New Zealand dairy farmers feeling more confident about opening cheque books is good news for the economy.

●    Goldman Sachs has boosted its previous expectations for global whole milk powder prices from US$3350 a tonne for 2011/12 to US$3700 and from US$3050 a tonne for 2012/13 up to US$3600 - compared with a historical average of about US$2100 a tonne.

●    Dairy products had a relatively small international market and less government intervention than in the past, which had led to some significant price swings in the past five years.

●    New Zealand is still heavily reliant on agriculture and the major agricultural export earners for this country, dairy, sheep and beef, forestry, they continue to enjoy high returns thanks to high commodity prices.

●    If there were a sustained fall in commodity prices the dollar could be expected to come off as well, helping to provide an offset.

●    A lower valued currency can make exports worth more when they are converted back to New Zealand dollars.

http://www.nzherald.co.nz/agriculture/news/article.cfm?c_id=16&objectid=10736823