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Time is not on my side

Key highlights

Dairy prices posted a third successive fall overnight.
As dairy markets continue to downplay NZ production falls.
Factoring in the recent falls, we revise down our 2015/16 milk price forecast.
 

Report prepared by:

Nathan Penny, ASB Rural Economist
Phone: +64 9 448 8778
Email: nathan.penny@asb.co.nz


Summary

Our view remains that dairy prices will move higher over 2016.  With NZ production falling hard, a large hole is developing in global dairy exports, particularly for whole milk powder.

At this juncture however, dairy markets and buyers are not too fussed.  They are well-stocked and are looking to relatively strong production from other producers to fill the hole.  This mismatch may well continue for a period.  But we see that eventually supply fundamentals will reassert over this weak market sentiment. 

But time is not on this season’s milk price side.  Factoring in the last three auction falls, we have revised our milk price forecast down by 40 cents to $4.60/kg.

 

Read the full PDF Report



Important Disclaimer - The views expressed herein are those of the authors and are based on information believed but not warranted to be correct. Any views or information, whilst given in good faith, are not necessarily the views of ASB Bank Limited and are given with an express disclaimer of responsibility and no right of action shall arise against any of the authors, ASB Bank Limited or its employees either directly or indirectly out of any views, advice or information.
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