Friday 22nd June 2018
|Text too small?|
New Zealand milk production may grow to a record of nearly 23 billion litres in the 2018/19 season, bolstered by a favourable milk price and adequate feed reserves, and assuming normal weather conditions, according to Rabobank’s dairy analyst Emma Higgins.
In Rabobank’s latest Dairy Quarterly report, Higgins forecasts the nation’s year-on-year milk production will grow 2 percent for 2018/19, the year that started on June 1. Given Fonterra Cooperative Group’s estimate that its own milk collections will increase 1.5 percent year on year, national milk supply could increase as much as 4 percent, Higgins noted in the report.
“If realised, this would be a record for New Zealand milk production,” said Higgins, adding milk output would be 872,000 tonnes higher than the previous season.
Rabobank expects 2017/18 milk production to match that of 2016/17, resulting in 21.4 million tonnes of milk, according to Higgins.
Meanwhile, a stalling in the pace of milk supply growth across the world's seven main dairy exporting regions in recent months offers reasons for a more bullish market, according to the report.
A New Zealand milk price of $6.80 per kilogram of milk solids is now within reach for 2018/19, Higgins said.
“With milk supply growth out of Europe and the US failing to meet market expectations, global farmgate milk prices have moved off the lows posted at the start of the year and are expected to move seasonally higher through the second half of 2018,” according to Higgins.
To be sure, “a mix of upside and downsized market risks warrant monitoring,” Higgins noted. “In particular, the start of the upcoming New Zealand season and the level of escalation in trade wars are likely to set the stage for the fourth quarter of 2018 and the first half of 2019 dairy markets.”
No comments yet
NZ dollar stalls after Bascand's rate cut comments
Bascand says RBNZ will consider changing bank capital proposals
Affordable electricity key to decarbonisation - Genesis
Graeme Hart trims global packaging empire with US$615m asset sale
Stronger-than-expected inflation won't deter November rate cut - economists
Contact in talks on 13MW dairy boiler project
Restaurant Brands forecasts 10% growth in FY2020
Domestic inflation rises at fastest annual pace in eight years
16th October 2019 Morning Report
NZ dollar falls against British pound on Brexit hopes, CPI in focus