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Every cent rise costs farmers $115m
30 Oct 2003
Australian farmers are looking for improved commodity prices to offset the strengthening $AUD, which was trading above US 70 cents this week. The $AUD was worth about US 65 cents at the start of 2003, so the year's gain to date represents an appreciation of about 25 per cent against the $US.
National Farmers' Federation figures suggest that for every percentage point the $AUD rises against the $US, Australian farmers suffer a combined annual loss of $115 million.
NFF president Peter Corish says 70 per cent of Australia's agricultural production is exported, mostly priced in $US. Fortunately, Australia's interest rates are low, so that is helping farmers cope with the currency appreciation and to recover from the drought. But if interest rates rise along with a stronger $AUD, it becomes a "double whammy", Mr Corish said.
Stock Journal, 30/10/03.
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