Wednesday 17th December 2014
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Dairy product prices rose in the latest GlobalDairyTrade auction, propelled by a jump in anhydrous milk fat and butter.
The GDT average winning price rose 2.4 percent to US$2,609, up from US$2,513, the lowest level since August 2009, two weeks ago. Some 35,390 tonnes of product was sold, down from 39,273 tonnes of product two weeks ago.
Even so, the AgriHQ Seasonal Farmgate Milk Price for the 2014-15 season dropped 5 cents to $4.20 per kilogram milksolids, which is comparable with Fonterra’s current forecast for the season of $4.70/kgMS.
The AgriHQ Snapshot Farmgate Milk Price indicates that if the latest GlobalDairyTrade prices were achieved across the entire season this would equate to a milk price of $3.90/kgMS, a 25 cent increase from the previous auction.
“As prices on the NZX Dairy Futures market have receded in the past fortnight, our forecast for the entire season has actually dropped by 5 cents,” AgriHQ dairy analyst Susan Kilsby said in a note. “It is too early to say whether this positive price trend delivered by GDT will continue into 2015.”
Fonterra has offered lower volumes of dairy products on GDT this season than they have in previous seasons. Ahead of the latest auction they reduced the volume of whole milk powder on offer particularly for the contracts with the nearer delivery dates. The auction results indicate that the lower volumes offered were more closely aligned with buyer demand, according to Kilsby.
Last week Fonterra suggested milk supply is expected to tighten, which may have also prompted some additional buyer activity at this auction, Kilsby noted.
Anhydrous milk fat climbed 10.8 percent to US$4,200 a tonne, while butter gained 10.4 percent to US$3,145 a tonne. Rennet casein increased 4.5 percent to US$7,576 a tonne, and whole milk powder added 1.4 percent to US$2,270 a tonne.
Cheddar slipped 0.6 percent to US$3,002 a tonne, while skim milk powder fell 3.2 percent to US$2,320 a tonne, and butter milk powder dropped 9.5 percent to US$2,466.
Sweet whey powder was not offered, not sold, or sold at its starting price in either the current event and/or in the prior two events.
Lactose was not offered at the latest event.
The New Zealand dollar traded as high as 78.49 US cents at about 7:25am in New York, and traded at 77.90 US cents at about 12:20pm in New York, up 0.6 percent from the previous day.
There were 126 winning bidders out of 176 participating bidders at the 14-round auction. The number of qualified bidders fell to 667, from 689 at the last auction.
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