NZ milk price cut backs up forecast for global market

New Zealand dairy farmers are on course for a 29% milk price slump, which will take nearly 2% out of their economy, such is the importance of their dairy industry.

Their main milk buyer, Fonterra, has cut its forecast 2015 milk price payout by 14%, citing a decline in global dairy prices in the face of strong global production, a build-up of inventory in China and falling demand in emerging markets.

New Zealand farmers seem to be taking this unfavourable milk price forecast in their stride – perhaps because history shows that milk prices and farm profits are cyclical, and the New Zealanders, like farmers here in Ireland, are better prepared.