New Zealand Dairy Seasonal Outlook: Buckle Up for a Bumpy Ride Ahead

We anticipate a continued decline in 1H 2022 milk production in the Big 7 exporting regions before a mild recovery starting in 2H 2022 and continuing into 1H 2023. Dairy commodity prices now remain at elevated levels, sitting well above the five-year average. However, a clear short-term weaker price trend has emerged. The slow supply growth supports commodity prices, but demand remains uncertain, especially as nearly 35% of the Chinese economy is currently experiencing some level of lockdown. Chinese dynamics – including local lockdowns and domestic milk prices and production – will be key for NZ farmers’ fortunes.