Today, I would like to discuss the critical economic contribution that the sector makes to the New Zealand economy, and comment on three issues: •  the impact of commodity prices on New Zealand’s exchange rate;  •  the importance of our dairy export trade with China; and  •  the level of dairy farmer debt  I will begin by talking about the sector’s export performance.
Dairy export revenue has risen dramatically over the past two decades (figure 1). At $ billion, dairy exports make up almost a third of New Zealand’s annual merchandise exports. Figure 1: NZ Dairy exports (annual, New Zealand dollar terms)  Source: Statistics New Zealand. BIS central bankers’ speeches  1  Growing export receipts have been driven by higher prices and increasing animal numbers.