Westpac Elevates Farmgate Milk Forecast Amid Global Price Resilience

Westpac Adjusts Forecast Upwards

Westpac has revised its farmgate milk price forecast for the current season from $10.00 to $10.30. The adjustment highlights the resilience of global dairy market prices and a concurrent decline in the New Zealand dollar’s value.

Economic Insights

Senior economist Michael Gordon explained that global dairy prices have maintained stability, contrary to earlier expectations of a gradual price decline. This stability is supported by recent solid performances in GlobalDairyTrade auctions.

Fonterra's Projections

In December, Fonterra raised its midpoint forecast for the 2024-25 season by 50 cents, predicting a range of $9.50 to $10.50. Westpac has also released its preliminary estimate for the next season's final milk price at $10, though specific forecasts from Fonterra will be sought closer to May.

Market Dynamics

A notable demand for whole milk powder, predominantly exported by New Zealand, has pushed WMP prices to their highest since April 2022. Despite potential geopolitical risks, Rabobank's agri-business outlook suggests balanced global dairy fundamentals, forecasting a promising year for New Zealand’s dairy farmers.