I think most people are aware that milk prices have dropped substantially and Dairy farmers are expecting their incomes for this season to more than halve. Radio NZ reports–
Federated Farmers National Dairy Chairperson Andrew Hoggard said the overnight drop was worse than expected. “Pretty much just adds to the pain we’ve already got. So for a lot of farmers, where we’re at right now, isn’t sustainable for most farmers long-term. “We do need a payout [of at] least around $6.00, sort of that long-term average,” he said.
“So $4.50 for this season would be a huge kick in the guts, and then depending what we’ve got next season, it could be even worse.”
The problem is exacerbated by the rising NZ dollar, driven up by high GDP and the myth that the “economy is growing by 3%”. What economy is that? Well apart from dairying, theres very little else going on other than raging house sales and construction in Auckland as a result of mass immigration, and the Canterbury earthquake recovery spending. Both of these events give artificial boosts to the economy by allowing it to report a deceptive GDP to debt ratio.
However, the Nats can’t do much about this, so it looks like NZ’s mainstay industry will have to cop it sweet. What this means down the track for NZ I’m not sure. Key keeps talking about a diversified economy, but manufacturing is not anything great, and all the overseas trade agreements in the world aren’t worth a pinch of goat excrement if we don’t actually sell anything as a result.
Key also says new trade agreements will help us sell more dairy products, at the same time as he says the increase in world milk supply was the reason for the price drop. How he misses out on seeing this as pathetic political double talk I do not know.
Respective socialist govts of Clark and Key put us on the immigration treadmill. Now it looks like no one’s got any idea how to get us off, even when its making it harder for us to operate the real industry that has always been the backbone of the country.
TrueblueNZ 
Ah, but their is a solution. Original free trade arguements went like this, thanks to David Hume, if you import more than you export, you lose your gold (gold was money), and then because the nation has less gold, that means prices and wages go down. Lower prices and wages, mean that we can produce more at a lower price, so we export more. As we export more than we import, we get our gold back, prices and wages go back up, making export costs higher.
So original free trade meant no government interference, and by allowing the free market to adjust, your exports would equal imports over time. But this isn’t what we have. Every $1 billion that is lent to us, or used to buy our farms by the Chinese, means we temporarily have more money which can only be used to buy Chinese goods. This is why we are importing more than we are exporting. And a high dollar is the market’s way of saying, we don’t need as many farm exports to buy Chinese imports.
So what I am advocating is ‘free market trade’, it means that anytime exports and imports are not equal, they adjust the exchange rate, to get to that equilibrium. With today’s so called free trade, it allows countries to manipulate other’s economies so they export more and import less. The equilibrium of so called free trade is where loans and imports equal exports. The more loans you receive, the less you export..
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