Milk Glut Drags Fonterra Forecast Down to $9.20/kgMS
A milk glut around the world shows no sign of easing, putting downward pressure on farmgate milk prices for the next few months.
The whole milk powder index lead the way, up 7.5%, to an average price US$2,156/MT.
Other results were: AMF index up 1.6%, average price US$3,240/MT; Butter index up 2.0%, average price US$2,746/MT; BMP index up 2.4%, average price US$1,460/MT; Ched index down 3.9%, average price US$2,636/MT; LAC index up 8.0%, average price US$708/MT; RenCas index up 7.5%, average price US$4,742/MT; SMP index up 0.3%, average price US$1,727/MT
ASB's rural economist Nathan Penny says the bank maintains it 2015/16 and 2016/17 milk price forecasts at $3.90/kg and $6/kg, respectively.
"We expect dairy prices to gradually trend up over the coming season as NZ (and later European) production responds to the current low prices and as Chinese import demand recovers," he says.
