This is the highest level for the index since April last year, and came on the back of mostly stable prices for the major milk powders and strong price increases for milkfat products and cheese. Butter and cheese were up in price by over 10% on average across all contract periods, with higher lifts for nearer deliveries. Anhydrous milk fat (AMF) was up 2.2% on average, rising in price across near contracts, but there were smaller rises for further out contracts and fell 0.5% for July delivery. AMF supplied by Fonterra was forecast to be much higher in the nearer contracts.
Both Fonterra and DairyAmerica supplied butter had big increases, though DairyAmerica supplied butter had the biggest lift of 13% in the contract one period, in which Fonterra did not make any offerings. Fonterra supplied product maintains a US$250-350/tonne premium over DairyAmerica product. Fonterra was the only company to offer cheese at the auction.
For the milk powders, skim milk powder (SMP) and whole milk powder (WMP) results were mixed. SMP prices fell for nearer deliveries, but increased as the delivery period moved further out. Fonterra supplied medium heat SMP fell in price by close to 1% across all contracts bar contract six, while DairyAmerica supplied product fell by 2% for contract one, but rose by 4.3% in contract six. This brought a much flatter forwards price curve for SMP, which had been sloping downwards after the last GDT auction.
Milk protein concentrate, rennet casein and butter milk powder also rose by 7.2%, 4.2% and 3.0% respectively, on fairly limited offerings.
Click here to download the GDT Results Analysis Report – 21 January, 2014.
