ANZ economist Con Williams thinks the strong New Zealand dollar will increase the pressure for Fonterra to cut the forecast milk payout.
The board won’t make a decision until its September meeting but prudent farmers will continue to keep costs down just in case.
One factor which might help the price of milk is the drought in the USA.
Peter Griffin at Sciblogs has an infographic of the impact of the drought which shows a likely increase in dairy prices of 3.5 – 4.5%.
Cactus Kate Keeping Stock Kiwi Blog No Minister Whaleoil Rivetting Kate Taylor Inquiring Mind Macdoctor A Bee of a Certain Age Lindsay Mitchell Valerie Davies A Touch of the Crazy Hand Mirror Roarprawn Teaching the Teacher Letters From Wetville Look Up At The Sky John Key Bill English Over the Fence National MPs Election results Alf Grumble MP Anti-dismal Offsetting Behaviour visible hand Life Behind the Iron Drape Barbar’s meaty issues MIlking on the Moove NZ Conservative Something Should Go Here coNZervative Quoteunquotenz Credo Quia Absurdum Est Liberation Dim Post Not PC Clint Heine Liberty Scott YourNZ Imperator Fish Mydeology interest.co.nz Scoop Business GonzoFreakpower Rob’s Blockhead Blog Stephen Franks Oswaldbastable M and M Hamish in Auckland Raymond Huber Autism & Oughtimsms Karl du Fresne Story People Zen Bandit Lady Garden PM of NZ Pundit Brian Edwards Media Bowalleyroad Eye to the Long Run Robert Guyton Big News kiwipolitico Laughy Kate Artandmylife Craft is the new black Well behaved women rarely make history Sciblogs Open Parachute Motella Bill Ralston & Janet Wilson John Ansell Will Type for Food Watching Brief Oamaru Opera House Thoughts from 40 Sth Tumeke! Fairfacts Media Show Dave Gee life from right field Latitude 44 Stellar Cafe BK Drinkwater Monkeyswithtypewriter Mydeology Poneke
Last week I saw Synlait’s latest newsletter. Note this was before the last auction which saw a 3.5% increase in prices. It said milk price was at worst place since low point of 2009 when payout ended on $4.72, however, factoring in present day conditions and exchange rate that translated to only $4.15 currently. Note, the newsletter very clearly stated they were not saying this low figure would be the payout for 2013, just that it was where the commodity price was now.
You will no doubt realise that is a very scary figure. And you’re right, the US drought might help in the medium term.
Mark, that’s a very scary figure.
It was Synlaits July 2012 monthly report … if you want a copy just drop me a line and I’ll email: mhubbard@ihug.co.nz