The Government says dairy prices have fallen further than it expected and it now believes they could go even lower.
Photo: RNZ / Alexander Robertson
The Finance Minister told MPs today that dairy prices are 40 percent lower than they were in March.
Finance Minister Bill English Photo: RNZ / Alexander Robertson
Bill English said neither industry experts nor the Government foresaw the extent of the dairy price collapse and how tough conditions would become for farmers.
He said a fall in prices of this magnitude on a sector that generated 20 percent of exports would have flow on effects for economic growth.
The Reserve Bank cut the official cash rate today - noting that dairy prices had fallen about 20 percent in the last six weeks.