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

Lamb price down, but not weak

While lamb prices are starting the new season at around 16% below last year’s levels, they are not outright weak, according to the BNZ.

Payout lifts

The forecast milk payout for this season has gone up by 40c and Fonterra farmers can thank Chinese consumers.

Ag exports a ‘Godsend’

Primary product prices will fall further this year but remain at reasonable levels before some improvement in 2021, according to BNZ senior economist Doug Steel.

Featured

 

Covid minces meat prices

Farmgate red meat prices are taking a hit as Covid continues to disrupt dining out businesses around the world.

Not a very cherry start!

What was expected to be a bumper cherry crop this year has been badly hit by untimely wet weather.

Hort sector denied!

MPI has turned down a request from the horticulture sector to declare the recent hail and rainstorms, that decimated many orchards around the country and cost growers millions
of dollars in lost income, as an ‘adverse event’.

National

Machinery & Products

Good growth year for Claas

While many sectors of the agricultural machinery were hit by the ravages of Covid-19, the effects of the pandemic did…

Green machine frugal on fuel

According to the industry respected independent DLG PowerMix test, John Deere appears to be the best choice of tractor for…

App takes pressure off

TRS Tyre & Wheel, owned by Trelleborg Wheel Systems, has introduced the TLC Plus App to the New Zealand market.

New MF 5S series arrives

Just before Christmas, Massey Ferguson quietly released details of the successor to its popular MF 5700S range in the shape…

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Seriously?

Your old mate reckons the nomination of the New Zealand Dairy Industry Awards (NZDIA) management team as a finalists in…

Good riddance!

The Hound reckons 2021 is off to a rollicking start with news that professional whinger and anti-farming drone Martin Taylor…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter