s surplus of $175 million. Trade surpluses are typical in May months.
For the year ended May 2021, goods exports were worth $59.52 billion, down 1.0% compared to the year ended May 2020. Looking at the key export commodities:
- Milk powder, butter, and cheese down 7.0% to $15.34 billion.
- Meat and edible offal down 4.5% to $7.90 billion.
- Logs, wood, and wood articles up 21.8% to $5.25 billion.
- Fruit up 1.1% to $3.74 billion.
- Preparations of milk, cereals, flour, and starch down 6.6% to $2.25 billion.
- Wine down 2.1% to $1.88 billion.
In addition, exports of eggs, honey, and other edible animal products were up 18.1% to $518 million; live animals up 61.2% to $507 million; but wool was down 14.2% to $386 million.
Goods imports for the year ended May 2021 were worth $59.58 billion, down 2.9% compared to the year ended May 2020. The biggest drop was for petroleum products, down 42.4%.
On an annual basis, the net result was a goods trade deficit of $62 million. This was down sharply from a $733 million surplus for the year ended April 2021, but it is much less than the $1.27 billion deficit for the year ended May 2020.
NIWA Soil Moisture Data.
NIWA’s latest soil moisture maps (as at 9am Thursday 24 June) show much of Marlborough and Canterbury’s soils continuing to be significantly wetter than usual for this time of year. In previous weeks the east cost of the North Island from Hawkes Bay to Wairarapa had been significantly drier than usual, but this week this area has shrunk to a small coastal area of southern Hawkes Bay.
Exchange Rates
The NZ Dollar was virtually unchanged for the week against the Trade Weighted Index. It was up against the Australian Dollar and the Renminbi, unchanged against the Euro, and down against the US Dollar, UK Pound and Japanese Yen.
Source: Reserve Bank of NZ
Wholesale Interest Rates
Over the course of the week the yield for the 90 Day Bank Bill was unchanged at 0.33%, while the 10 year Government Bond yield was up 2 points to 1.80%.
The Reserve Bank will next review monetary policy settings (including the OCR) on 14 July.
| This Week (24/6/21) | Last Week (17/6/21) | Last Month (24/5/21) | Last Year (24/6/20) | |
| OCR | 0.25% | 0.25% | 0.25% | 0.25% |
| 90 Day Bank Bill | 0.33% | 0.33% | 0.32% | 0.30% |
| 10 Year Government Bond | 1.80% | 1.78% | 1.82% | 0.97% |
Source: Reserve Bank of NZ