Confluence of factors testing dairy market at crunch time

Poor conditions in the European market, and a milk surge in New Zealand, will test the dairy market, as it approaches a crunch point, due to the seasonal production peak in the northern half of the world.

The end of the first quarter of 2014 was always expected to be a price-pressure point, and a bumper end to New Zealand’s milk season (with output in January and February 7% ahead of last year) is adding to the pressure on global dairy auction prices, which trended downward in March.

However, the longer-term outlook is positive — with a new Australian forecast that Chinese dairy consumption is predicted to increase 74% by 2050, with imports continuing to play a strong role.