There is much uncertainty over US milk prices for the remainder of 2015 and for 2016, according to Bob Cropp, professor emeritus, University of Wisconsin, Madison.

Milk prices in the US, which have remained higher than prices in the EU and New Zealand, are likely to weaken when holiday orders are filled. The class III (milk for cheese manufacture) milk price for September was $15.85/100 pounds (30.75 c/l) and will be near $15.60/100 pounds (30.26 c/l) for October. Class IV (milk for the manufacture of butter and skim milk powder) will be higher for October but could drop to $14.50/100 pounds (28.13 c/l) by December.

The professor went on to say that further declines could be expected for the first half of 2016. How low prices will go depends on the level of milk production and domestic sales as exports are unlikely to improve due to the strong dollar coupled with lower dairy product prices in the EU and New Zealand.

The biggest worry for milk producers in the EU and NZ is that if dairy product stocks continue to increase in the US, they may start dumping product on the world market, further undermining the fragile balance that currently exists.