New Zealand Forecast
We have seen the price of whole milk powder NZ come down since May, and prices have entered a confirmed downtrend. Therefore, the risk should overall be to the downside as prices have a seasonal tendency to decline in Summer. However, towards the end of summer, we may see prices make a short upward correction before continuing the decline. Furthermore, futures contracts are in backwardation, indicating an expectation of lower prices in the months to come. This adds to the expected downward pressure.
One thing we are keeping an eye out for is China. We have seen China increase its production of milk powders over the last couple of years to reduce its reliance on imports, such as whole milk powder. However, Chinese consumers remain hesitant to buy locally produced milk powders due to previous incidents. Therefore, we still see a significant demand from other parts of the world. Furthermore, with the current tariffs between the US and China, China may focus on other markets to meet its need for milk powders. Thus, we could see an increased export from New Zealand to China, which in turn could put upward pressure on prices. We also hear that Australia is experiencing both droughts and floods in different parts of the country, which could also affect prices for New Zealand dairy products.
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