20 March 2017

Dairy Prices Should Remain the Same Next Year Says Economist

News

Next year's dairy payout should stay around $6 per kilogram of milksolids, ASB's chief economist told farmers at the Central Districts Field Days.

Nathan Penny, addressing 30 people  at a seminar, said food prices generally were increasing and international demand for all food including dairy products was already occurring.  He said the milk payout was part of that.

"But yes the economy is more resilient.  Dairy struggled for several years.  But what surprised us was the rest of farming, horticulture, beef and forestry filled the gap.  What we saw in 2015 was that exports still grew even though dairy was down."

Penny said the milk price internationally had lifted structurally and as a result he expected next year's payout to be solid. But he said production and pricing would be dependent on the weather.

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