$10 milk price still in sight despite global dairy markets softening
A $10 milk price remains on the cards for this season despite recent softening of global dairy prices.
Demand for New Zealand dairy products should remain solid despite China’s mixed economic outlook, says Imre Speizer, Westpac.
He says China’s dominance as an export destination, particularly for whole milk powder, has been evident in official monthly trade data for some time.
Stats NZ figures for August confirm the trend of rising dairy export volumes since 2016, with China now importing about as much as it did at the previous peak in 2013.
Speizer says while the outlook for China’s economy is mixed, consumers are still buying dairy products.
“The outlook for China’s economy is mixed: over the remainder of 2019 we expect the pace of activity to slow further, but over the long term its various stimulatory initiatives should prove supportive.
“Against this backdrop, consumer activity has held up well, China so far successfully engineering a rebalancing of the economy towards domestic consumption.”
Last week’s Global Dairy Trade (GDT) auction also reflected increase demand from China.
The GDT auction resulted in little change to prices overall: the price index rose 0.2%. The key export product, whole milk powder, fell 0.2%.
But Speizer notes that the multi-month trend in whole milk powder prices remains positive, with a total gain of 5.8% since bottoming in July.
Prices overall have been fairly stable since June, the headline index now sitting at the three-year average. Whole milk powder at $3141 is slightly above the three-year average of $3060.
Westpac is maintaining its payout forecast at $6.50/kgMS. Fonterra’s payout price range remains unchanged at $6.25-$7.25/kgMS.
Futures markets for the milk payout are now pricing $6.85, up from $6.75 last month ago but about the middle of the $6.65-$6.95 range prevailing since June.
New Zealand First leader and Foreign Minister Winston Peters is ratcheting up pressure on Fonterra farmers as they vote on divesting the co-operative’s consumer and related businesses.
Alliance Group's Pure South Handpicked 55 Day Aged Beef has been recognised on the world stage, securing top honours at the World Steak Challenge in the Netherlands.
Meat co-operative, Alliance has met with a group of farmer shareholders, who oppose the sale of a controlling stake in the co-op to Irish company Dawn Meats.
Rollovers of quad bikes or ATVs towing calf milk trailers have typically prompted a Safety Alert from Safer Farms, the industry-led organisation dedicated to fostering a safer farming culture across New Zealand.
The Government has announced it has invested $8 million in lower methane dairy genetics research.
A group of Kiwi farmers are urging Alliance farmer-shareholders to vote against a deal that would see the red meat co-operative sell approximately $270 million in shares to Ireland's Dawn Meats.
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