Below is a useful graphic from the BNZ and some commentary on the New Zealand milk production forecasts.
Looking ahead, we continue to anticipate international price improvement into 2016 as a strong El Nino weather pattern dents NZ production and pushes up the global price of wheat. The BNZ forecast a 6% fall in NZ milk production for the 2015/16. This anticipated weather effect is expected to amplify a decline in NZ production already in train via fewer cows and low milk prices discouraging supplementary feeding. A large hit to NZ production could see prices rise swiftly. But, with EU production quotas now removed, more EU product would be expected to prevent prices from swinging as sharply higher as we have seen in previous years when NZ production was restricted.