After last night's GlobalDairyTrade price boost (prices rising faster than a Sydney house auction), comments from Westpac:
In light of the rebound in dairy prices to date, we have revised our forecast of the farmgate milk price for this season from $4.30/kg to $5.30/kg
The assumptions that underpin this forecast are:
(1) a further modest bounce in the next couple of GDT auctions, given that momentum is clearly on their side,
(2) an El Nino-induced drought of moderate severity, and
(3) a pullback in prices early next year, once the drought threat has passed its peak.
With global milk production still ample and demand subdued, we remain sceptical about a sustained rebound in dairy prices. Our milk price forecast of $5.20/kg for next season remains unchanged.
H/t to Livesquawk (members area, but there is a free trial available)
