Rabobank; dairy prices expected to remain firm

In Rabobank's "NZ Agriculture in Focus" January edition their summary statement is that:

"Globally dairy fundamentals remain solid despite economic and financial turmoil, which is likely to provide firm, but not spectacular, prices and profitability through 2012".

They predict that dairy product demand will continue to be firm through the year, but at prices lower than existed 12 months ago.  End use consumption is likely to continue to grow and inventory levels are likely to remain at low levels.  Developing economies are likely to be "vigorous" in their purchase of dairy products (if somewhat sporadic).

At MyFarm we expect a lower milk price forecast for the start of the 2012/13 season, with the potential that the price firms as we go into 2013.  It is possible that we will end up with a similar price to the current $6.50/kgMS.