In its latest report, Australia and New Zealand Banking Group (ANZ) revised down the Fonterra 2020-21 season milk price projection to NZD5.75/kg milk solids vs. NZD6.45/kg previous estimate.
Key quotes (via Bloomberg)
“2019-20 forecast kept unchanged at $7.15/kg.
Significant deterioration in economic conditions in most parts of the globe.
More specifically the recent sharp fall in dairy commodity prices in the US and Europe.
Reduction in demand for dairy products from the foodservice sector.
Has led to growing surpluses of milk.
As a result “it’s only a matter of time before prices.”
The kiwi dollar is little affected by the ANZ milk-price forecast downgrade, as the risk-on market sentiment lifts NZD/USD back above 0.6050 levels. The spot adds 0.40% on the day and flirts with daily highs near 0.6070.