Federated Farmers Welcomes ACT’s New Farming Policies
Federated Farmers has welcomed new rural policies released by ACT, saying they align closely with its own election priorities.
In another sign of confidence, the NZX milk price futures are over $10.30/kgMS for 2026-27.
BNZ has lifted its forecast milk price for the season to $10/kgMS. Fonterra has a forecast midpoint of $9.50, sitting in a range of $8.50 to $10.50/kgMS.
ANZ is still forecasting a milk price of $9.80/kgMS but agricultural economist, Matt Dilly says a $10 milk price is “very possible”.
“Since our forecast was published a month ago, the NZD continues to weaken and skim milk powder prices have been pushing even higher,” Dilly told Dairy News.
“So, a payout over $10 is very possible based on where prices are tracking at the moment.”
But for dairy farmers, a $10 milk price may not mean greater profit as looming dry weather will not only affect milk production but force them to buy more supplementary feed to keep milking cows.
Waikato Federated Farmers dairy section chair Matthew Zonderop says while a $10 milk price may look good on paper, it may not mean more money in the pockets of farmers.
He told Dairy News that parts of Waikato have received only 77mm of rain this month, compared to 184mm last year.
“So, something is brewing and if the drought kicks in we will have to buy more feed, either PKE or bales.”
Zonderop is urging farmers to manage their budgets well and be prepared for whatever the weather gods deliver.
But he says milk production in Waikato is tracking well so far. October is the peak month for milk production in the country.
Dilly notes that El Niño will likely start to impact milk production as the season progresses, but probably not until early 2027.
“We are off to a very good start: updated milk production stats came out, showing milksolid collections were up 1.9% year over year in September and are up 3.0% season to date.
“We are in the peak production month here in October, and the positive momentum to start the season should continue at least through November/December.
“By the time El Niño starts to bite, a lot of the season will have already been produced and sold. That limits the possibility for drought to push milk prices even higher,” says Dilly.
Another factor helping push prices up is the weaker NZ dollar.
BNZ senior economist Doug Steel notes that the NZD/USD has fallen around 5%.
At the same time, milk powder prices are booming on Global Dairy Trade auctions, with skim milk powder (SMP) up over 20%.
“These are significant movements in a short space of time,” says Steel.
“Milk powder prices and currency movements have a much bigger influence on farmgate milk price in NZ than milkfat prices.”
SMP is nearly touching US$4000/metric tonne, about US$200 higher than whole milk powder.
Dilly says SMP can continue its run for as long as oil prices remain elevated.
“It’s hard to forecast where oil prices might go, given that they’re tied more than ever to unpredictable geopolitical events.
“But on the other side of the ledger, butter and AMF prices continue to drift lower. This is driven by strong milk production globally, especially in Europe and the US. Until milk production slows down in those countries, milk fats should remain under pressure.”
