New Zealand dairy farmers are feeling the effects of the recent fall in the Global Dairy Trade auction according to Onenews in New Zealand, which reports that Kiwi dairy farmers haven’t started the year as they’d hoped.
The surprise tumble in the first Global Dairy Trade auction of the year comes at a time when many farmers in New Zealand are trying to deal with drought conditions.
Dairy farmer Rupert Davison told Onenews that he’s been trying to keep costs/kg of milk solids as low as possible. “But you can only do so much”.
The drop in whole milk powder of 4% overnight at the Global Dairy Trade auction comes as many industry commentators say a perfect storm is happening in terms of supply and demand.
“It comes at a time when we’ve seen softer demand coming out of China and reasonably high supply coming out of the EU,” Geoff Parr an Economist with the New Zealand Institute of Economic Research told Onenews.
The Reserve Bank in New Zealand reports that 80% of dairy farmers in New Zealand are spending more than they’re earning.
The health of the Chinese economy will have a huge impact on the future of the dairy industry in New Zealand.
“Demand is really quite fragile over there and it’s our biggest export market for dairy products,” Geoff Parr said.
The next GDT auction takes place in two weeks time.
