increase font size
ASB economist Nathaniel Keall.
An $8/kgMS farmgate milk price for this season may be out of reach, according to ASB economist Nathaniel Keall.
With just over two months left in the 2023-24 season and bulk of the season’s products prices, Keall expects little change to Fonterra’s mid-point of $7.80/kgMS. Releasing its half-year results yesterday, Fonterra narrowed its price range to $7.50-$8.10/kgMS but the mid-point remains unchanged.
Keall says Fonterra’s tweak reflects that we are increasingly close to the end of the season, and both upside and downside risks have dissipated.
“Mechanically, the bulk of the season’s product has been priced and the co-op has little further hedging to do.”
ASB’s forecast for the season has been sitting at around $8/kgMS since the beginning of the year, when Fonterra’s midpoint was $7.50/kgMS.
But Keall accepts that it looks like prices might not quite manage to hit that point, having run into resistance at the past couple of dairy auctions. That includes this week, where the overall Global Dairy Trade (GDT) index eased 2.8% and whole milk powder fell 4.2%.
Keall isn’t surprised to see WMP prices pare back some of their recent gains.
“We’ve long noted Chinese demand remains fairly muted and that we probably couldn’t expect South East Asian & Middle Eastern buyers to offset that forever. But we had thought prices might sustain these levels for long enough for the seasons price to hit the $8/kgMS.”
Keall says attention is now largely focused on the price dairy farmers can expect next season.
ASB is forecasting an opening forecast milk price of $8.30/kgMS. Fonterra is yet to come out with an opening forecast milk price for the next season.
Buoyed by strong forecasts for milk prices and a renewed demand for dairy assets, the South Island rural real estate market has begun the year with positive momentum, according to Colliers.
Fonterra says it takes the ongoing threat of 'adverse cyber action' extremely seriously.
Despite the turmoil in global markets, Fonterra is continuing with a dual track process to divest its multi-billion dollars consumer businesses.
A global trade war beckons, which is bad news for a small open economy like New Zealand, warns Mark Smith ASB senior economist.
Fonterra says the US continues to be an important market for New Zealand dairy and the co-op.
Among the regular exhibitors at last month’s South Island Agricultural Field Days, the one that arguably takes the most intensive preparation every time is the PGG Wrightson Seeds site.
Two high producing Canterbury dairy farmers are moving to blended stockfeed supplements fed in-shed for a number of reasons, not the least of which is to boost protein levels, which they can’t achieve through pasture under the region’s nitrogen limit of 190kg/ha.
Buoyed by strong forecasts for milk prices and a renewed demand for dairy assets, the South Island rural real estate market has begun the year with positive momentum, according to Colliers.
The six young cattle breeders participating in the inaugural Holstein Friesian NZ young breeder development programme have completed their first event of the year.
New Zealand feed producers are being encouraged to boost staff training to maintain efficiency and product quality.
OPINION: The world is bracing for a trade war between the two biggest economies.
OPINION: In the same way that even a stopped clock is right twice a day, economists sometimes get it right.
OPINION: The proposed RMA reforms took a while to drop but were well signaled after the election.
