As New Zealand reaches the height of milk production (Sept-Oct), WMP plants are actively drying resulting in a stock build. Milk production is currently high (+5% y-o-y), while buying interest from the Middle East has eased. Therefore, as New Zealand is export-focused, this has led to slightly weaker prices. Elsewhere, Chinese stockpiles have continued to grow, which could add downward pressure to New Zealand WMP prices in the coming months, especially as New Zealand’s 2019/20 milk production has peaked.

WMP is a mainstay of New Zealand dairy production, with WMP pricing being a significant factor in determining seasonal milk prices. Although dairy producers feel there is sustained export demand, a continuing concern remains whether global economic growth will ease. This may exert downward pressure on New Zealand’s key export markets – China and the Middle East. This is likely to create bearish sentiment for export demand, and subsequently for New Zealand WMP prices in the near-term.