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."
According to the most recent Rabobank Rural Confidence Survey, farmer confidence has inched higher, reaching its second highest reading in the last decade.
From 1 October, new livestock movement restrictions will be introduced in parts of Central Otago dealing with infected possums spreading bovine TB to livestock.
Phoebe Scherer, a technical manager from the Bay of Plenty, has won the 2025 Young Grower of the Year national title.
The Fencing Contractors Association of New Zealand (FCANZ) celebrated the best of the best at the 2025 Fencing Industry Awards, providing the opportunity to honour both rising talent and industry stalwarts.
Award-winning boutique cheese company, Cranky Goat Ltd has gone into voluntary liquidation.
As an independent review of the National Pest Management Plan for TB finds the goal of complete eradication by 2055 is still valide, feedback is being sought on how to finish the job.
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