July 15, 2005

Australian and New Zealand dairy prices expected to remain high

Australian and New Zealand's dairy prices were not expected to fall despite hovering at high levels for an extended period, according to ANZ bank.

Recent hot and dry conditions in Europe, which would limit the extent of production surpluses in the EU this year, would reinforce the strength in Australian and New Zealand's dairy prices, ANZ said.

ANZ added that the average peak-to-peak price cycle for dairying was about four years and it was already four years into the present cycle.

However, peak production in mid-October might weaken international dairy prices significantly.

While beef prices peaked late last year, they remained strong due to tight supplies and BSE-related restrictions out of Canada and the US, according to ANZ.