Is the dairy market turning sour again?
News from the international dairy market has turned sour all of a sudden and comes at just the wrong time for Irish dairy farmers still reeling from a tough year for milk prices in 2016.
Sentiment at the Global Dairy Trade has begun to turn following positive auctions throughout most of late 2016.
Dairy prices fell last week with WMP and SMP led prices lower, dipping 3.7pc and 3.8pc, respectively. Overall, auction prices fell 3.2pc.
According to Nathan Penny, Rural Economist with New Zealand bank ASB looking at 2017 to date, WMP prices have now slid 10pc, while overall prices have drifted 5pc lower.
However, he does note that prices compare much more favourably to their levels a year ago; WMP and overall prices sit 72.5pc and 59.9pc above February 2016 levels.
"The dairy price decline follows a much - improved New Zealand production outlook.
"For example, we have lifted our nationwide production (i.e. for all dairy companies) forecast to a 3pc decline compared to last season, from a 5pc decline previously. Fonterra has made a forecast change of similar magnitude for its milk collections.
Moreover, Penny said this season’s weather risks in New Zealand have largely receeded.