Tuesday, 24 March 2020 10:13

$7-plus still on the cards

Written by  Staff Reporters
Westpac markets strategist Imre Speizer. Westpac markets strategist Imre Speizer.

Despite four consecutive drops in Global Dairy Trade (GDT) prices, analysts are sticking with a payout of around $7.20/kgMS for this season.

Westpac markets strategist Imre Speizer says the futures market for 2019-20 farmgate milk price remains stuck at $7.20/kg, where it has been since early February.

Speizer notes that this unsurprising given 80% of the season’s production volumes, as well as most sales, are known.

“That is in line with our own forecast for this season of $7.20,” he says.

Rabobank analyst Emma Higgins anticipates a milk price $7.35/kgMS, a decline of 35c.

Last week Fonterra reaffirmed its milk price range of $7 to $7.60/kgMS.

For the 2020/21 milk price, futures are predicting a price of $6.20/kgMS, from a pre-virus peak of $7.30 in January.

Both Westpac and Rabobank are reviewing their 2020-21 forecast prices and will report in the coming weeks.

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