Wellington - The New Zealand economy, which has been in
recession since early last year, suffered a 780-million-New-Zealand-
dollar (483.6-million-US-dollar) hit Wednesday when farmers were told
how much their milk will be worth next season.
The Fonterra Co-Operative, which is New Zealand's biggest single
exporter, said it would pay its 11,000 farmer-shareholders 4.55 New
Zealand dollars for every kilogram of milk solids - down from 5.20 a
kilogram for the season ending Sunday.
'This is the day the recession hit home,' said Federated Farmers'
spokesman Lachlan McKenzie.
Dairying is the critical driver of the New Zealand economy, with
exports of milk powder, butter and cheese accounting for 25 per cent
of foreign-exchange earnings.
'These numbers are bleak,' McKenzie said. 'If you live in the city
and think you're immune from this, think again. It's a hell of a lot
of money that isn't coming through the front door of the economy.'
Fonterra Chairman Henry van der Heyden blamed low international
dairy prices and the rising value of the New Zealand dollar for the
slump in milk money, which reached a record 7.90 New Zealand dollars
a kilogram only two years ago.
He said moves by the European Union and United States to subsidize
their dairy exports would delay the recovery of international prices,
already depressed by the recession in key markets.
Van der Heyden said he recognized that many dairy farmers faced a
very tough year in the new season, starting Monday.
USA
Your Talkback on this Story