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Falling NZ Dollar Double-Edged Sword For Dairy

Falling NZ Dollar A Double-Edged Sword For Dairy Farmers.

Dairy Farmers of New Zealand Chairman Charlie Pedersen said today that "the falling of the NZ dollar is a double-edged sword for dairy farmers". While the falling dollar increases export returns the cost of farm inputs increases as our dollar weakens. This raises the costs of such things as fertiliser, fuel, machinery and chemicals that are imported and used on farm. Typically expenditure in these four areas alone makes up over 40% of total farm expenditure."

"Ironically Dairy Farmers do not get the full benefit of the falling NZ dollar because of the dairy industry's forward cover policy (Forex). This policy is a deliberate smoothing mechanism, which over the long term will not benefit or penalise the income of dairy farmers said Mr Pedersen It just smoothes the vagaries of fluctuating currencies.

"I am disappointed at the one sided comments that we have been hearing that touts the falling NZ dollar as being only a gain for dairy farmers - there is definitely a down side for farmers in our falling dollar. To put things in context average payments to dairy farmers 10 years ago were 52c a kg higher than what they were at the end of last season," concluded Mr Pedersen.

ENDS For Further information Charlie Pedersen 025 463 480 Kevin Petersen 04 473 7269



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