Thursday, 17 December 2020 05:55

US Dollar will set pace

Written by  Sudesh Kissun
BNZ senior economist says the US dollar will determine milk payout. BNZ senior economist says the US dollar will determine milk payout.

The US currency will determine how the milk payout plays out, says BNZ senior economist Doug Steel.

He told Rural News that, in some ways, the recent GDT price strength looks like catch up due to the recent declines in the US dollar.

A lower US dollar tends to lift product prices that are denominated in that currency.

“Of course, the flipside of a lower US dollar is a higher NZ dollar, while a higher NZ dollar – in itself – tends to put downward pressure on milk price, it very much needs to be seen in the context of product price movements in offshore markets.

“These things do not move in isolation. It is the balance that matters.”

Steel points out that it was no coincidence that the 2013-14 record $8.40 milk price was paid when the NZD/USD was above 0.80.

“That said, a higher NZD/USD will limit the upside to domestic milk prices, but likely more so for next season than the current one.”

More like this

Good times return

Following several years of pain, farmers and growers are facing a decent upswing in commodity prices, say economists.

Featured

Govt Commits $4m to Rural Wellbeing Initiatives

While the District Field Days brought with it a welcome dose of sunshine, it also attracted a significant cohort of sitting members from the Beehive – as one might expect in an election year.

Shane Jordan Beats Brother to Win NZ Timbersports Title

While not all sibling rivalries come to blows, one headline event at the recent New Zealand Rural Games held in Palmerston North certainly did, when reigning World Champion Jack Jordan was denied the opportunity of defending his world title in Europe later this year, after being beaten by his big brother’s superior axle blows, at the Stihl Timbersports Nationals.

National

Machinery & Products

Chinese Tractors Eye Western Europe

Having caused quite a stir at last year’s Agritechnica, Chinese manufacturer Zoomlion is reported to be conducting large-scale field trials…

Franz Grimme Turns 80

Franz Grimme recently celebrated his 80th birthday earlier March and continues to be an entrepreneur with passion and pioneering spirit,…

» Latest Print Issues Online

The Hound

What A Choice!

OPINION: If you ask this old mutt, the choice at the next election isn't shaping up as a contest of…

Your Call!

OPINION: A mate of yours says we're long overdue for a reckoning on what value farmers really get for the…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter