During most of 2015, US milk prices remained considerably higher than prices in the EU or New Zealand, but quoted prices for the first half of 2016 takes US milk prices of $13.50 to $14 (27.80c to 28.7c/litre) much nearer to EU levels. New Zealand milk price remains much lower at NZ$4.60/kg (20c/litre).
After Thanksgiving and Christmas, there is no driver of domestic consumption in the US, which will lead more dairy product to be sold on international markets.
Even though milk production in the US is not rising as fast as it was earlier in the year, there was still an increase of 0.53% in November.
Although grass growth is very weak in New Zealand, there is no sign that EL Nino will cause the level of drought that would drive markets in the short term.
With milk production in the EU increasing last year by more than the 1.1% predicted earlier, coupled with the problems in the Chinese economy and the Russian ban remaining in place, it is going to take much longer before we see an increase in milk prices.
Source: FarmersJournal
