NZX futures support $10 milk price for 2026 season amid strong demand
'It's very strong at the moment if you are a dairy farmer in New Zealand, with milk price futures sitting at $10/kg,' NZX derivatives sales manager James Atkinson said.
'A lot of dairy farmers - if not all - will be making a profit at that level, so that's a really good sign,' he said.
Driving the milk price futures higher have been Global Dairy Trade prices for the two pivotal products, wholemilk powder and skim milk powder.
Indications from the smaller 'pulse' auctions - which occur between the GDT auctions - point to another increase at the next auction on August 6.
'Overall, demand has been pretty sticky and robust over a period of time when volumes are increasing in New Zealand,' Atkinson said.
'There is a lot more volume coming on going into spring, and Fonterra is putting volume on the GDT platform, but prices are managing to stay at historically high levels.'
NZX's head of dairy, Cristina Alvarado, said global production trends look to be running in New Zealand's favour.
'We know that production in Europe has not gone well for the key countries, Germany and France, with the little ones keeping it afloat,' she said.
'Production in New Zealand has been doing well, but the fact that the other key regions are not doing that well keeps up interest in demand,' she said.
Production in the US is also increasing, but the imposition of world trade tariffs is adding an element of uncertainty to that market.
Meanwhile, domestic dairy production in China was declining while demand had remained steady, she said.
Atkinson added a steady New Zealand dollar at around US58c to US61c had probably helped keep milk price futures at the $10/kg mark.
Further out, NZX futures for the 2027 season point to $9.50/kg.
ANZ's latest agri report said good pasture growth over winter meant there was no shortage of feed.
The bank said a surge in imports of the feed supplement, palm kernel expeller (up 34% in the past year) should provide extra support.
Last season's milk production was up 3%, the largest year-on-year gain since 2014-15.
'It is hard to make large gains two years in a row, but, with the stars aligning, growth of 1-3% should be attainable in 2025-26 if the weather cooperates,' the bank said.
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
4 hours ago
- NZ Herald
NZX steady as Eroad rallies on road user charge changes
'Of course, we have an earnings season starting next week, so you tend to see volumes a little lighter as people await the company announcements and guidance especially,' Sullivan said. 'US markets were positive, even though India has been hit with a higher tariff level than initially quoted. Our interest rates are buoying the market more than geopolitical instability and tariffs.' On the NZX, Eroad rallied by 26.42% today after the Government unveiled a raft of changes to the country's Road User Charges system in preparation for 3.5 million vehicles becoming liable for the charges. As has previously been signalled, the current Fuel Excise Duty is expected to be abolished in the coming years, with all vehicles moving to Road User Charges (RUCs). Eroad's share price lifted 42c to $2.01 after 3.1 million shares changed hands on turnover of $5.9m. 'Obviously they're seen as a potential frontrunner for being able to offer a solution in that area. Material uplift in volume and share price and their market cap would put them up as a NZX 50 constituent as well, so the potential to eventually be included in NZX indices.' Elsewhere, Radius Healthcare shares rose 3.90% to $0.40 on high volume of 10.4 million shares after it announced an upgrade to its projected underlying earnings before interest and tax. Sullivan said Radius doesn't seem to be able to put a foot wrong at the moment, noting its share price rose 22% in July, 22% in June and 25% in April. Chorus also had another positive day, with its share price lifting 1.21% or 11c to $9.20. Contact Energy, meanwhile, fell 0.76% to $9.10 after $11.1m in turnover was traded. US markets Wall Street stocks rose on Wednesday local time, with Apple and most other large tech companies rallying as markets largely shrugged off US President Donald Trump's latest tariff hikes. Apple piled on more than 5% after White House officials said the tech giant plans an additional US$100 billion ($168b) in capital spending in the United States. Amazon and Google parent Alphabet were among the other large tech names that also rose. 'By standing up and publicly announcing a domestic investment with President Trump, it reduces the likelihood of Trump imposing new tariff burdens on Apple,' said FHN Financial's Chris Low. The Dow Jones Industrial Average finished up 0.2% at 44,193.12. The broad-based S&P 500 gained 0.7% to 6,345.06, while the tech-rich Nasdaq Composite Index climbed 1.2% to 21,169.42, less than 10 points from an all-time record. Trump ordered an additional 25% tariff on Indian goods. The levy, which is expected to come into force in three weeks, is due to New Delhi's continued purchase of Russian oil. – Additional reporting AFP Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
RNZ News
6 hours ago
- RNZ News
Is AI the future of deciding prices?
Delta Airlines has hit turbulence after it publicly stated it wants AI to set 20% of its domestic ticket prices by the end of the year, raising concerns about so called survellience pricing. Delta has since issued a statement saying it does not intend to use AI to leverage individual consumer-specific data such as prior purchasing activity, but several senators are still concerned they're working on legislaton to stop it happening. Professional teaching fellow at the University of Auckland and an expert in the use of AI and digital technologies in marketing, Patrick Dodd spoke to Lisa Owen. To embed this content on your own webpage, cut and paste the following: See terms of use.
Scoop
8 hours ago
- Scoop
Workers Moving Towns In Desperate Quest For Jobs
Krystal Gibbens, Journalist People are having to take jobs in different towns from where they live in order to find work as unemployment rises. The unemployment rate has risen to a near-five year high of 5.2 percent as businesses either sack staff or stop hiring, with 156,000 people out of work. It comes as Auckland's Business Chamber boss Simon Bridges is calling on the government to do more to stimulate the economy in the supercity and the country. As well, it's been revealed the unemployment rate for Pacific people is 12.1 percent, more than double the national average, and the Salvation Army says the situation may get worse. Hawke's Bay woman Shannon Kendall had to take a job two hours away from where she lived to find employment. Kendall is a project manager in the construction industry. She said after being made redundant in 2024 she spent a year looking for work before finding a job in Palmerston North. "I was applying for jobs in Auckland, I was applying for jobs in Australia and I was ready to just do whatever I had to do and commute big time to have employment and to stay in my industry." Kendall said it had been a tough 12 months and she was thankful for the job. But despite finding a job in another town, Kendall is commuting rather than relocating, with a son still enrolled in school in Hawke's Bay. Rotorua-based writer-editor Matt Walker meanwhile lost his job in the public service cuts early last year. Walker found himself sending out more than 200 job applications over the next 15 months, with no success. "I kept applying for public service roles in Rotorua and got a short-term contract at one point but I continued to look for a permanent job," he said. Walker, who has 25 years of professional experience, said the job market had become fiercely competitive. In one application process, he was up against 220 other candidates. "It's tough out there with hundreds of people going for the same role," Walker said. Now, he finally has a job in the NGO sector, but it requires him to travel from Rotorua to Christchurch. Walker said his current workplace has been incredibly supportive, providing him with all the resources he needed to succeed. "I'm not looking for a job change now," he said. Christchurch man James Brown earlier told RNZ he had applied for more than 100 jobs without luck. The insurance adjustor moved to Brisbane after he was made redundant just over a year ago. He was still working there, but needed to return home to his partner and children. "I have an extensive CV, it shouldn't be this difficult to find a job," he said. The latest figures show Auckland's 6.1 percent unemployment rate for the June 2025 quarter is the worst of all regions. About 15,000 more Aucklanders are without a job than this time last year. Employers and Manufacturers Association (EMA) head of advocacy Alan McDonald said while the agriculture industry was bolstering employment elsewhere, Auckland had different economic drivers. Jobless numbers worse for Pasifika Ana Ika, social policy analyst at the Salvation Army, told Pacific Waves that the higher unemployment rate for Pacific reflected difficulties around finding work and education opportunities in the current climate. "Our labour force participation rate actually hasn't changed that much, but our unemployment has increased," she said. That indicated a lot of young people had entered the labour force and were not securing jobs or training and education opportunities, she said. "We would think…that a lot of that unemployment for Pacific is predominantly our young people," Ika said. Intern Kajal Nair contributed to this story.
