Price dive ahead for 2018/19

Price dive ahead for 2018/19: spencer

Next season could see milk prices ‘significantly worsen’, according to dairy analyst Steve Spencer.  In the latest Global dairy directions report, he warns of 2018/19 average commodity milk values  ranging from  $4.30 to $4.50/kgms. The EU SMP glut, along with extra milk from the EU and US, will drive the price down, offset by lower production in Australia and weather-cramped NZ milk outputs. “You’d have to have been living under a large rock to be unaware of the risks that lie ahead for global dairy markets, and therefore Southern Australia’s milk prices,” he said.  EU milk production will top last year’s output by about 3-4% during the spring flush, seeing the EU Commission “keen to hold a clearance sale of SMP … at whatever price.” The flow-on for butterfat will see higher EU cheese production “at a time when the US is producing much more cheese than its consumers are demanding … Hence, cheese is the major risk for NZ and Australian milk values,” he said, adding. “Failure of the EU spring would be a gift, but weather outlooks show no red flags.”