LITTLE over a year ago, New Zealanders were still talking about a “white-gold rush”. Strong prices for milk were prompting sheep and cattle farmers to convert to dairy, and Chinese firms were coming in to buy up agricultural land and milk processors. Inevitably, influx has led to glut. Prices have fallen to their lowest in more than ten years (see chart). Farmers in France, Britain and Belgium have recently been staging protests against low milk prices, but few places are as badly affected as New Zealand, whose dairy industry produces a quarter of its export earnings.
On August 7th Fonterra, a co-operative owned by New Zealand farmers which is the world’s largest dairy-export firm, said it expected to pay its members NZ$3.85 ($2.55) per kilogram of milk solids in the current season, ending in May 2016. That is less than half the record price of NZ$8.40 it was paying two years ago, and well below breakeven for many...
from The Economist: Business http://ift.tt/1IKt051
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