Saturday, March 30, 2024

Milk powder prices steady at GDT auction

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Milk powder prices remained stable at this morning’s Global Dairy Trade auction.
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Whole milk powder was up 1% to US$3314 a tonne while skim milk powder was down 0.1% to US$2608.

Other prices had greater variations but the result was the overall price index was up 1.3% to an average price of US$3537.

The biggest change was for lactose which gained 12.4% to US$910. Butter milk powder fell 7.5% to US$2254 while butter gained 4.9% to US$4593.

Anhydrous milk fat was up 4% to $5765while cheddar was down 3.7% to US$3798.  Rennet casein was down 0.4% to US$6445.

There were 104 winning bids from 172 participants. They bought 21,273 of products.

AgriHQ analysts said the milk fat products performed strongly.

“Global demand for milk fat products remains very strong. Butter continues to be priced at a premium in the United States,” dairy analyst Susan Kilsby said.

Milk powder prices exceeded market expectations.

While the price index for WMP lifted just 1%, higher prices were recorded in each of the first five contract periods traded.

Regular grade New Zealand-sourced WMP supplied by Fonterra with an April delivery date was priced at US$3290 a tonne, US$90 above the price which the February WMP futures contract closed at yesterday.

In early morning trading today the February WMP futures contract lifted US$100 to US$3300/t.

Demand for skim milk powder (SMP) was considerably better than the 6% price fall anticipated by the NZX Dairy Derivatives market.

The SMP price index was virtually unchanged from the previous event. Gains in some of the SMP contracts were offset by falls in other contracts.

Fonterra SMP generally performed well, trading at a considerable premium to similar product offered by European dairy company Arla Foods.

“Oceania SMP continues to command a clear premium over both European SMP and non-fat dry milk trading within the United States. Global supply of SMP is high with huge stocks of this product still sitting in European government owned stocks.

“But product from Oceania is harder to source because of milk intakes being down in both NZ and Australia this season. The tight stocks in Oceania are putting upward pressure on prices.”

The NZX Dairy Derivatives market reacted strongly to the GDT results with the price of the February and March SMP futures contracts gaining $225/t and $200/t respectively earlier this morning.

Cheese didn't fare as well at the auction with the price of all cheddar contracts offered decreasing.

“In the international markets NZ exporters face stiff competition from European cheese suppliers. European exporters are looking to expand their share of the growing Asian market for cheese and are competing strongly on price in these markets,” Kilsby said.

There was a sharp 12.4% lift in the price index for lactose. The two food grade lactose products supplied by Arla Foods were well supported with prices reaching the highest level that Arla Foods has seen for product traded on GDT.

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