March 11, 2005

Global dairy prices continue to surge amid tight supplies

Global dairy prices continue to move at record high levels, mainly due to extremely tight supplies, especially from Australia and New Zealand, two of the world's biggest exporters.

Australia, which produces 20 percent of the global dairy trade, had been badly hit by drought.

Various factors make it difficult to predict the movement of dairy prices in the coming months. There has been some weakening of European prices but this has not affected returns down under to date. One forecasting group is predicting a further 15 cents a kg rise this season; others are not nearly as confident.