NZ Economy: Returns From Dairy, Log Exports Booming
May 5th, 2010
In boosting the milk payout to its second highest level on record, Fonterra told farmers to expect much the same again next year. In-hand income for farmers should reach or top $8bn, up around $1.6bn on last season. Some of this will be offset by higher costs for farmers in drought-afflicted regions. It’s predicted the extra payout, beyond the level indicated earlier in the season, will be used to pay down debt. But there should also be an economic stimulus in regions like Southland, which has not suffered from drought.
- – - NOT A SUBSCRIBER? – - — – - – - – - – - – - – - – - – - – - – - –
UNDERSTAND GOVERNMENT WITH NEW ZEALAND’S NO.1 POLITICAL LETTER
THE TRANS TASMAN POLITICAL LETTER
Published since 1968. Hot On The Spot from Wellington and Canberra. An indispensable guide to what’s happening and why it’s happening…in Politics, the Economy, Legislation and Regulations. Analysis and Forecasts which are impartial, accurate, reliable and timely. Published each Thursday 46 times per year.
To subscribe http://transtasman.co.nz/home/special-introductory-offer
- – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – - – -
Rural regions are already being stimulated by the huge expansion of the log trade to China, with the price of logs surging last month to hit an 18-month high, 50% above the mid-2009 low. In the four months to February, log exports were up 125% on the same period 12 months previously, yielding an extra $360m. Log exports in the 2009 year were worth $950m. Logging companies have been rebuilding their workforces, and trucking companies expanding their fleets to cope with the demand out of China. These and other factors point to the economy recovering more strongly than forecast. But it’s not clear yet whether output from exporters and import-competing industries, which fell 12% over the years from 2005, has fully recovered the ground lost.
Copyright © Trans Tasman Media Ltd
Duncan Cotterill