NZ: GlobalDairyTrade auction for 2017 saw a 3.9% decline in overall dairy price index - Westpac

"Overnight the final GlobalDairyTrade auction for 2017 saw a 3.9% decline in the overall dairy price index," Westpac analysts noted in a recent report.

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Whole milk powder prices fell 2.5% in stark contrast with dairy futures pricing, which suggested an increase of over 5% on the back of a softer outlook for this season’s forecast milk collections.

We have noted that over the past few months, demand has been showing signs of easing, despite concerns of lower production coming out of New Zealand.

Putting this together, we maintain our farmgate milk price forecast of $6.20/KgMs compared to Fonterra’s farmgate milk price forecast of $6.40/KgMs for the 2017/18 season.