Dairy prices have been trending lower for the past 18 months, and the declines have gathered pace in recent weeks.  This will impact the broader economy, flowing through to reduced spending on goods and services, lower activity, and a reduced tax take. It could also put some downward pressure on the currency, given the historic relationship between global dairy prices and the NZ dollar.  For investors, this is a timely reminder of the need to hedge our bets with a healthy exposure to international assets. This provides an insurance policy against any challenges we might face, and any currency weakness that might follow as a result.