Friday, March 29, 2024

Dairy prices level out in latest auction

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Dairy product prices rose in the latest GlobalDairyTrade (GDT) auction, inching higher from the lowest level since July 2012, as declines in butter milk powder and cheddar were offset by gains in rennet casein and skim milk powder.
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The GDT price index crept higher to US$2795, up from US$2787 two weeks ago. About 50,800 tonnes of product was sold, down from 57,010t of product two weeks ago.

In the latest auction, rennet casein rose 1.3% to US$8343/t, while skim milk powder gained 0.9% at US$2619/t. Whole milk powder added 0.6% to US$2692/t.

Butter milk powder dropped 6.9% to US$3140/t, while cheddar declined 6.5% to US$3077/t.

Butter fell 2.5% to US2698/t, while anhydrous milk fat gave up 2.2% to US$3264/t.

Neither lactose nor sweet whey powder were offered at the event.

The New Zealand dollar traded at US0.8152 before the release of the auction results, before climbing as high as 0.8230 after the release. The kiwi recently traded at 0.8209.

There were 152 winning bidders out of 191 participating bidders at the 11-round auction. The number of qualified bidders fell to 642, down from 660 at the last auction.

“With peak milk about four weeks away we could do with some good news and while steady as she goes isn’t a plus sign, at least it is not a negative,” Federated Farmers dairy chairman Andrew Hoggard said.

“While cheeses and anhydrous milk fat fell, it was great to see plus signs beside the milkpowders.

“The last two auctions have been for over 50,000 metric ton of product and both have had over 150 winning bidders. The last four trading events have seen two falls, one very minor fall, and today’s no change.

“While global milk production is still feeding into the market I have a hunch we’re close to or at the bottom but there’s a heck of uncertainty out there. The Russian situation and dislocation of European milk is still playing out.

Hoggard said that only auctions since June would affect this season’s payout.

“Going back to February has absolutely no bearing on the 2015-16 season we are currently in. The only GDT auctions relevant to this season’s payout are those starting June 3, 2014.

“Going back to February may make for a more dramatic story but it is wrong if you are talking the current season’s payout.

“Federated Farmers advice remains to budget conservatively as per previous advice,” Hoggard said.

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