The National Farmers Federation had released startling figures of the impact the dollar was having on the farm-gate prices of individual commodities, reported Queensland Country Life (23/8/2007, p. 5).
One cent equals $190 million: Just a one-cent appreciation in the dollar wiped about $7/bale off the value of cotton, $3/tonne off sugar and grains prices and 0.5c/litre off dairy prices. According to the NFF, a one-cent move up or down also affected farmers’ hip pockets by $190 million, so a lower dollar even in the short term would help farmers to actually enjoy generally high commodity prices, particularly for wheat.
Attractive wheat prices: Commonwealth Bank commodities strategist Tobin Gorey said prices now were attractive for hedging, but the CBA’s preference was still to hedge in Australian currency. "Wheat prices are very, very good at the moment, and the Aussie dollar has dipped, so to keep getting above $300/tonne is very attractive and unusual. There’s an uncertainty about what the pool will be this year and who will run it, so there’s perhaps some extra motivation this year to look at that aspect of risk management."
Queensland Country Life, 23/8/2007, p. 5