NZ Milk Supply Dries Up As Demand Spills Over
NEW ZEALAND - Milk prices worldwide are rising faster than ever and won't be falling anytime soon because of growing demand in China and Latin America and dwindling government supplies.
16 May 2007
1 minute read
Dairy farmers had failed to keep pace with a 3 per cent increase in annual milk consumption, said Rabobank Groep in the Netherlands, the world's biggest agricultural lender.
Since 2001 consumption has increased by 13 billion litres of milk a year on average, or about what is produced each year by New Zealand, which along with Uruguay and the Netherlands, is benefiting from the increased demand.
US Government data shows reduced subsidies have eliminated milk surpluses in Europe and slowed production growth in the US. The price rally started last year after Australia reduced exports because of its worst drought in a century.
"Over the next several months we're going to see some pretty strong prices on all milk," said Larry Salathe, an economist and dairy expert at the US Department of Agriculture.
Production needed to bring prices down "takes at least several months, usually a year to two years, to come".
