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

Alliance Group's Heat Pump Programme Wins Energy Award

Alliance Group's $16 million programme to install innovative heat pump systems at its Otago and Southland processing plants wins a New Zealand Energy Excellence Award after cutting annual emissions by more than 24,000 tonnes of CO₂e.

Chopped Salad Trend Arrives With NZ's Fresh Spring Veges

Bigger, bolder salads packed with colour, crunch and flavour are making headlines overseas — and the arrival of fresh spring vegetables means New Zealanders can now get chopping too, creating their own Great Kiwi Spring Salad.

National

Machinery & Products

» Latest Print Issues Online

The Hound

'LinkedIn Greens'

OPINION: The same mainstream media muppets that brought you Jacindamania in 2017 have been flat out pimping for the Opportunities…

UK Warning

OPINION: Your old mate reckons the atrocious way farmers in the UK are treated by their lords and masters in…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter