Friday, March 29, 2024

AgriHQ milk price unchanged

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The AgriHQ 2015-16 Farmgate Milk Price is unchanged at $4.14/kg milksolids (MS), still well above Fonterra’s latest forecast of $3.90/kgMS.
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The fall in prices at the March 15 GlobalDairyTrade (GDT) event was offset by a lift in prices in the NZX Dairy Futures market and a weaker NZ dollar.

GDT delivered lower prices for virtually all commodities traded with weaker prices recorded for both milk powders and fat based products.

AgriHQ dairy analyst Susan Kilsby commented, “The large volume of milk that is being produced around the world, particularly in Europe, continues to put pressure on the markets. For any substantial improvement in prices to occur we first need to see a reduction in milk production.”

“The NZX Dairy Futures market has previously been a good barometer of market sentiment, but despite futures prices softening in the past few days this market was factoring in a lift in GDT prices.”

The GDT Price Index for whole milk powder retreated by 0.8%, while the index for skim milk powder (SMP) came back by 2.5%.

“It is likely that we will continue to see weakness in SMP prices in the coming months. Stocks of SMP are building in Europe. Earlier this week the European Commission announced a range of measures designed to support its dairy farmers. The support mechanisms will distort market signals and therefore European farmers are likely to continue to produce more milk than the market requires.”

The GDT Price Index fell 2.9% with the average sales price falling US$63 to US$2190/t.

Prices were down for all commodities except butter milk powder (BMP) and lactose. The BMP Price Index lifted 6.4%, although prices for this commodity are still relatively weak. Lactose was up 0.8%.

The Cheddar Price Index lost 5.6% and prices for milkfat based products were also weak. The Butter Price Index was down 2.8% while the index for anhydrous milkfat dropped 6.5%.

Key metrics:

AgriHQ 2015-16 Farmgate Milk Price

$4.14/kg MS

No change

AgriHQ Snapshot Farmgate Milk Price

$3.75/kg MS

-17c

GDT Price Index

628

-2.9%

GDT Average Price

US$2190/t

-2.8%

Fonterra Regular Grade WMP-C2

US$1925/t

-1.0%

Fonterra Medium Heat SMP-C2

US$1690/t

-7.4%

Fonterra Regular Grade AMF-C2

US$2880/t

-9.4%

Fonterra  UHT Grade BMP-C2

US$1540/t

+5.8%

Fonterra Unsalted Butter – C2

US$2660/t

-5.8%

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