World dairy prices ease from record peak but the industry is the big driver of export receipts as trade deficit widens

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”

A2 Milk has lost  some of its sharemarket  gloss but has  become a formidable  dairy player with a bright outlook

Two  encouraging signals from the  dairy industry this week underlined  its strength  as  the backbone   of the  NZ  export  economy, all the  more vital since  the  Covid-driven collapse  of the international tourist  industry.

First  came  news that prices  strengthened  at the  latest  Fonterra  global dairy  trade  auction, with  the  average price reaching  $US3157  a  tonne. Prices for other products sold were mixed, with gains for butter and skim milk powder, but falls for cheese and other products.

Analysts  said  it  was  positive  to see  good, strong  demand  from   China. The  price  of  wholemilk powder  which  strongly  influences the  level of  payout to Fonterra’s  suppliers  moved  up  1.8% to $US3037  a tonne.

 ANZ agri-economist Susan Kilsby said there had been some concerns that stocks may be building in China, so it was really positive to see good, strong demand from that market for the dairy industry. Continue reading “A2 Milk has lost  some of its sharemarket  gloss but has  become a formidable  dairy player with a bright outlook”