This revision came after the range was brought down from $9–$10/kg to $8.50–$9.50/kg in late December as global supply dynamics continued to weigh heavily on pricing. The prospect of another double-digit payout was raised earlier in the season based on strong pricing and demand forecasts, but the ongoing supply surplus has eroded that confidence. Strong farmgate returns in 2024-25 now stand in contrast to a more cautious outlook for 2025-26, highlighting how quickly dairy economics can pivot in response to broader global market trends. Federated Farmers Dairy chairman Karl Dean has acknowledged that many farmers have already adjusted their expectations downward, effectively writing off a repeat of last season’s historic payout. The sentiment among producers reflects the wider reality that oversupply — particularly from key exporting regions — continues to exert downward pressure on milk prices.

Source: Otago Daily Times January 25, 2026 21:27 UTC