A kilo has gone down by 5bob in less than two weeks, milk yield must be rising at unprecedented levels.Interestingly, Productivity in the Jan-April period this year did not tail off as it does in other years which indicates improvement in the sector despite the delayed long rains, it has to be that farmers have managed to store hay and silage, or higher quality feeds, they have definitely improved.
Is demand rising? Higher demand leads to lower prices thanks to economies of scale and faster recouping of fixed costs, of course supply has to match demand.
Now, for higher supply to result into lower prices Brookside has to grow their marketbase to absorb the increased production, unfortunately this can only happen in the medium term ie 3-5 years. Plus supply must maintain the current high levels.
Basically, shelf prices can only go down after a new equilibrium is found which takes time.