The overall response was restrained – the slight rise in the GDT index did not generate any outpouring of relief, but nor was it wholeheartedly dismissed as too little to be of any significance. The absence of substantive enthusiastic analyst reaction – either positive or negative – meant the mainstream media coverage was less prominent than it has been over recent auctions.
The issue most consistently discussed by analysts in the NZ media was the fall in NZ milk production, with slightly less attention paid to the EU region experiencing production growth. Fewer mentions were made of the quantity of product on offer as a contributor to the GDT result.
“… All this points to a substantial price recovery midway through next year” (Kevin Bellamy, Rabobank).
Only Boniface was specifically doubtful:
“The rise was broadly in line with expectations and supported the bank’s own forecast payout price of $4.50. But we’re sceptical about how long that lift might be maintained”
Possibly the key finding in last week’s coverage was the skew towards supply factors in analyst assessments. Some allusions to stocks slowly falling were made, but they may take on more significance after the next auction, should there be another lift in prices.
