{"id":60078,"date":"2023-03-23T11:00:00","date_gmt":"2023-03-22T22:00:00","guid":{"rendered":"https:\/\/www.farmersweekly.co.nz\/?p=60078"},"modified":"2023-03-23T10:11:51","modified_gmt":"2023-03-22T21:11:51","slug":"dairy-season-limps-to-a-good-conclusion","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/markets\/dairy-season-limps-to-a-good-conclusion\/","title":{"rendered":"Dairy season limps to a good conclusion"},"content":{"rendered":"Reading Time: <\/span> 2<\/span> minutes<\/span><\/span>\n

Global dairy prices are dragging their feet and forecasts of the New Zealand milk price have been revised downwards as the season draws to a close.<\/p>\n\n\n\n

Westpac senior agri economist Nathan Penny said the expected pick-up in Chinese demand is taking longer than anticipated and he has trimmed his milk price forecast by 35c to $8.40\/kg.<\/p>\n\n\n\n

\u201cWith the end of the season drawing near, we have effectively run out of time for our previous forecast to hold,\u201d he said.<\/p>\n\n\n\n

Previously, ASB had lowered its forecast by 15c to $8.50, the midpoint of Fonterra\u2019s own forecast range of $8.20 to $8.80.<\/p>\n\n\n\n

ANZ reduced its forecast by 25c to $8.50.<\/p>\n\n\n\n

However, while these forecasts have been reduced, the $8.50 consensus, if it is confirmed, will be the second-best farmgate milk price outcome.<\/p>\n\n\n\n

The latest Global Dairy Trade (GDT) results were not encouraging for milk powder of milkfat products, and cheddar prices suffered their second consecutive 10% fall.<\/p>\n\n\n\n

Cheddar has now lost 40% in value during the past year and that may signal a sharp ending to Fonterra\u2019s non-reference protein products windfall of the current financial year.<\/p>\n\n\n\n

But the main performer for Fonterra, casein, is not traded on the GDT platform.<\/p>\n\n\n\n

For the second March auction, the GDT price index fell 2.6%, including anhydrous milk fat and butter down 3.8% and 3% respectively, skim milk powder down 3.5% and whole milk powder down 1.5%.<\/p>\n\n\n\n

Jarden\u2019s head of derivatives, Mike McIntyre, said the medium-term milk price outlook is around $8.50 and milk price futures contracts for next season and the following season are trading at that level.<\/p>\n\n\n\n

The GDT index has fallen 38% over the past 12 months, which analysts say is due to China\u2019s reduced presence in the auctions because of covid lockdowns.<\/p>\n\n\n\n

China\u2019s share of NZ dairy exports dropped from 43% in late 2021 to around 30% currently.<\/p>\n\n\n\n

\u201cBut we maintain that it is a matter of when, not if, lifting Chinese demand translates into higher dairy prices,\u201d Penny said.<\/p>\n","protected":false},"excerpt":{"rendered":"Flurry of downward revisions as Chinese interest takes a while to revive.\n","protected":false},"author":22,"featured_media":6413,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[2],"tags":[55,95,97],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t