July 31, 2006

New Zealand to increase price of dairy exports in near future

Key New Zealand agricultural exports would rise in price by over three percent in world markets by 2008 due to lower subsidies from the European Union, a report by the country's treasury said.

The report said changes to agricultural subsidies meant farmers in Europe would receive fixed payments, rather than payments based on production levels. Thus cattle and dairy numbers would fall, resulting in lesser production of dairy products.

The report predicted that the world price for butter would go up by around 3.4 percent, with smaller increases for skim milk and whole milk.