The GDT index dropped 0.7% – butter fell by 12.1%, anhydrous milk fat by 4.2%, cheddar down 4.5% and lactose 2%.
On the credit side, whole milk powder (WMP) was up 0.7% and skim milk powder (SMP) by 2%.
The continued strength in milk powder prices gave dairy analysts reason for continued optimism on milk payouts this season and the next.
Westpac senior agri-economist Nathan Penny says the average WMP price across all contract periods of US$4115/tonne suggests a farm gate milk price in the $7.90 to $8/kg milksolids range.
The sideways trend of the past two months continued with WMP and the overall market index moving no more than 1% either up or down.
“These results have cemented in the bumper gains from early March,” Penny said.
But the two milkfat products are behaving differently, apparently with auction offerings well in excess of demand right now.
Both butter and AMF enjoyed a strong run of six months, totalling 50% gains in price until mid-March.
They have since dropped 13.5% and 7.5% respectively.
“It seems the added volumes of butter have saturated the market, with sold volumes falling well below maximum offer volumes,” NZX dairy analyst Stuart Davison said.
He thought that might signal the end of strong retail butter demand that had appeared during covid-19 lockdowns and a surge in home cooking.
ANZ agricultural economist Susan Kilsby says that during April dairy prices had plateaued at elevated levels and WMP were 40% higher than a year ago.
“Strong global demand, which includes some rebuilding of stocks, combined with modest supply growth is currently supporting strong prices for milk powders and milkfat products,” Kilsby said.
The ANZ Commodity Prices meat and fibre index rose 6.6% during April and lamb contributed 8% increase, beef 6%.
The forestry index gained another 3.5% and now sits at an all-time high.
In total, the world price index rose 2.3% during the month to extend its record high.
In New Zealand dollar terms, the gain was 2.2% and that index is 7% higher than April 2020.
Compared with the 100 starting point in 1986, the world index is now 3.5 times higher and the NZD index 2.6 times higher.
NZ is enjoying an across-the-board commodities price boom, driving the recovery from covid-19 and boosting our export earnings.
