Christchurch Quake May Slam Economy, Too
Posted by: Bruce Einhorn / Bloomber Businessweek
Tuesday started out as a great day for New Zealand’s economy. Fonterra, the giant cooperative that dominates country’s dairy industry, announced that a 10.5 percent increase in its forecast payout to farmers to NZ$7.50. That’s higher than expected and is another sign that Kiwi dairy farmers are benefiting from rising milk prices and the strong demand from China and other emerging markets. Prices are already up 20 percent this year and, as my Bloomberg colleague Phoebe Sedgman and I reported last week, Fonterra CEO Andrew Ferrier believes high milk prices are “the new normal.” According to Ferrier, the price of whole-milk powder will likely remain at least 50 percent above their historical averages.
