Dairying could save south?

The dairy boom should insulate the south from the worst of the fallout from the international credit crisis.

. . . top economists at Westpac and the BNZ said they expected Southland’s rural-based economy would be relatively sheltered from the storm, which has been widely predicted to have a knock-on effect on every saver, pensioner, investor and home owner in New Zealand.

But dairying and those downstream who benefit from it won’t be immune.

Fonterra will announce the final payout for last season on Wednesday and will give an indication of what this season’s will be.

There had been an expectation that we might get more than the $7.90 a kilo we’re getting at the moment. But the international price is dropping and the poisoned milk scandal in China will also have an impact.

One thing is sure, if as some are predicting this season’s payout drops as low as $5.50 a kilo the costs that have shot up with the increased pay out will not come down as far or as fast.

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