Thursday, March 28, 2024

GDT lifts whole milk powder price 19.8%

Avatar photo
A whopping leap of 19.8% in the whole milk powder price led a raft of rises for products sold at last night’s GlobalDairyTrade auction.
Reading Time: 2 minutes

The overall GDT price index was up 11.4% to US$3327 a tonne after confirmation of New Zealand’s shrinking milk pool this season.

The big rise in the WMP price took it to US$3317 a tonne. It was the biggest rise for WMP since September last year and took it to its highest price in more than two years.

In other rises skim milk powder was up 5.4% to US$2329, butter was up 4% to US$4146, anhydrous milk fat was up 2.6% to US$5146 and cheddar was up 0.9% to US$3332.

Butter milk powderfell 5.4% to US$2248, lactose was down 4% to US$755 and rennet casein was down 4.8% to US$6025.

In all 27,735 tonnes of products were sold to 107 winning bidders.

Dairy markets had reacted sharply to tightening milk supply in NZ, AgriHQ analyst Susan Kilsby said.

Last week Fonterra cut its milk production forecast for NZ to1460 million kilograms of milksolids in the 2016-17 season – 6.8% below the volume collected last season.

The reduction in milk collections prompted it to offer less product for sale on the GDT platform.

The volume of WMP available was revised down by 4.9% against forecast for last night’s auction.

That left 14,600t of WMP available for bidders across the six delivery periods – 18% less than offered at the previous auction and also 18% less than was on offer in early November last year.

Prices lifted on the NZX Dairy Derivatives market following Fonterra's announcement it would be lowering its GDT offerings because of lower milk intakes.

“But the reaction in WMP Futures prices was nowhere near as large as the reaction at last night's GDT event,” Kilsby said.

Yesterday afternoon the November 2016 WMP Futures contract settled at US$3000/t, indicating a 7.7% lift was expected for the price of regular grade WMP to ship in January.

However it reached US$3255/t on GDT, 17% higher than at the previous auction.

Demand for WMP appeared to spill over into SMP category with its price Index lift of 6.5%.

“The lift in dairy commodity prices will be welcomed by NZ farmers who continue to battle with low returns.

“The cashflow of most NZ farmers will have deteriorated further in recent months as farm expenses typically exceed income levels during the spring. “This positive GDT result will put upward pressure on milk price forecasts,” Kilsby said.

The AgriHQ seasonal milk price forecast will be revised tomorrow morning, once the NZX Dairy Derivatives market has had time to absorb these results.

Total
0
Shares
People are also reading