Fonterra’s $3.2b capital return to farmers set to boost rural incomes and NZ economy
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
With 11 of the last 12 dairy auctions have recorded price falls, the sheer magnitude of the falls is bringing other factors in to play, according to the latest ASB Farmshed Economics Report.
"With dairy prices down by 37% on a year ago, the NZD has finally come under some pressure" says Nathan Penny, ASB rural economist.
"The NZD has passed its peak. We expect the NZD to trade at around 85 US cents for the rest of the year.
"The dairy price falls are also a major reason why we've pushed back our interest rate call." ASB Economics now expects the next OCR increase in March 2014 rather than their previous call for a December 2014 hike.
