The internal market is small and there are no government policies to buffer or stabilise domestic prices. Farm prices in New Zealand are therefore largely determined by world market prices and fluctuations in shipping costs (basis), and the volatility of domestic prices derives from two principal sources: fluctuations in international commodity prices and variability in the value of the New Zealand dollar. Share of exported output of key Figure 3. One can see that payouts to dairy farmers are constantly adjusted to follow changes in export prices. Some analysts suggest there is significant co-variation between commodity prices and the exchange rate in New Zealand.