A new economic report suggests a generally positive outlook for the dairy industry heading into the new year, with continuing high production levels.
The first Global Dairy Trade auction of 2019 posted a 2.8 percent overall lift in global milk prices - the third consective rise.
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ASB senior rural economist Nathan Penny said all key product types showed price increases however, auction volumes were light due to the holiday period.
"Notably, whole milk powder (WMP) prices were the laggard in making gains," he said.
"NZ is the dominant WMP exporter, and NZ production is in healthy shape thanks to good growing conditions," Mr Penny said.
He said the consistent underperformance of WMP prices is related to the strength of NZ dairy production, with weather conditions a boon over the peak production months.
"We expect production will remain firm through the rest of the key parts of the season, with the full season likely to be up 5 percent from the 2017/18 season."
Nathan Penny said the only cautionary tale with the auction outcome was that the volume sold was around 20 percent down on the previous two auctions, while the number of participating bidders was down only slightly compared to the typical numbers seen.