Flurry of downward revisions as Chinese interest takes a while to revive.
Original content
Global dairy prices are dragging their feet and forecasts of the New Zealand milk price have been revised downwards as the season draws to a close. Westpac senior agri economist Nathan Penny said the expected pick-up in Chinese demand is taking longer than anticipated and he has trimmed his milk price forecast by 35c to $8.40/kg. “With the end of the season drawing near, we have effectively run out of time for our previous forecast to hold,” he said. Previously, ASB had lowered its forecast by 15c to $8.50, the midpoint of Fonterra’s own forecast range of $8.20 to $8.80. ANZ reduced its forecast by 25c to $8.50. However, while these forecasts have been reduced, the $8.50 consensus, if it is confirmed, will be the second-best farmgate milk price outcome. The latest Global Dairy Trade (GDT) results were not encouraging for milk powder of milkfat products, and cheddar prices suffered their second consecutive 10% fall. Cheddar has now lost 40% in value during the past year and that ...
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