News of a seventh successive fall in global dairy prices will hit New Zealand’s neglected regions hard, Labour’s Finance spokesperson Grant Robertson says.
“Dairy prices have fallen yet again, down another 1.3 per cent overnight. They have fallen 30 per cent since March and are down 55 per cent since last year’s peak.
“These are not just numbers on a spread sheet. The fall in dairy prices has a significant effect on incomes. There is an expanding $13 billion economic black hole that will suck in regions reliant on dairy and supporting industries.
“Comments from the Reserve Bank last week that ‘there is little evidence that export prices are about to recover’ shows how overly-optimistic predictions of price rises from National and Treasury have been.
“In December John Key said the long-term price outlook was strong and prices were going to ‘start going back the other way’. Treasury recently forecast the Global Dairy Trade Index would hit 870 this month and steadily rise; it’s now 674 and going down.
“The lion’s share of this pain will be felt in regions which rely heavily on dairy farming. More than $3 billion is estimated to have been lost over two seasons from the Waikato economy, over $2.7 billion from Canterbury and Marlborough, and almost $1.8 billion from Otago and Southland.
“We want the dairy industry to thrive but farmers can’t carry such a disproportionate burden of economic growth.
“New Zealand needs a modern, diverse economy that creates well-paying jobs across all industries. Sadly the Government doesn’t have a plan to get there,” Grant Robertson says.