NZ Stock Exchange to Track Dairy Pasture Growth
NEW ZEALAND - The New Zealand Stock Exchange (NZX) is planning to launch the New Zealand Pasture Growth Index (PGI), an innovative tool that predicts grass growth in the country’s dairy regions, according to Peter Duggan, Strategic Information Services, Bord Bia.
14 December 2010
1 minute read
According to the NZX, the PGI measures grass growth potential based on temperature, water balance and sunlight. The PGI takes a value between 0 and 1, where 1 indicates ideal conditions for grass growth and 0 means no growth potential.
The NZX claim that PGI accounted for up to 40% of the variability in annual national productivity between 1972 and 2009.
Moreover, most industry commentators believe that there is a strong correlation between a seasonally low PGI and seasonally high export value.
Considering some of the natural disasters that have occurred in New Zealand over the last year, this index would evaluate the effects of production on climate shocks. Additionally, the index can be used to track supply seasonality and shifts from usual seasonal timing. As New Zealand exports around 90% of its milk production in the form of milk powders, cheese and butter, this index will be of significant interest to the global dairy industry.
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