Federated Farmers has painted a gloomy picture for New Zealand's biggest dairy export competitors, Europe and the United States but says it could benefit this country.
After New Zealand, the European Union is the second biggest dairy exporter, followed by the US.
Federated Farmers' dairy vice-chair Kevin Robinson says half of continental United States is now in drought, putting the brakes on dairy production there.
He says a drought in the US is curbing grain production in a country where farmers rely heavily on grain to feed stock.
In Europe, he says, hundreds of farmers from Italy, Germany, Ireland, and France have protested at payouts lower than the cost of production by spraying the European Parliament with milk, while in the UK producers are at the mercy of a supermarket price war.
Mr Robinson says their loss may be New Zealand's gain as prices go up when the supply of milk is lower.
He says any stockpile of dairy commodities in Europe will be used up as production contracts.
