Dairy prices levelled off in Fonterra’s latest Global Dairy Trade auction but remain close to the peak reached at the previous auction a fortnight previously.
The GDT price index eased 0.9% to 1579, the second-highest level on record, down from 1593.
Dairy farmers who had seen prices surge in the past five auctions may have been disappointed. But as Westpac senior agri economist Nathan Penny pointed out, uncertainties around global dairy demand arising from surging Covid-19 case numbers in China, the world’s largest dairy market, is likely to have weighed on prices.
Fonterra has steadily raised its forecast payout to the $9.30-$9.90kg/MS range – the highest it has ever been – as the GDT index has climbed 18% this season.
The average price for whole milk powder (WMP), which has the most impact on what farmers are paid, fell 2.1% to US$4596 (NZ$6801) a tonne at the latest auction. On the other hand, skim milk powder, also a key driver of the milk price paid to farmers, rose 1.6% to US$4545/t, the highest level since 2013. Continue reading “World dairy prices ease from record peak but the industry is the big driver of export receipts as trade deficit widens”