Prices initially eased on the NZX Dairy Derivatives market before also playing out in the physical market at the second GlobalDairyTrade event of the month.
At present there is plenty of dairy product available across the globe and buyers are generally well stocked.
However the threat of a sharp fall in milk production out of NZ exists. Weather patterns are playing out as would be expected when El Nino is present.
Cow numbers have been pared back by NZ farmers who are taking drastic measures to ensure their businesses remain financially viable.
All things being equal this would point to much firmer prices.
However this season is a little different as while milk output is dropping like a stone in NZ it continues to be offset by strong growth from Europe – hence the flat outlook on the NZX Dairy Derivatives market.
• This article is published from the AgriHQ monthly dairy report. It provides an in-depth monthly analysis on the key factors influencing the dairy industry, both internationally and within New Zealand. It includes commentary on commodity prices, exchange rate movements, seasonal payout predictions, production data and guest commentary from an individual active in the dairy industry.
