Bank helps clients reduce emissions
Rabobank says climate change creates both risks and opportunities for the bank and its clients and that the food and agriculture sector needs to recognise the potential for both.
“A super start to spring” is how Rabobank dairy analyst Emma Higgins describes the third consecutive significant rise on the Global Dairy Trade (GDT) event platform.
The GDT price index rose 7.7% with the average price US$2920/MT over 14 rounds. The all-important whole milk powder (WMP) index was up a more modest 3.7% with an average price of US$2793/MT.
“There were more bidders this time around: 199 bidders in this event compared to 177 in the prior event – a sign that the prospect of increased prices has flushed out more buyers looking to fill inventory pipelines before commodity prices move higher,” Higgins told Dairy News.
On the supply front, news of less milk available around the globe continues, Higgins says.
“The cut in European milk production has carried on into June and July and a drastic reduction in milk production in South America, along with a similar prospect in Australia, continues to support our view that the global exportable milk surplus will continue to tighten in 2016.”
This short-term coverage demand, combined with slowing global production, has translated into all dairy categories improving in the latest GDT event, Higgins says.
“This time around WMP lifted the least in this event at just +3.7% (US$2793/MT) compared to butter at almost +15% (US$3764/MT). SMP lifted a significant 10%, realigning Oceania prices with European SMP prices.”
ASB senior rural economist Nathan Penny says the dairy price correction in August and now September has been swift and large.
“For now, we expect prices to consolidate over coming auctions as markets will need to take a breath,” Penny says.
“For example, the relatively flat prices across the different WMP contracts hints that that may now be the case. However, we expect continued production weakness to lift prices again later in the season.”
Penny says NZ spring data, as it comes through, will support or challenge the view that global production will weaken further.
“Also, with EU’s production now also clearly on the wane, we expect the wedge between NZ-dominated products (WMP) and EU-dominated ones (SMP) to narrow. For example, June EU production data showed a 1.6% fall compared to June 2015.”
Senior economist Anne Boniface says in her agri update that, unlike recent auctions, the increase wasn’t driven by WMP. Instead SMP and anhydrous milk fat (AMF) prices rose 10% and 15.4% respectively while WMP lagged.
“That’s a bit weaker than the 8% or so lift the futures market had been pointing to,” she says.
The recently confirmed support from the European Commission to subsidise the region’s dairy farmers will have helped support SMP prices, Boniface says.
EU milk production is expected to be dampened further by the €500m payment to European farmers, including €150m for reducing milk production and extending private storage. If fully utilised, the payments for reducing milk production would lead to a 1.1 million tonne reduction in supply.
Boniface says fundamentals have moved in favour of dairy producers over the last month or so, with improved demand coinciding with lower milk supply from key global exporters.
South Waikato farm manager Ben Purua’s amazing transformation from gang life to milking cows was rewarded with the Ahuwhenua Young Maori Farmer award last night.
Bankers have been making record profits in the last few years, but those aren’t the only records they’ve been breaking, says Federated Farmers vice president Richard McIntyre.
The 2023-24 season has been a roller coaster ride for Waikato dairy farmers, according to Federated Farmers dairy section chair, Mathew Zonderop.
Ministry for Primary Industries (MPI) director general Ray Smith says job cuts announced this morning will not impact the way the Ministry is organised or merge business units.
Scales Corporation is acquiring a number of orchard assets from Bostock Group.
Family and solidarity shone through at the 75 years of Ferdon sale in Otorohanga last month.
OPINION: Scientists claim to have found a new way to make a substitute for cow's milk that could have a…
OPINION: The Irish have come up with a novel way to measure cow belching, which is said to account for…