Wednesday, November 11, 2009

NZ Milk Price and Dollar Rising

The New Zealand dollar rose after dairy co-operative Fonterra increased its forecast payout to farmers to $6.05 per kilogram of milksolids, from the $5.10 announced in September.

The NZ dollar rose as high as US73.63c, its highest since October 29, on the news and finished its local session at US73.58c from US72.25c at 5pm on Friday.

This may be good news for U.S. dairy farmers because all imports from our largest supplier will more.

1 comment:

  1. Fonterra Raises N.Z. Milk Forecast, Boosting Farm Incomes, Kiwi

    Fonterra accounts for about 40 percent of the global trade in butter, milk powder and cheese and sells products in more than 140 countries. It had been expected to raise its forecast after global milk powder prices soared to a 15-month high last week on rising demand and concern that declining output in Europe, the U.S. and Australia may tighten supplies during 2010.

    The New Zealand dollar climbed to as much as 73.62 U.S. cents, the highest since Oct. 29, in New York trading. It traded at 73.45 cents at 3:20 p.m. in Wellington, buoyed by the higher forecast and as the dollar extended its decline after the Group of 20 governments agreed to keep stimulus measures in place.

    ‘Big Gain’

    “A big gain like this in the payout forecast just shows how much volatility there is in the market,” Fonterra Chairman Henry van der Heyden said in a statement. “We’re making the most of the opportunities for our farmers. But we also know there’s a risk of rapidly rising prices potentially bringing on more milk from other countries.”

    Fonterra is the nation’s biggest export earner and has increased its forecast 33 percent the past seven weeks, reflecting sharp advances in global milk powder prices.