Global outlook is bright
Posted on: 09/06/21
Despite a run of four small GDT average price index declines (which some describe as insignificant) Fonterra and others remain very positive as to the next 12 months New Zealand farmgate milk price outlook.
The Co-op has declared an opening 2021/22 farmgate milk price forecast range of $7.25 to $8.75kg milk solids which is equivalent to 28ppl to 33.74ppl.
The mid point of $8 (30.84ppl) is considered by several analysts and farm bankers to be realistic based on global demand for dairy products driven by exeptional demand from China.
With the increase in farmgate milk price comes an expectation that New Zealand farmers will churn out and extra 2% of extra milk this season which analysts have factured into the 31ppl mid point price prediction.
The March 2021 surge in GDT prices set the pace with WMP trading at US$ 4350 tonne and at last weeks GDT pegged back to US $4062 tonne. The $4,000 tonne price is considered to be crucial to achieving the farmgate milk price of $8.
Meanwhile for the milk year just ended Fonterra average farmgate milk price payout forecast has narrowed to $7.45 to $7.65/kg milk solids (28.72ppl to 29.5ppl). There will be a number of GB producers who can’t believe New Zealand farmers have enjoyed such a healthy payout.