Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
6 OCTOBER 2016

Dairying’s Years of Pain Needs a Dollar Solution

New Zealand First says a Pollyanna-like view of dairying cannot hide the misery three years of low payouts and a high dollar are causing rural New Zealand.

“It is really tough out there for farmers, farm workers and communities that depend on them and this latest GlobalDairyTrade (GDT) shocker will not help,” says Mr Peters.

“We ought to be seeing price recovery and not a 3.8% fall on top of the previous one. I suggest the Pollyannas who talk up things try to live on breakeven for three years to see what we mean because that’s how long dairying has been at or below breakeven.

“Eleven months ago, Fonterra needed to average US$3000 a metric ton to hit a $4.60 milk forecast which ended at $3.90. Well into the 2016/17 season and Whole Milk Powder is languishing at US$2,681 a ton, so there’s a huge question mark over its $5.25 forecast.

“Farmers need to make big calls for their herds with mating underway so they need Fonterra to start under promising and to seriously start over delivering.

“Bad as this is a crucifying dollar just makes things worse. Despite what happened overnight with dairy the dollar remains just below US72 cents and both the Reserve Bank and this government are clueless as to what to do about it.

“The government loves the high dollar because it makes imports cheaper and that creates an illusion of wealth despite debt growing at $370 a second. As for the Reserve Bank, they need to remove the cloth from their eyes and look at Singapore’s monetary policy.

“Singapore has both low inflation and a steady currency as opposed to our rollercoaster Kiwi dollar. Singapore’s exchange-rate based monetary policy is a model for our export-based economy given the Reserve Bank has given up and National just doesn’t care,” says Mr Peters.

ENDS

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