increase font size
Richard McIntyre says that while the price drop across the board wasn’t something farmers wished to wake up to, it was just one auction.
Federated Farmers dairy chair Richard McIntyre believes farmers won't be too concerned with last week's Global Dairy Trade (GDT) price drop.
He points out that while the price drop across the board wasn't something farmers wished to wake up to, it was just one auction.
"We know the GDT auction has ebbs and flows throughout the year and a lot depends on demand and supply throughout the world," he told Dairy News.
McIntyre says milk processors factor these things in when forecasting milk price to their suppliers.
"This is just one auction. Farmers will be watching closely the next few auctions."
Last week's auction saw big falls in 'fats' prices: AMF prices dropped 10.7% and butter 10.2%. Whole milk powder prices dropped 4.3% to US$3,218/tonne. Overall prices still sit above long-term averages (3.6% over the 10-year average) although the key WMP price is now just below the 10-year average and almost 6% below its 5-year average.
Westpac chief economist Kelly Eckhold says futures markets had suggested a significant move down in prices was likely following the fall in prices at the GDT "Pulse" auction.
"There is a growing view that the significant run up in 'fats' prices - especially anhydrous milk fat - may have run their course and that the current higher price levels are encountering buyer resistance."
Southeast Asian buyers took up a higher proportion of product and Middle Eastern buyers stepped back.
Demand from China/North Asia appeared relatively stable in last week's auction.
Eckhold says such a large fall in prices naturally increases uncertainty on future auction developments.
"The fall in prices balances up our previous upside risks on our 2025 milk price forecast of $8.40. Futures market prices still look consistent with that kind of outcome."
Fonterra has a forecast midpoint of $8/kgMS.
McIntyre says an $8 milk price "is only break-even" for most farmers.
"For the average farmers, there's not huge amount of headroom with a $8 payout. If it drops, then that will make things quite uncomfortable for a lot of them," he says.
McIntyre says that while on-farm inflation is easing, interest rates remain high.
OPINION: Recent media commentary from Southland Federated Farmers has raised concerns among our rural communities, particularly around Environment Southland’s approach to winter grazing inspections and nitrogen reporting. But let’s be clear, much of what’s been said simply doesn’t reflect reality.
OPINION: Environment Canterbury's (ECan) decision recently to declare a so-called “nitrate emergency” is laughable.
A shameless political stunt is how Federated Farmers is describing the Canterbury Regional Council decision to declare “a nitrate emergency” on the back of its latest annual groundwater quality survey.
Federated Farmers say Environment Canterbury's decision to declare a 'nitrate emergency' is a shameless political stunt that won't help anyone.
Farmers want the Government to scrap controversial freshwater rules that "put river spirits and ideology ahead of practical water use", says Federated Farmers board member Mark Hooper.
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
New Zealand’s trade with the European Union has jumped $2 billion since a free trade deal entered into force in May last year.
The climate of uncertainty and market fragmentation that currently characterises the global economy suggests that many of the European agricultural machinery manufacturers will be looking for new markets.
Dignitaries from all walks of life – the governor general, politicians past and present, Maoridom- including the Maori Queen, church leaders, the primary sector and family and friends packed Our Lady of Kapiti’s Catholic church in Paraparaumu on Thursday October 23 to pay tribute to former prime Minister, Jim Bolger who died last week.
Agriculture and Forestry Minister, Todd McClay is encouraging farmers, growers, and foresters not to take unnecessary risks, asking that they heed weather warnings today.
With nearly two million underutilised dairy calves born annually and the beef price outlook strong, New Zealand’s opportunity to build a scalable dairy-beef system is now.
OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.
OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.
