$7-plus still on the cards

Westpac markets strategist Imre Speizer says the futures market for 2019-20 farmgate milk price remains stuck at $7.20/kg, where it has been since early February.

Speizer notes that this unsurprising given 80% of the season’s production volumes, as well as most sales, are known.

“That is in line with our own forecast for this season of $7.20,” he says.

Rabobank analyst Emma Higgins anticipates a milk price $7.35/kgMS, a decline of 35c.

Last week Fonterra reaffirmed its milk price range of $7 to $7.60/kgMS.

For the 2020/21 milk price, futures are predicting a price of $6.20/kgMS, from a pre-virus peak of $7.30 in January.

Both Westpac and Rabobank are reviewing their 2020-21 forecast prices and will report in the coming weeks.