Fonterra Payout Boost Welcome But Banks Warned Off
Rt Hon Winston Peters
New Zealand First
Leader
Member of Parliament for Northland
25 AUGUST
2016
Fonterra Payout Boost Welcome But Banks Warned Off
New Zealand First welcomes Fonterra Cooperative Group lifting its 2016/2017 forecast Farmgate Milk Price by 50 cents to $4.75 per kilogram of milksolids (kg/MS), but is warning the banks against ‘going feral’ in order to recoup money lent to the sector.
“For all dairy farmers throughout New Zealand, it is welcome to see Fonterra’s benchmark forecast finally having the noses of farmers just in front of breakeven, albeit, with the dividend,” says Mr Peters.
“Whilst farmers cannot bank on a forecast that won’t stop some banks from turning the screws on already stressed farmers and sharemilkers.
“The banks will have clocked Real Estate Institute of New Zealand (REINZ) statistics showing that the median dairy price per hectare rose ever so slightly over the past year. On a price per kilogram of milk solids basis, it leapt 10.6% in July over June.
“We’ve always maintained some banks wouldn’t go feral until the market turned and they saw an upgraded Fonterra forecast as the starting pistol for getting back their pound of flesh. It makes New Zealand First’s Receiverships (Agricultural Debt Mediation) Amendment Bill vitally important.
“Before anyone cracks open the ‘silver top’ because of this forecast, it comes at a very fragile time for the world economy. China is edging closer to a Japanese-like liquidity trap and if it goes down that hole then all bets are off.
“Our best insurance is for Mr Key to get over himself and for New Zealand to prioritise its final time chairing the Security Council to bring Russia back in from the cold, both diplomatically and economically.
“Until that happens, subsidised European and American farmers will see the same signals Fonterra has seen and we’ll re-enter this yo-yo price cycle. We need Russia back in the fold to soak up the subsidised milk our farmers are having to compete against,” Mr Peters said.
ENDS