‘One poor result doesn’t have a huge impact on the milk price [but] it will be difficult for prices to recover quickly while there is surplus product available’. – Susan Kilsby, AgriHQ
Dairy product prices dropped markedly at the latest Global Dairy Trade auction, official figures revealed on Tuesday. The GDT Price Index fell 6.3% amid a decrease in skim-milk and whole-milk powder prices. Data showed the price of whole-milk powder, New Zealand’s key commodity export, fell 12.4% to $2,782 per tonne, while the price of skim-milk powder declined 15.5% to $2,118 per tonne. Back in February, Fonterra confirmed its forecast farm gate milk price for 2016-2017 of $6 a kilogram of milk solids amid a rebound in whole-milk powder pricing. Nevertheless, whole-milk powder prices dropped 22.5% since December. Usually at this time of the year offer volumes of dairy products start to decline; however, the recent pick-up in Fonterra’s milk intake is expected to increase the company’s supply of dairy products. Last week, Fonterra lifted 49% skim-milk powder volumes, as well as increased 6% the amount of whole-milk powder available. Analysts reported that the GDT prices at this morning’s auction had been even weaker than the marked initially expected. Anhydrous milk-fat prices fell 0.8%, while prices of cheddar, lactose and casein dropped 4.2%, 4.3% and 6.6%, respectively. However, the price of butter climbed 1.2%, whereas the butter-milk powder price rose 8.4%.