Further declines in prices at the GlobalDairyTrade auction
are likely heading into 2014 as increasing supply in New
Zealand and overseas finds its way on to international
markets, Westpac senior economist Anne Boniface says.
There was a modest 1.9% fall in this week's auction, although
prices remained 44% above those of the corresponding time
There had been a surprisingly strong rebound in New Zealand's
agricultural production after the drought earlier this year
and while that was good news, increased supply would
eventually weigh on prices, she said.
Dairy production had been the quickest to rebound. Fonterra
reported production was up 5% on 2012 for the four months
ended September while other companies had reported even
Last week, Westland Milk Products was reportedly seeing milk
flows running 16% ahead of last year and there were reports
of smaller Waikato dairy companies collecting 8% to 10% more
than the corresponding time last year.
Rabobank's latest agribusiness monthly said the only
potential climatic impact so far this season was if the many
irrigators blown over in Canterbury during high winds in
early September were not repaired by the time it started to