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
