Farmers, by nature, have a tendency to favour the free market and understand that prices can go up or down according to the balance of supply and demand. None more so than the New Zealand farmers, with their Global Dairy Trade internet auction.

But we all know that when there is no enthusiasm around an auction ring, the prices can fall sharply to unrealistic levels when supply marginally exceeds demand. This has happened with the GDT auction.

If you can take an animal home from the market, you have a choice. There is no such option for New Zealand’s milk suppliers as they enter the new season with their hugely seasonal supply. Even if 150,000 extra cows are being culled, it won’t stop the tide of milk that will be flowing off farms in New Zealand in the next few months.

The resulting pressure on prices coincides with the extension of the Russian ban on importation of various products from the European Union. Producers are the fall guys in a geopolitical dispute. Heads of state who have taken a stance over Russia and Ukraine should face up to the unintended consequences and empower the EU to put a realistic base in the market.