Agricultural banking specialist Rabobank says the recent collapse in dairy prices does not equate to long-term structural market change for New Zealand’s dairy sector.
Rabobank New Zealand CEO Ben Russell says the bank believes the long-term fundamentals for that country’s dairy sector have not been altered by anything seen in 2015.
He suggests the medium term holds plenty of upside for the New Zealand dairy industry.
Rabobank expects a substantial improvement in prices by the middle of next year.
The bank also feels current dairy market conditions are not the new normal, but a highly abnormal part of a difficult cycle.
Rabobank sees a number of turnaround triggers already at work – including milk price reductions in China, lower New Zealand production and reduced supply growth from the U-S and the European Union.
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