Dairy beats tourism for export earnings

Dairy has overtaken tourism as New Zealand’s biggest export earner, contributing nearly $10 million to the economy, company chair Henry Van der Heyden said in a newsletter to suppliers.

He also passed on the good news that the price for Whole Milk Powder went up 13.7% in this morning’s globalDairyTrade auction, to US$3,437 per tonne.

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The graph for WMP prices from 2004-2009 shows prices are above the long term average again, though still well below the 2007 bubble.

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An 8.3% increase in dairy prices contributed to a 4. 6% gain the ANZ Commodity Index in October, the seventh month in a row to record an increase.

The gains in international prices have somewhat offset a soaring kiwi dollar, which is up more than 45% from its sub-50 U.S. cents low in March. The currency’s continued strength in October largely wiped out the increase, expressed in New Zealand dollars, with kiwi-denominated commodity index easing 0.4% last month.

Sawn timber rose 6.1% on a global price basis, and wood pulp prices advanced 4.2%. Wool prices increased 7.1% and the price of skins gained 3.5%. Beef prices slipped 3.9% and apples declined 1.7% over the period.

The increase in dairy prices has outpaced the rise in the value of the dollar which means there isn’t a risk to the forecast payout for the season – yet.

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