March 10, 2026 • 5 mins
Rabobank’s Senior Ag Analyst says Global dairy commodity prices have rallied this quarter – particularly for New Zealand and Australian product – despite the world’s milk supply continuing to grow and outpace demand. And is there a correlation between oil prices and whole milk powder?
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Speaker 1 (00:00):
She is a Rabobanks senior agg analyst. Her name is
Emma Higgins. She's just come out with the Q one
Global Dairy quarterly Report, and I must say, Emma, as
much as I appreciate your work, I was very disappointed
in this report that you didn't give me a number
a milk price. Why bother writing a report if you're
not going to give me a quarterly number update, It's a.
Speaker 2 (00:22):
Bit hush, Jamie. I feel like every time I to
give you a number, you tend to challenge it. So yeah,
we've gone for another approach this time. But no, look broadly,
you know, Fonterra has lifted demit price forecast from nine
bucks up to nine fifty. Great result. Obviously we started
season at ten. I think the biggest thing right now, Jamie,
(00:42):
is that there is so much volatility out there. Markets
are moving wildly at that commodity level, at that energy level,
and Deiry is to a certain extent getting caught up
in this as well. So I feel like at this
point in time, it's less about the number and more
about what what kind of risks and management process you
(01:02):
can pop into your business structure. Right now, with how
volatile the world is becoming.
Speaker 1 (01:07):
Well, let me try another angle. I was hosting a
panel yesterday at the Impact Summit and christ Church and
on that panel was none other than Fonterra chief executive
Miles Hurrell, and I asked him about the supposed correlation
between the price of oil and whole milk powder and
he kind of said, well, we live in a very
volatile world. Economies are struggling, that's going to be greater inflation.
(01:30):
But basically yes, it was his answer to the fact
that there is a correlation. So ultimately, Couldney Zealand dairy
farmers benefit from Donald Trump's actions in the Middle East
in the short term, at.
Speaker 2 (01:41):
Least in the short term. Yeah, I don't disagree with
any of that. So historically used to has been that
correlation between oil prices and homewalk power prices. If we
look to the oil markets, Holy moley, I mean financial
markets have been absolutely rattled by the situation this week.
Exhibit A was you know of Theay's wild whipsawing prices
(02:02):
heading close to about one hundred and twenty bucks a
barrel for cruit. Today we're sitting back around that mid
eighties mark, well down from Monday's highs, but still much
higher than most of the twenty twenty six prices around
that sixty dollars a barrel mark. So in the short
term I think New Zealand could benefit from it. We
just have to look at Exhibit B, which was the
GDT which was held last week. The Middle East were
(02:25):
buyers in that auction and they bought more when it
comes to skim of powder in particular, and they are
really important secondary market for New Zealand. So I think
the long and the short of it is New Zealand
might benefit from this. In this instance. The challenge will be,
you know, the distribution, the route to market, because right
now one of the critical show points is held up,
(02:48):
so to speak, and that's what's causing all of this uncertainty.
Speaker 1 (02:52):
Economics one oh one supply and demand. How come we're
getting a rising dairy commodity market when we've got a
rising supply some would say almost a blot.
Speaker 2 (03:03):
Yes, okay. So the things that we can try and
measure and understand somewhat suggest that milk supply still is
really strong and most of these exporting regions. We've talked
about this at lengths and previous interviews. There's still a
lot of milk coming out of the United States. December
milk for the European regions was very very high as
(03:24):
well compared to the year prior, and New Zealander is
also contributing to this. However, what we're seeing is New
Zealand markets out of step with some of the pressures elsewhere.
If we look to the GDT, the volumes that have
been offered on the GDT are now well below historic
(03:45):
levels for some commodities, and so that's really helped in
particular powder prices. And then we have another overlaying impact
where the high protein boom, which is very very strong
and we to markets, particularly in the United States, has
had a drag upwards in a positive way for protein prices,
(04:08):
and skim of powder in particular has been a major
beneficiary of that as well. So there's things that we
can measure at a high level, and then there's regional
nuances and dairy commodity nuances that New Zealand is benefiting from.
Speaker 1 (04:21):
Once again, just to finish on that was one of
the talking points at the conference the summit yesterday. This
boom and demand for protein, high value protein at bodes well,
doesn't it For the New Zealand airy industry.
Speaker 2 (04:36):
It really does bode well because if you think about it,
the way that we're consuming protein, it's great news story
for dairy. You know, you've only got to look through
the chilli aisles here in New Zealand to see all
these high protein yogurts taking up a lot of retail space.
If we think about some of those broader macro trends
around aging demographics and also things like gl as well
(05:01):
the weight loss drug, both of those two particular macro
trends lend themselves very nicely to dairy playing an increasingly
important role. And again, thinking about what we produce here
in New Zealand, we are lining up our ducks very
nicely to be the beneficiaries of this.
Speaker 1 (05:18):
Emma Higgins, co author of Rabobanks Q one Global Dairy Quarterly.
Love your work, but next time, give me a number.
See you later.
Speaker 2 (05:26):
By Jamie
She is a Rabobanks senior agg analyst. Her name is
Emma Higgins. She's just come out with the Q one
Global Dairy quarterly Report, and I must say, Emma, as
much as I appreciate your work, I was very disappointed
in this report that you didn't give me a number
a milk price. Why bother writing a report if you're
not going to give me a quarterly number update, It's a.
Speaker 2 (00:22):
Bit hush, Jamie. I feel like every time I to
give you a number, you tend to challenge it. So yeah,
we've gone for another approach this time. But no, look broadly,
you know, Fonterra has lifted demit price forecast from nine
bucks up to nine fifty. Great result. Obviously we started
season at ten. I think the biggest thing right now, Jamie,
(00:42):
is that there is so much volatility out there. Markets
are moving wildly at that commodity level, at that energy level,
and Deiry is to a certain extent getting caught up
in this as well. So I feel like at this
point in time, it's less about the number and more
about what what kind of risks and management process you
(01:02):
can pop into your business structure. Right now, with how
volatile the world is becoming.
Speaker 1 (01:07):
Well, let me try another angle. I was hosting a
panel yesterday at the Impact Summit and christ Church and
on that panel was none other than Fonterra chief executive
Miles Hurrell, and I asked him about the supposed correlation
between the price of oil and whole milk powder and
he kind of said, well, we live in a very
volatile world. Economies are struggling, that's going to be greater inflation.
(01:30):
But basically yes, it was his answer to the fact
that there is a correlation. So ultimately, Couldney Zealand dairy
farmers benefit from Donald Trump's actions in the Middle East
in the short term, at.
Speaker 2 (01:41):
Least in the short term. Yeah, I don't disagree with
any of that. So historically used to has been that
correlation between oil prices and homewalk power prices. If we
look to the oil markets, Holy moley, I mean financial
markets have been absolutely rattled by the situation this week.
Exhibit A was you know of Theay's wild whipsawing prices
(02:02):
heading close to about one hundred and twenty bucks a
barrel for cruit. Today we're sitting back around that mid
eighties mark, well down from Monday's highs, but still much
higher than most of the twenty twenty six prices around
that sixty dollars a barrel mark. So in the short
term I think New Zealand could benefit from it. We
just have to look at Exhibit B, which was the
GDT which was held last week. The Middle East were
(02:25):
buyers in that auction and they bought more when it
comes to skim of powder in particular, and they are
really important secondary market for New Zealand. So I think
the long and the short of it is New Zealand
might benefit from this. In this instance. The challenge will be,
you know, the distribution, the route to market, because right
now one of the critical show points is held up,
(02:48):
so to speak, and that's what's causing all of this uncertainty.
Speaker 1 (02:52):
Economics one oh one supply and demand. How come we're
getting a rising dairy commodity market when we've got a
rising supply some would say almost a blot.
Speaker 2 (03:03):
Yes, okay. So the things that we can try and
measure and understand somewhat suggest that milk supply still is
really strong and most of these exporting regions. We've talked
about this at lengths and previous interviews. There's still a
lot of milk coming out of the United States. December
milk for the European regions was very very high as
(03:24):
well compared to the year prior, and New Zealander is
also contributing to this. However, what we're seeing is New
Zealand markets out of step with some of the pressures elsewhere.
If we look to the GDT, the volumes that have
been offered on the GDT are now well below historic
(03:45):
levels for some commodities, and so that's really helped in
particular powder prices. And then we have another overlaying impact
where the high protein boom, which is very very strong
and we to markets, particularly in the United States, has
had a drag upwards in a positive way for protein prices,
(04:08):
and skim of powder in particular has been a major
beneficiary of that as well. So there's things that we
can measure at a high level, and then there's regional
nuances and dairy commodity nuances that New Zealand is benefiting from.
Speaker 1 (04:21):
Once again, just to finish on that was one of
the talking points at the conference the summit yesterday. This
boom and demand for protein, high value protein at bodes well,
doesn't it For the New Zealand airy industry.
Speaker 2 (04:36):
It really does bode well because if you think about it,
the way that we're consuming protein, it's great news story
for dairy. You know, you've only got to look through
the chilli aisles here in New Zealand to see all
these high protein yogurts taking up a lot of retail space.
If we think about some of those broader macro trends
around aging demographics and also things like gl as well
(05:01):
the weight loss drug, both of those two particular macro
trends lend themselves very nicely to dairy playing an increasingly
important role. And again, thinking about what we produce here
in New Zealand, we are lining up our ducks very
nicely to be the beneficiaries of this.
Speaker 1 (05:18):
Emma Higgins, co author of Rabobanks Q one Global Dairy Quarterly.
Love your work, but next time, give me a number.
See you later.
Speaker 2 (05:26):
By Jamie
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