Global dairy prices have fallen for the second time in a row and with whole milk powder down 23 per cent since October, the worrying start to the year continues, says Labour’s Finance spokesperson Grant Robertson.
“The global economy has had a volatile start to 2016, with markets plunging, declining confidence in China’s economy and commodity prices on the slide. New Zealand isn’t insulated from this, especially with our over-reliance on dairy.
“With Chinese demand for milk falling and European supply increasing the medium-term outlook for our dairy industry is poor. It shows how foolish National has been to rely on one industry rather than diversifying the economy so we can spread the risk in unpredictable times.
“Major analysts are predicting the forecast Fonterra payout to drop below $4.50 – well down on the break-even point for farmers. That will have a major flow-on effect for rural communities that are already struggling after last year.
“As a long-term manager of the economy National needs to take action to diversify the economy to help insulate New Zealand from major commodity shocks. Despite months of problems with the dairy price there has been no real effort from the Government to do this.
“There have been many dire predictions about 2016. New Zealanders will hope they don’t come to pass. But National has to do more than hope – they have to act,” says Grant Robertson.