Drought creates problems for New Zealand dairy farmers

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New Zealand dairy farmers are facing a nightmare of epic proportions. The country’s worst drought in 30 years is costing farmers millions of dollars daily. And, as the drought rages on, the problems only mount.

"We are beginning to see a decline in milk production — in fact, a sharp decline in some areas — and farmers are considering slaughtering capital stock, which will result in lower future production and reduced revenue," New Zealand Finance Minister Bill English said in an NBC News report available here.

Rabobank International expanded on English’s statement, reporting that New Zealand milk supplies could be as much 20 percent below 2012 through the third quarter, according to Bloomberg.

“Milk supply has been falling below prior year levels since February by an increasing margin with each week that passes,” Rabobank said.

Cow slaughter has also increased.

Read, “New Zealand Milk Supplies Seen Slowing on Drought, Rabobank Says.”

The situation is so dire for the country that the government has banned outdoor water use until further notice as the country’s reservoirs are running dry. NBC News reported three days ago that Wellington, the capital of New Zealand, has a 19-day water supply left. See, “New Zealand parched as worst drought in 30 years takes toll.”

New Zealand is an important exporter of dairy products. It is yet to be seen whether the problems there will open the door for other countries, such as the United States, to step in and supply more dairy products to China and other Asian countries. 



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