Log prices chopped

The forestry and logging industry is facing lower prices for their products, while sheep and beef farmers are getting higher prices for their stock, Stats NZ said today.

Prices received for raw materials produced by the forestry and logging industry dropped in the September 2019 quarter by 9.1 percent due to low global demand for logs. In contrast, the prices received by sheep and beef farmers rose 7.6 percent due to higher prices paid by meat product manufacturers.

"The prices of logs for export dropped 21 percent in the September quarter, while prices in the domestic market were down 5.1 percent," business prices manager Bryan Downes said.

"Domestic and export log prices don't always move in line because of factors such as exchange rates, differing log grades and types, and market demand - for example, manufacturing activity can influence demand for timber pallets used for shipping goods."

Trade data shows China is the largest consumer of New Zealand's export logs with $3.0 billion sent in 2019.

"The fall in log prices coincides with the US-China trade dispute and reports of growing log stockpiles in China," Mr Downes said.

"At the same time, international demand for red meat has been rising, largely due to the African swine fever outbreak in China with reduced supplies of pork being substituted with alternative products."

New Zealand consumers are also seeing meat prices increasing domestically as seen in Food price index: October 2019, with bacon and ham prices rising by more than 20 percent for the year to October 2019. The news story Avocados at lowest price in almost three years has more information on recent changes in food prices.