Wednesday, 21 June 2017 13:08

Fat prices continue record run on GDT

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The overnight GDT auction delivered good and bad news. The overnight GDT auction delivered good and bad news.

Rabobank dairy analyst Emma Higgins says the overnight dairy auction delivered good and bad news.

Global dairy prices have ended a three-month positive run on Global Dairy Trade (GDT); the price index declining for the first time since March.

The GDT price index slipped 0.8% from the previous auction two weeks ago to US$3,434. Some 21,171 tonnes of product was sold, down from 22,004 tonnes at the previous auction.

Starting with the good news, Higgins says fat continue setting record prices.

Anhydrous Milk Fat (AMF) lifted 4.4% to US$6,885/tonne – GDT average price record – while butter gained by 2.9%, with the average price at US$5,768/tonne (again, another GDT record).

Lower milk production from Europe across the peak of the season and less fat stocks, coupled with continued strong demand for milk fats from developed markets, are underpinning these outstanding prices, she says.

On the flipside, cheese prices lost some ground, dropping 3.8% to sit at an average price of US$4,121 /tonne.

Higgins says Europe has been gearing up their cheese production as they work through the spring flush.

Whole milk powder (WMP) price dropped a modest 3.3% to US$3,022 /tonne. Higgins says the result is in line with its forecast.

“It’s not surprising given there is less fresh product available as we move into our seasonal hiatus here in New Zealand over the next couple months. However, we still expect to see increased buying from the Chinese as we move further into the second half of the year.’

Skim milk powder (SMP) moved up a fraction (1.4%) to US$2,218 /tonne. No SMP has been entered into European intervention stores for the third week in a row, providing price support for fresh SMP product.

Key Results

AMF index up 4.4%, average price US$6,885/MT

Butter index up 2.9%, average price US$5,768/MT

BMP not offered

Ched index down 3.8%, average price US$4,121/MT

LAC index down 11.1%, average price US$869/MT

RenCas index down 8.0%, average price US$6,104/MT

SMP index up 1.4%, average price US$2,218/MT

WMP index down 3.3%, average price US$3,022/MT

 

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Chinese moving to higher value dairy

Chinese dairy consumers are increasingly turning to higher value added or premium dairy products, says Sandy Chen, Rabobank’s senior dairy and beverages analyst for Asia.

WMP stands out in auction

Although last week’s GDT price index eased 0.4%, the dairy auction was generally positive, especially the 2.6% lift for whole milk powder (WMP), says ANZ rural economist Con Williams.

 
 

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