The good news was running in favour of New Zealand’s meat producers early this week. Today it is running in favour of our dairy farmers.
The first Fonterra global dairy trade auction in three weeks had the most bidders in a year and charted prices on a rising trend, confirming the firm tone at the previous event was not a one-off.
The global dairy trade price index posted its biggest increase since early March, when it jumped 15%.
The key WMP product rose 3.3%, SMP was up 7.3% and both butter and cheese each rose almost 4%. Prices rose 4% overall in USD terms, although they were only up 1.2% in NZD terms, held back by a firming currency.
The average price for WMP was US$3691 (NZ$5200) a tonne, with gains across all contract periods. The average price is sitting 24% higher than at the same time last year. Continue reading “Latest lift in auction prices is an encouraging sign for the fortunes of dairy farmers”
Our dairy provinces are reverberating to the news that prices soared at the latest Fonterra GDT auction. The prosperity this brings to the regions will provide a significant counterbalance to the loss of earning power in the tourism sector because of the pandemic.
The average price at the auction climbed 15% to $US4,231 a tonne but, more importantly, the price for wholemilk powder, which is the key to the payout to farmers,rose an astonishing 21% to $US4,364 a tonne. Butter was up sharply to $US5,826 a tonne, or 13.7%.
Overall, the increase compares with a 3% rise at the previous auction two weeks ago.
The main dairy companies have recently narrowed their forecast payouts to farmers for the current season to above $7 per kilo of milk solids. Continue reading “Dairy price lift will give fillip to regional economies and fortify Fonterra’s confidence in pressing on with capital restructuring”
The New Zealand economy, although battered by the Covid-19 pandemic, has moved into 2021 in better shape than anyone might have predicted just six months ago.
To a degree this has been due to the continuing vibrant performance in the export sector particularly by the primary industries. This week there was a fresh surge of confidence within that sector because of the signal from the big dairy co-op, Fonterra, in lifting its milk payout forecast.
Fonterra now expects to pay farmers between $6.90-$7.50kg/MS. That is up 20c a kg from its previous forecast range of $6.70 -$7.30.
Analysts had seen this coming and as Point of Order has contended in recent posts it is the message the rural regions needed as they made plans for the coming year. Continue reading “Dairy prices and Fonterra’s re-establishment as a global leader should be celebrated far beyond the cowsheds”
Dairy prices increased by 3.9% across the board at the latest Fonterra global auction. The lift followed rises of 1.3% and 4.3% in the December auctions which took dairy prices to their highest level in 11 months, defying those analysts who believed Covid-19 had disrupted dairy markets.
In the latest auction WMP rose 3.1% to $US3,300 a tonne, its highest level in 12 months. Other significant movements included a 7.2% lift in the price for butter to $US4,452 a tonne.
ANZ agricultural economist Susan Kilsby said the auction results came as a great surprise and as a very positive start to the new year. She contends it strengthens the likelihood Fonterra’s milk price payout this season will be closer to the higher end of the range Fonterra is currently forecasting.
The big co-op in December narrowed the range to $6.70/7.30kg/MS.
So what are the chances, if the trend evident in recent GDT auctions continues, of the payout going even higher? Continue reading “Here’s the chance for Fonterra to play a leadership role and spur the others with its milk price”