Butter made an average price of US$4575/t. It was last at that price early this year. Butter prices had now declined for five consecutive auctions and had lost 25% of their value since September.
Nearest dated contracts fell the most with prices for butter to ship in January down 24.3%. Buyers were well covered for milk fat in the short term, AgriHQ analyst Susan Kilsby said.
The price of unsalted butter to ship in February fell 11.6% – far more than expected by the NZX Dairy Derivatives market ahead of the event. The December butter futures contract had indicated a fall of 1.5% across both December auctions.
The AMF price index was down 0.6%, with AMF achieving an average price of US$6836/t. Regular grade AMF to ship in February was down 1.2%.
Whole milk powder managed to claw back some value with its price index lifting 1.7%. WMP reached an average price of US$2830/t.
Regular grade WMP to ship in February was up 2.6%. The December futures contract for WMP last settled at US$2835/t, indicating an increase of 3.5% across both December GDT events.
The lower volume on offer appeared to have provided some support as nearly all the product was sold. There was 16,315t of WMP available, 20% lower than the volume available at the November 21 event.
“Buyers might also be concerned about the dry conditions in New Zealand,” Kilsby said.
Contracts for shipping in March and April saw the greatest support.
“NZ milk production has coped okay with adverse weather conditions to date but continued dry conditions are likely to affect milk production through the summer months.”
Skim milk powder (SMP) prices were once again surprisingly resilient. The SMP price index lifted 4.7%. SMP reached an average price of US$1774/t. Medium heat SMP to ship in February was up 6.4%. The Derivatives market had expected an increase of 3.4% in SMP prices across the two December events, with the December SMP futures contract last settling at US$1695/t.
Prices for rennet casein and buttermilk powder also lifted at this event, up 3.4% and 4.3% respectively. Cheddar prices lost value again, down 3.9%.
The overall GDT Price Index lifted 0.4% supported by the stronger milk powder prices. This is the first time the index has lifted in the past couple of months, having trended down at all of the October and November events.
There were 123 winning bidders, 16 fewer than at the last event. There was 29,514t of product sold.
