New Zealand – Fonterra may cut 2014/15 milk payment – ANZ note

An ANZ note says that

• Fonterra may cut 2014/15 milk solids payment
• From current forecast of $7/kg to NZ$6.25/KG

• “Dairy prices are now tracking marginally lower and the NZD higher than the RBNZ assumed in the June Monetary Policy Statement. At this stage we don’t think the combination is material enough to warrant a change of view regarding monetary policy and the OCR; a hike in July still looks odds on. However, the situation across various commodity markets is unfolding quickly, and with the NZD barely budging, financial conditions are tightening in material fashion”

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Dairy news is a bit of a downer at present:

• New Zealand dollar falls after soft milk auction
• Overnight dairy auction news and the New Zealand dollar