Middle East demand cushions global dairy price drop at latest GDT auction
The upheaval in the Middle East may have eased the fall in global dairy prices last week.
Last week's rise in global dairy prices has further boosted the chance of a record-breaking $9 milk price for the season.
Whole milk powder prices - the benchmark for Fonterra's milk price - to its farmer suppliers - broke the US$4,000/metric tonne barrier for the first time in six months.
Westpac has lifted its 2021-22 farmgate milk price by 10c to $9/kgMS, at the top of Fonterra's updated forecast range of $8.40 to $9.00/kgMS.
Senior agri economist Nathan Penny believes the lower NZ dollar is likely to prove a windfall gain for farmers.
"The key catalyst for the forecast revisions is our lower forecast track for NZD/USD," says Penny. "We now expect NZD/USD to fall to US$0.66 by mid-2022.
"That's a whopping 8 cents lower than our previous expectation of it rising to US$0.74 at the same stage. "Expectations of an earlier increase in interest rates in the US have put the US dollar on the front food, and we expect that it will make further gains against currencies like the NZD over the next six months."
ASB economist Nat Keall says the bank is retaining its forecast milk price of $8.75/kgMS.
He adds that at this point in the season, a record-high farmgate price is practically guaranteed and every auction where WMP prices simply hold onto the gains they've already made supports that prospect.
"On that front, there is little to suggest that prices will be correcting in the near future.
"Most obviously, the WMP contract slope continues to point to prices maintaining momentum from here."
Keall admits that ASB is "a little bit more cautious" than the bullish futures market, which sees WMP prices lifting and remaining north of US$4,000/MT over much of the rest of the season. But WMP prices have had a tendency to overcorrect to swings in demand and supply, he says.
"Still, there is room for a little upside in our lofty forecast."
The challenges of high-performance sport and farming are not as dissimilar as they may first appear.
HortNZ's CEO, Kate Scott says they are starting to see the substantial cumulative effects on their members of the two disastrous flood events in the Nelson Tasman region.
In an ever-changing world, things never stay completely the same. Tropical jungles can turn into concrete ones criss-crossed by motorways, or shining cities collapse into ghost towns.
Labour's agriculture spokesperson Jo Luxton says while New Zealand needs more housing, sacrificing our best farmland to get there is not the answer.
Profitability issues facing arable farmers are the same across the world, says New Zealand's special agricultural trade envoy Hamish Marr.
Over 85% of Fonterra farmer suppliers will be eligible for customer funding up to $1,500 for solutions designed to drive on-farm efficiency gains and reduce emissions intensity.
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