Forum Archive Index - February 2003

["mvanv" <mvanv@xtra.co.nz>]

---

Bill wrote

The dollar is the unknown quantity and would suggest the present 
dry conditions would be of more pressing concern, seeing some 
farmers are either down to once a day milking or drying off their 
herd about 3 months early.

Farmers are hardworking, resilient folks and have to put up with 
many ups and downs and feel thay will somehow pull through.

Most of this seasons production has been forward sold under a hedging 

program taken out by Fonterra at 40 odd cents to the U.S. dollar.

I don't know how long these hedging contracts run for but my guess is

they will start to run out next season (2003 -04).

Each 1.0  cent appreciation in the N.Z. dollar against the U.S. dollar

reduces dairy farmers payouts by 10 cents/kg milk solids.

In my opinion Fonterra are being very optomistic estimating a payout

of $3.70/kg ms for next season.

 Mike