NZ milk prices fall as global price pressure continues

Published 29 January 16

Two of New Zealand’s largest dairy co-operatives have reduced their forecast farmgate milk prices for 2015/16 because they expect global dairy commodity prices to remain under pressure.

Fonterra has cut its price by nearly 10% to NZ$4.15 per kilo of milk solids (kgMS), equivalent to around 14ppl. Meanwhile, Westland’s forecast pay-out has reduced to NZ$4.15-4.45 per kgMS, around 14-15ppl.

The co-ops said, although NZ milk production has slowed in response to weak prices, continued strong EU production is still adding to pressure on global prices. Fonterra suggested that rebalancing of the markets, and therefore price recovery, now depends largely on a slowdown in milk from the EU.