THE MARKETS Those of a non NZ persuasion probably don’t care but milk is now worth less than not only gold (which is worth nothing) but also the grass used to manufacture said pale fatty elixir of (probably) not the gods but (almost certainly) of the dogs. Last week’s global auction saw prices fall to 6 year lows in both USD & NZD terms. Worse, volumes were high, forward contracts are worse, & the Chinese have more inventory than they have ever had & vindictive Vlad has banned food imports from bad countries like us while NZ warehouses are at capacity & can’t store the stuff. Worse, First NZ Capital interpolate from this that current spot prices imply a $4.00 payout according to our modelling which would be lower than the cost of production & 1/3rd below the current $6/kg prediction. (They are the outliers, however: most have the payout … Continue reading Extract from The Clearance Newsletter 11.9.14