10 Nov 2008

Long term outlook for dairy farmers positive - report

5:55 pm on 10 November 2008

A report analysing the outlook for the world dairy market is reassuring for dairy farmers.

The report, from the specialist agribusiness bank, Rabobank, says that despite the current decline in dairy commodity prices, the medium to long-term outlook is positive.

Rabobank senior analyst Hayley Moynihan sees the world demand for dairy products continuing to grow, but the ability to supply that demand will slow.

She says that will underpin sustained higher prices into the future, although those prices will be volatile.

Ms Moynihan says there is still expected to be a tough market for the rest of 2008 and into 2009, but beyond that the market should return to solid supply and demand fundamentals, which will be positive for prices in the longer term.

She says New Zealand, with an estimated 300 new dairy farms that have started up and more conversions on the way, will be in a good position to capitalise on the growing demand.