Essay

This Essay is covering the stuff which was learned on GBE paper. Essay has explored the impact of a recession on “Fonterra” the biggest company in New Zealand which is producing dairy products. Recession is generally slowdown in economic activity over a period of time. The company controls around 30 per cent of the world’s dairy exports. It is co-operative owned by over 10,500 farmers. Fonterra was established in October 2001.
Firstly, one of the biggest impacts of recession for Fonterra in terms of global market is decrease in import for dairy products. It means that free trade between countries decrease in quantity, what’s cores change in economic stability level for the country. This factor affects the unemployment rate in country. It became higher because company cannot afford to contain the full employment rate. It means that Free Trade which is highly important for countries such as New Zealand can decrease economy down. New Zealand will have less income of trading dairy products to other countries like United States of America which is one of the most profitable industries in New Zealand.    
Secondly, the World Milk price was decrease dramatically. (FlEXNEWS., 2009) New Zealand government wiped $2 billion off the economy in 2008. For New Zealand’s farmers prices reduced from $6.60 a kg of milk solids to $6. In 2009 this prices was $5.10 of milk solids.(TVNZ., 2009) In 2010 price is still decreasing to $4.55 a kg of milk solids. This situation is bad for local New Zealand farmers because they get less income. However, is good for Fonterra because company pay less money to farmers and get higher price for overseas customers. New Zealand produces 13 per cent of dairy product for US dairy industry.(NZPA., 2010) This means that US has a big impact for New Zealand economy, if they decide to cut this percentage because of recession New Zealand can get stuck with Globalization in county. If the Economy won’t growth, county won’t get full benefits from trade....