The rally in global dairy prices is expected to be sustained into 2017 courtesy of falling worldwide production, with Europe finally coming to the party.
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However, it won’t flow through to a turnaround in declining milk production in Australia this season. Australia is on track for a five per cent national drop in milk production, a response to the suffocating farmgate price squeeze and the ongoing impacts of excessive rain.
Dairy Australia and Rabobank say decreased production from Australia, New Zealand and Europe is helping ease the downward pressure on global commodity pricing caused by the recent oversupply issue.
Rabobank dairy analyst Michael Harvey said the contraction in worldwide production was expected for at least the next 18 months.
