Thursday, March 28, 2024

WMP prices remain static

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The Global Dairy Trade (GDT) index rose 0.3% at last night’s auction, with butter, anhydrous milk fat, skim milk powder (SMP), buttermilk powder and cheddar gaining in price. Whole milk powder (WMP) was steady at an average US$4085/t.
Milk powders had a positive auction, with increases for both whole milk powder and skim milk powder.
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The Global Dairy Trade (GDT) index rose 0.3% at last night’s auction, with butter, anhydrous milk fat, skim milk powder (SMP), buttermilk powder and cheddar gaining in price. Whole milk powder (WMP) was steady at an average US$4085/t.

“Buyers’ appetite to push the price higher was not apparent, with demand much lower at this auction than the last,” NZX dairy analyst Amy Castleton said. 

“This was attested to by lower bidder numbers.

“The volume of WMP offered in contract two (product to ship in June) wasn’t fully committed to, possibly showing signs of demand being fully met. Regular grade WMP to ship in June 2021 did not change in price.”

SMP continued its upward climb, lifting 0.6% and ensuring prices stayed at highest levels since 2014. 

RaboResearch senior analyst Emma Higgins says the results should be read as a good result for New Zealand dairy farmers for a couple of reasons.

“Firstly, WMP prices have remained static in the face of more powder being available to buyers on the GDT than usual for this time of the year,” Higgins said.

“There was less volume for sale in this auction compared to the last GDT event held before Easter (March 16).

“This is as per usual, in line with milk production winding down for the season. Yet despite this, WMP volumes on offer in this auction were 27% higher compared to this time last year. Similarly, SMP volumes were over 20% higher than in April 2020 – and yet prices inched higher.”

Higgins says demand from China remained steady and while some buyers might have taken a step back in the face of high prices, buying appetite is still much stronger than in previous auctions for this time of the year.

“As a region, North Asia (China) bought the majority of the dairy on offer at this auction – as per usual,” she said.

“The interesting part here, is that while the total volume of dairy products bought was less than last month, the volumes were significantly higher compared to the first auction in April 2020 – covid-19 impacted perhaps – and also April 2018 and April 2017.

“Again, this is a pretty good result given the powder volumes available.”

Key Results

AMF index up 0.8%, average price US$6209/MT

Butter index up 2.0%, average price US$5776/MT

BMP index up 17.6%, average price US$3710/MT

Ched index up 2.2%, average price US$4393/MT

LAC index down 6.5%, average price US$1307/MT

SMP index up 0.6%, average price US$3367/MT

WMP index unchanged, average price US$4085/MT

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