Economy, economy, economy.
National have had the benefit of a well performing one for the last 2 election results, but unless that milk market perks up, they’re staring down a very tricky campaign in 2017.
New Zealand’s central bank has warned that a prolonged slump in dairy prices could get worse, forcing interest rates down to maintain growth in the farm-reliant economy.
Reserve Bank of New Zealand governor Graeme Wheeler said today the price of whole milk powder had plummeted 63 percent since February 2014 and was still under pressure.
“High stockpiles of whole milk powder in China, the increase in global milk supply, and the trade diversion issues involving Russia make for a very uncertain future, with the potential for further downward pressure on global dairy prices,” he said.
The Reserve Bank keeps a close eye on milk prices because New Zealand is the world’s largest dairy exporter, selling some NZ$15 billion a year, about a third of the country’s entire exports. Read more »