increase font size
RABOBANK is predicting global dairy price will recover in six months.
In its Dairy Quarterly Q2: Beyond the tipping point, the bank says prices fell as a result of improved milk production in export regions and the easing of forward purchasing by China.
These mechanisms freed more product for other buyers and lowered the need to ration demand with international dairy commodity prices falling 10% to 20% in the three months to mid-June.
"The pull back in Chinese purchasing has been particularly significant, with evidence that the Chinese industry has accumulated excess inventories after a period of vigorous buying, improved local milk production and weaker local sales. Current prices in the international market have dropped below what we see as sustainable in the medium term," explains Rabobank analyst Tim Hunt.
Milk production growth will slow considerably in the second half of 2014 as lower prices are passed to producers, weather normalises and comparables become tougher to exceed. Consumption in export regions will also slowly improve on the back of higher incomes, employment growth and falling retail prices.
"Together these forces should gradually tighten up the market as we progress through 2014," says Hunt.
"However, we expect little improvement in prices until late in 2014 or early 2015, as China works through its accumulated stocks and the world continues to consume the stronger than expected wave of milk produced in the first half of year."
The report notes that one upside risk to keep an eye on is a developing El Nino event. This has the potential to generate unusually dry conditions in South East Australia and excessive rainfall in Argentina – and hence reduced milk production in both of these export regions.
OPINION: You would've missed this one if you rely on mainstream media for your news, but your old mate reckons credit should go where credit's due: Emissions by dairy cattle decreased by 1.6% according to the latest NZ Greenhouse Gas Inventory report.
Only this season’s $10/kgMS bumper payout has saved some dairy farms along the Taranaki coast from absolute disaster due to the present drought – dubbed as one of the worst ever for some.
New Zealand’s top cheeses for 2025 have been announced and family-owned, Oamaru-based Whitestone Cheese is the big winner.
New Zealand’s special agricultural trade envoy Hamish Marr believes the outlook for the dairy sector remains strong.
OPINION: The appendage swinging contest between the US and China continues, with China hitting back with a new rate of 125% on the US, up from the 84% announced earlier.
While opening the first electrode boiler at its Edendale site, Fonterra has announced a $70 million investment in two further new electrode boilers.
Fonterra says its ongoing legal battle with Australian processor Bega Cheese won’t change its divestment plans.
With an amendment to the Medicines Act proposing human medicines could be approved in 30 days if the product has approval from two recognised overseas jurisdictions, there’s a call for a similar approach where possible to be applied to some animal medicines.
The Government wants to make sure that rural communities get a level of service that people who live in cities often complacently expect.
As the New Zealand Government launches negotiations on a Free Trade Agreement with India, one Canterbury-based vegetable seed breeder is already benefiting from exporting to the world's fifth-largest economy.
Onenui Station on Mahia Peninsula in northern Hawke's Bay is a world first in more ways than one.
