Dairy price news from Westpac

(Note: Last night we had the GDT auction result: New Zealand Fonterra GDT auction price index -1.4% vs -1.6% prior)

More from WPAC:

  • Assumes whole milk powder (WMP) prices over the 2015/16 season average around $2200 USD/tonne this season and an average conversion rate for the season of about 0.69c
  • Close to where WMP prices are sitting (WMP prices averaged $2188 in last night'€™s GlobalDairyTrade auction)
  • Risks on both sides of this forecast
  • European milk production continues to grow strongly
  • Should concerns about global growth and financial market volatility intensify further, we could see prices fall
  • Prices are already at very low levels and globally food prices have held up relatively well in the current round of financial market turmoil
  • Strong growth in global milk supply combined with subdued demand from China, is likely to keep a lid on prices for much of this year
  • We are forecasting a farm gate milk price of just $5.20 next season