New Zealand feeling the heat — it’s a dry heat

The government declared a drought in the Northern part of New Zealand earlier today and there has been a strong reaction.

• Dairy NZ said milk production in the North this month is about 20% lower than February last year.
• The country’s farmer lobby is fretting about the potential implications and the high NZD.
• Fonterra said it continues to forecast full-year milk production up 1% but warned of strong NZD.

(thanks to Giles for the head’s up)

In general, barking from the public and companies about a strong currency rarely results in action and NZ leaders have been clear they won’t intervene. That said, the drought is worth keeping an eye on.