Hopes dairy boom will buffer farmers' 'tight' profits due to war in Middle East
Higher dairy prices in New Zealand are expected to help offset input costs linked to the conflict in the Middle East. Farmer representatives say rising fuel and fertiliser prices have been squeezing margins. The sector is hopeful that the global dairy price index will remain supportive.
RNZ Business · Monique SteeleAccording to RNZ, the New Zealand dairy sector expects strong global prices to offset cost pressure linked to the Middle East. Farmer associations highlight rising prices of fuel, fertiliser and animal feed, noting those items are running well above historical averages. In some regions cash-flow pressure has approached levels seen in recent stress years.
Fonterra and other major dairy processors are keeping pre-season payout forecasts firm. Global dairy prices are expected to remain supportive in the near term, particularly given a visible improvement in Chinese demand. The government said work continues on diversifying the fertiliser supply chain.
Analysts say global oil price moves will again be decisive in the near term. The Global Dairy Trade auctions and external demand data over the coming weeks will be closely watched. The dairy sector occupies a significant place in the country's economy through export revenue and serves as a macro anchor for a balanced outlook.
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