17 Jan 2015

2015 picked to be a better year for dairy

8:37 pm on 17 January 2015

An economist is predicting this year will prove to be a better year for the dairy industry.

cows

The ASB Farmshed Economics Report predicts 2015 will be a year of moderation for dairy. Photo: AFP

Global prices fell sharply last year and Fonterra has cut its forecast payout for a kilo of milk solids from $7 last June to $4.70. The payout the previous season had been a record $8.40.

The ASB Farmshed Economics Report predicts 2015 will be a year of moderation for dairy, after a bumpy 2014.

Already there are positive signs, with prices rising in the first global dairy trade auction of the year.

The bank's rural economist, Nathan Penny, said he expected prices to recover gradually over the next 12 months as dairy markets moved back into balance.

Meanwhile beef prices appear to be moving in the opposite direction.

Mr Penny said they had gone from a boil to a simmer in the past two months and while prices would remain high they would come down off record peaks in 2015.

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