Jacqueline Rowarth: Lincoln University Adjunct Professor on the global increase in milk production

Swings and roundabouts for the dairy sector, with prices set to weaken. 

Research by Rabobank suggests overall global production peaked last quarter, and this quarter won't be far behind. 

EU and UK are seeing their strongest growth since 2017 and US milk output has increased for five consecutive months. 

Lincoln University Adjunct Professor Jacqueline Rowarth told Andrew Dickens dairy farmers aren't feeling too glum, coming off good margins. 

She says they feel good when people want their product, and that joy's clearly spreading to other countries. 

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Episode Transcript

Speaker 1 (00:00):
So over the past year, thank god for the milk prices, right,
dairy prices well. A new report from Rubber Banks says
maybe there's too much milk for the market. Global dairy
prices are under pressure after surging New Zealand production through
the back half of the year, and rubber Bank says
the global dairy prices are set to weaken. Farmers have
been breaking records month after month. May through September. October
hit the third highest output ever. So joining us is

(00:23):
doctor Jacquelin Rath, a professor at Lincoln University. Good on
to you.

Speaker 2 (00:26):
To Jackelin, good morning.

Speaker 1 (00:28):
So what's behind the increase of production? In fact, you've
described this report describes the global increase as stunning.

Speaker 2 (00:37):
It's been building up for a while, and it's because
milk is a very good product and people want to
consume it, and it's good for so many different things,
and people sometimes forget the calcium various bitiments. So it's
wanted an increase in people around the world. It means
that they're looking for high quality protein, so milk's about

(00:57):
the best thing you can do. And for the protein,
the amino acids, in particular the ones we need, it's
about the most environmentally It is the most environmentally sensible
food you can consume.

Speaker 1 (01:10):
So go for it. Milk, yeah, exactly. So as the
price increases, of course the farmers say, oh, well, let's
pump out some more milk. But then that depresses the prices.

Speaker 2 (01:18):
Well, this is a global thing, not just New Zealand,
and certainly we have been responding to signals about producing
more milk, but their world and other countries can do
it more quickly than we can because they aren't on
seasonal production in the same way that we are matching
the grass curve. They they eat supplements. So our milk

(01:40):
is in demand because it's grass fed.

Speaker 1 (01:43):
But this is not great use for farmers. Well, I
mean no, I had to put it into some sort
of context because at the moment it's brilliant for farmers.
So this is less brilliant now.

Speaker 2 (01:52):
It's come off the peak at the moment, and we'll
see what happens next to you. But always farmers have
an eye on the cost of product. So at the
moment and for a while across the sector. So I'm
talking drive stock as well. People have wanted consumers have
been prepared to pay more for our product. Than the
cost of producing it. So we keep an eye on

(02:14):
the cost of production, and it's the margins. We should
always be looking at the difference between cost of production
and what people are prepared to pay, and that stuff
like trying to sell a house. When people want our product,
we feel good about it, but then the joy spreads
and other countries start producing it too.

Speaker 1 (02:31):
We know it swings and roundabout absolutely, Doctor Jacqueline Routh,
a profession Lincoln University.

Speaker 2 (02:37):
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