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NZ Economy Splits: Why Farmers Aren’t Splurging Yet

New Zealand 03.10.2025
Sourse: dairynews.today
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Despite high earnings from commodity prices, New Zealand farmers are cautious about spending, prioritizing debt repayment amidst economic challenges and rising operational costs.
New Zealand farmers are experiencing increased earnings due to elevated commodity prices, yet they are refraining from significant spending. Although the overall New Zealand economy experiences headwinds with a 5.2% unemployment rate and a 0.9% quarterly contraction in GDP, the agricultural sector, especially dairy producers, is flourishing. However, caution driven by debt and operational costs hinders financial relief to urban areas. Fonterra's milk price reaching $10.16/kg MS, up from previous $7-$8, provides a slight margin over the breakeven price of $8.57/kg MS. Upcoming sales and windfalls are expected to reduce debts further, but cautious trends persist.

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