Latest / Best of Business / Jamie Mackay: The Country host on the projected dairy prices for 2025/2026

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Jamie Mackay: The Country host on the projected dairy prices for 2025/2026 · Best of Business

• 0:09
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• 0:18
  Speaker 1: The Rural Report on Hither Do to See Allan Drive,
• 0:22
  Speaker 1: Jamie McKay's with Us host of the Country Jamie good Evening. Gooday, Ryan,
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  Speaker 1: So is a nine dollar milk price on the cards
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  Speaker 1: for twenty five twenty six? What do we think?
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  Speaker 2: Well, it's not what I think or you really, Ryan,
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  Speaker 2: it's probably what the experts think. And having just read
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  Speaker 2: and reviewed the Rabobank Q four Global Dairy Quarterly Report,
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  Speaker 2: a one sentence hit me right between the eyes. This
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  Speaker 2: was authored, by the way, by Emma Higgins, who's their
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  Speaker 2: senior ag analyst. She wrote, there is elevated risk that
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  Speaker 2: the farm gate milk price moves lower across the course
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  Speaker 2: of the season season, which would mean that the final
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  Speaker 2: season payout lands around the nine dollars per kilogram of
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  Speaker 2: milk solid mark. So that's not a great number when
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  Speaker 2: we start the season with a ten dollar fore cast.
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  Speaker 2: Of course, Fonterra has since trimmed that to nine dollars fifty.
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  Speaker 2: But if it gets down to nine dollars, well, you know,
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  Speaker 2: the margins are getting a bit skinnier there because yesterday
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  Speaker 2: Dairy and Z came out with their econ tracker, which
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  Speaker 2: is their tool for working out how much it costs
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  Speaker 2: to produce milk, and they're saying the break even price
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  Speaker 2: is eight fifty, So you know, look, ten dollars is great,
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  Speaker 2: Nine dollars fifty is okay. Nine dollars jury's out a
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  Speaker 2: wee bit on that one. Still got a long way
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  Speaker 2: to go. But the reason all this has happened, Ryan,
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  Speaker 2: and this is in the Global Dairy quarterly report as well,
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  Speaker 2: is because of stunning that's the word they've used, stunning
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  Speaker 2: global milk production growth across the second half of twenty
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  Speaker 2: twenty five right around the world, the EU and e
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  Speaker 2: K and UK should I say, have posted their strongest
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  Speaker 2: growth since twenty seventeen. For the month of October, US
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  Speaker 2: milk flows posted their fifth consecutive month of rates over
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  Speaker 2: three percent. Here in New Zealand, we're ticking along at
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  Speaker 2: about three point four percent ahead of where we were
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  Speaker 2: last year. The Big Seven that's the EU, the US, US, Australia, Brazil,
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  Speaker 2: Argentina and Uruguay forecast to finish twenty twenty five up
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  Speaker 2: two point two percent year on year. So the guts
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  Speaker 2: of it all, Ryan, is, you know, the milk price
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  Speaker 2: has gone up. People around the world, especially in places
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  Speaker 2: like the States where grain prices are low, have just
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  Speaker 2: moved their production from feeding stuff to feeding other stuff,
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  Speaker 2: basically dairy cows, and therein lies the.
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  Speaker 1: Problem and then all the milk comes on tat. Now
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  Speaker 1: our national lamcrop for this season is up a bit
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  Speaker 1: on the previous Yeah.
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  Speaker 2: This is sort of a this is a really good
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  Speaker 2: news story, to be honest, Ryan, If you remember back
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  Speaker 2: and you're far too young to remember back to the
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  Speaker 2: nineteen eighties, but when Rob Muldoon was in power and
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  Speaker 2: we had farming subsidies on a national sheep flock peaked
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  Speaker 2: at about over seventy million. Now we've got about twenty
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  Speaker 2: three million, twenty three or twenty four million, so we're
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  Speaker 2: well more than half. But the national lamb crop is
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  Speaker 2: going to be nineteen point sixty six million according to
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  Speaker 2: the Beef and Lamb New Zealand latest lamb crop report.
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  Speaker 2: That's up about two hundred thousand lambs on last season.
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  Speaker 2: But the good news part of the story is a
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  Speaker 2: the lambing percentage has improved a whole lot one hundred
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  Speaker 2: and thirty one point one percent average across the country.
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  Speaker 2: That's amazing when you consider some of the land that
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  Speaker 2: they're farming on with these sheep sheep farms, and that's
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  Speaker 2: off the back of one point nine percent reduction and
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  Speaker 2: breeding new numbers. So the number of lambs processed is
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  Speaker 2: probably going to be in line with last year, which
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  Speaker 2: was down a million on the year before. And part
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  Speaker 2: of the reason for that is even though we've got
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  Speaker 2: more lambs, we're only going to process about the same amount.
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  Speaker 2: That's because some of those lambs born are going to
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  Speaker 2: be retained as you lambs to rebuild the breeding flock.
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  Speaker 2: Global lamb supply remains constrained. They're supported by an expected
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  Speaker 2: five point eight percent reduction in Australian lamb export availability
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  Speaker 2: and continued low New Zealand supply. The guts of all
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  Speaker 2: this is that farm gate prices are at historically high
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  Speaker 2: levels and probably will remain there at least for this season.
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  Speaker 2: Here's the final number for you. Ryan lamb is now
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  Speaker 2: eleven dollars a kilo milk or the milk price could
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  Speaker 2: be as low as nine dollars a kilo. It's not
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  Speaker 2: often that lamb exceeds deary, it's a while since we've
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  Speaker 2: seen that, so watch the.
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  Speaker 1: Space certainly will Jamie, thank you for that.
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  Speaker 2: Jamie McKay, Host of the Country here on News Talk SeeDB.
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