Milk powder price set to stay high says economist

Dairy farmers' spirits have lifted after economist Emma Higgins told them international global auction prices are likely to stay up. By JILL GALLOWAY.
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The Rabobank dairy analyst from Christchurch talked to about 200 people at a Palmerston North dinner.
Higgins said she expected commodity prices to stay high, because there was stronger demand and less milk supply.
She said the farmers’ payout to farmers was likely to go up, perhaps into the low $6s or the high $5s for a kilogram of milksolids
Higgins said farmers had seen global auction commodities rise and fall again.
«But this time round, we think it will stay. Milk output in Europe has gone down because of the low prices and weather. European farmers felt the same pinch as you did here, but were not able to curb input costs the same way as New Zealand farmers.»
She said there was some environment regulations which could hit Dutch dairy farmers and Australian milk production was back 10 per cent
«All those things suggest prices for WMP [whole milk powder] will stay above US$3000.»
Higgins said Rabobank watched the dairy market with interest because it had 22 billion euros invested in primary industry worldwide.
She said there was strong demand in the United States for cheese and butter, which the US was meeting.
«But we see a steady demand for dairy and we see it in markets such as South East Asia, Brazil, Mexico and China.»
Higgins said the milk price was low in China as small farms disappeared after larger farms bought them and cut costs.
«The demand in China is fragile. However dairy looks sustainable and looking out to 2020 there will be strong growth,» Higgins said.
«The good news is expect commodity prices to rise, but, and there is always a but there will be volatility.»
She said dairy stocks were high particularly for skim milk powder in Europe which equated to 30 per cent of New Zealand’s production.
Feilding investment company MyFarm, which has 35 dairy farms, says there are encouraging signs in the dairy commodities market and the farm gate milk price could rise to as much as $6.36/kg.
The company’s calculations were for this year’s milk price was more likely to go closer to $6.19/k
«However our experience does tell us that can change a lot,»‘ says MyFarm in its newsletter.
Benchmarking from its syndicate farms for Canterbury and Southland, showed the average cost structure is below $4kg/ms, before payment to investors.
MyFarm was changing 11 farms to organics with most of the dairy farms changing in the South Island.
 
Source: Stuff
Link: http://www.stuff.co.nz/business/farming/86311436/milk-powder-price-set-to-stay-high-says-economist
 

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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