16 July 2015
ANZ Bank has revised down its Fonterra farmgate milk price to $3.75 to $4.00 a kg of milk solids from its previous forecast of $4.50 a kg after sharp decline in dairy prices at this morning's GlobalDairyTrade (GDT) auction.
The bank's rural economist Con Willais said the volumes on sale are set to rise over coming months as New Zealand supply comes on stream, but demand, particularly from China, was "conspicuously absent".
"ANZ was already bottom of the market with our forecast of a $4.50 milk price; we now expect $3.75-$4.00/kg MS, but it is a guessing game where the bottom might be," Williams said.
"Even more pressure now comes on Fonterra's response, including its restructuring plan and dividend performance," he said.
Read more:
• NZ dollar falls on weak dairy auction