New Zealand Dairy Sector to Emerge out of the Woods

Based on current market fundamentals, Rabobank believes that New Zealand dairy farmers will finally emerge out of the woods in the 2017/18 season. Desirable trading conditions, combined with a forecast farmgate milk price of NZD 6.25/kgMS, bring the prospect of a consecutive season of profitability (and, with it, confidence).

picture of NZ dairy cows

Report summary

•    Farmgate milk prices are forecast to reach NZD 6.25/kgMS for the 2017/18 season. 

•    Relatively low on-farm input costs are set to continue for the upcoming season. 

•    Farmer margins will be positive—provided cost control remains front of mind. 

•    Farmers need to be mindful of global risks to the outlook and subsequent price volatility.