Pressure piles on co-ops to up milk price
Pressure is piling on dairy processors to deliver a significant lift in August milk prices following a dramatic recovery in global dairy markets.
Falling European output and increased demand from Chinese buyers has seen a sharp turnaround in dairy fortunes over the last fortnight.
While traders had predicted a lift in dairy prices in early 2017, the speed of the recovery has taken many by surprise.
Dairy analyst Kevin Bellamy from Rabobank predicted that the current bounce would not hit the heights of 2014 but he said the recovery was gathering pace.
He said supplies of dairy stocks on world markets had been hit by a combination of low European production as a result of poor weather and prices, a sharp fall in Chinese milk production due to a very warm summer, and floods in Argentina which had curtailed milk output.
However, Mr Bellamy cautioned that demand remained weak in the Middle East, North Africa and West Africa.
He said there was also potential for a significant growth in New Zealand supplies in the short-term, and in US output.