INDEPENDENT NEWS

Dairy product prices fall for third straight GDT auction

Published: Wed 8 Nov 2017 09:52 AM
Dairy product prices fall for third straight GDT auction to 7-month low
By Jonathan Underhill
Nov. 8 (BusinessDesk) - Dairy product prices fell for the third straight time at the latest Global Dairy Trade auction as whole milk powder extended its decline and skim milk powder recovered.
The GDT price index fell 3.5 percent from the previous auction two weeks ago to US$3,105, the lowest since April. Some 35,072 tonnes of product was sold, down from 35,669 tonnes at the previous auction.
Whole milk powder fell 5.5 percent to US$2,852 a tonne.
The auction comes just a week after Fonterra Cooperative Group reiterated its forecast 2017/18 payout of $6.75 per kilogram of milk solids plus earnings per share in a range of 45-to-55 cents at its annual meeting. Chair John Wilson said farmers enjoyed a good season in 2016/17 "after two seasons of unusually low milk prices" although the projection exceeds some analyst forecasts.
"The fall in WMP prices will increase the pressure on milk price forecasts," said Amy Castleton, AgriHQ analyst. "The AgriHQ milk price forecast for the 2017-18 season calculated after the October 17 GDT event was $6.36/kg of milksolids (MS), 39 cents lower than Fonterra’s $6.75/kg MS forecast. The AgriHQ forecast will be revised tomorrow, but will likely decline further.”
She said North Asian buyers bought less product overall at this auction and it is likely that "Chinese buyers have now fulfilled their needs to land milk powder whilst the lower tariff rate applies from 1 January."
Butter fell 3.6 percent to US$5,516 a tonne, matching the direction of November butter futures which had declined yesterday.
Butter demand has soared this year, stoked by a surge in the popularity of natural products in first world markets like the US and Europe. The GDT Butter Price Index hit a record high on Sept. 19.
At the latest GDT auction, rennet casein dropped 4 percent to $5,465 a tonne while skim milk powder rose 1.2 percent to US$1,818 a tonne. Cheddar fell 2.8 percent to US$4,001 a tonne and anhydrous milk fat rose 0.5 percent to US$6,894 a tonne.
Butter milk powder rose 7.2 percent to US$1,931 a tonne and no prices were available for lactose.
There were 133 winning bidders out of 165 participating at the 14-round auction. The number of qualified bidders rose to 554 from 544.
(BusinessDesk)
ends
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Govt raids PGT for $40M top-up to rural broadband roll-out
By: BusinessDesk
Auckland-Chicago named a top 10 ‘most exciting’ new route
By: Air New Zealand
ESR ups its reporting on Meningococcal disease
By: ESR
Game-changing technology for 3D printing tiny structures
By: KiwiNet
PGF to improve regional digital connectivity
By: New Zealand Government
PGF investment in Manawatū-Whanganui
By: New Zealand Government
PGF investment in Advanced Aviation Hub in Whanganui
By: New Zealand Government
PGF investing to expand National Driver Training Centre
By: New Zealand Government
PGF investment to fast track regional freight hub
By: New Zealand Government
$48 million Provincial Growth Fund announcements welcomed
By: Horizons Regional Council
High unemployment drives teen to transform his district
By: Horowhenua District Council
Manawatu-Whanganui PGF spending is just picking winners
By: New Zealand Taxpayers' Union
Meningococcal W – Expert Reaction
By: Science Media Centre
Increased vigilance needed for meningococcal disease
By: Ministry of Health
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media