Dairy products near bottom of prices cycle
World prices dropped steeply in the second half of 2008, as international buyers pulled back in the expectation that prices would decrease. The global economic downturn also hit markets.
The likely result is low milk prices in the peak delivery months of 2009, said Teagasc researcher Thia Hennessy, who indicated the global financial crisis could rule out price improvements before the end of 2009.
“Looking a little further ahead, the outlook is more positive,” she predicted. “New Zealand will eventually run out of suitable dairying land and this will constrain its production growth, unless New Zealand farmers begin to change their production system by increasing supplementary feeding. Growth in dairy exports from Brazil will be limited by supply chain problems. The recovery in production in Australia will continue, but growth over the longer term will be challenged by the affordability of irrigation. Argentina has good growth potential but this will continue to be challenged by government policy,” she said.
