fbpx
Print this page
Monday, 12 July 2021 07:55

$8 still on the cards

Written by  Sudesh Kissun
Despite a sixth consecutive drop in the GDT price index, analysts say an $8/kgMS payout is still on the cards. Despite a sixth consecutive drop in the GDT price index, analysts say an $8/kgMS payout is still on the cards.

Dairy prices continue to fall, but an $8/kgMS forecast milk price this season is still on the cards, say analysts.

Last week’s Global Dairy Trade (GDT) saw the sixth consecutive drop in the price index. But it’s the fourth consecutive drop in whole milk powder (WMP) price that will concern farmers.

ASB economist Nat Keall points out that WMP prices are holding onto most of their gains from earlier in the year and are still up about 20% on the same period last year

“We expect prices to drift lower over the remainder of the season, but the pace and size of the easing is a big question,” says Keall.

With global demand and supply still finely balance, he thinks a sharp price correction is unlikely.

Keall says while there are some downside risks to ASB’s forecast of $8.20/kgMS, prices remain very high.

“We still see the makings of a strong season despite the latest GDT result.

“Anecdotally, there are signs too that Fonterra is selling product off auction at healthy prices.”

 A weaker than expected New Zealand dollar may add some support to the farmgate milk price, says Keall.

The consecutive drop in dairy prices suggests prices are losing momentum.

Aggressive Chinese purchases fuelled the boom in dairy prices this year, as the country build ups its strategic stockpile in response to booming domestic consumption.

Keall says tighter global supply and widespread freight disruption have added fuel to the fire.

“But there are now signs Chinese inventory is getting closer to healthy levels, and global production (both in NZ and in the Northern Hemisphere) has lifted in response to the price signals,” he says.

More like this

$8 still on the cards

Farmgate milk price forecasts continue to fluctuate despite a rise in the last Global Dairy Trade (GDT) auction.

Prices rebound!

Dairy prices have ended a six month poor run, giving stronger hope to an $8 farmgate milk price this season.

National

Ice broken on an old problem

Three enterprising Mackenzie College (Fairlie) students may well have come up with the perfect solution to an age-old problem of…

Cruel April Fool's joke!

In an ironic twist, the Government has pushed back the date of its so-called 'ute tax' or feebate scheme to…

Machinery & Products

Keeping everyone safe

As tractors get larger and front linkage kits become more common, many have started fitting underrun or collision protection systems.

Keeping stock and drivers safe

Livestock haulers are a crucial link in the New Zealand agriculture supply chain, transporting stock onto or between farms, to…

Making lamb marking easy

Designed by a sheep and beef farmer, Vetmarkers are made in New Zealand and sold around the world.