Milk Glut Drags Fonterra Forecast Down to $9.20/kgMS
A milk glut around the world shows no sign of easing, putting downward pressure on farmgate milk prices for the next few months.
New Zealand's major export commodity, whole milk powder, received a boost of 5.2%, sending it to US$3233/metric tonne. Since early March, WMP prices have gained 16%.
The overall GDT price index was up 3.6% over the previous auction.
According to MyFarm Investment’s the recent rise came against market expectations.
“Flooding following Cyclone Cook and Cyclone Debbie pushed dairy prices up at the last auction, but commentators who were watching the futures market had predicted prices would flatline at this week's event.
“Prices are now at their highest level this year - after rises of 1.7% on March 21, 1.6% on April 4 and 3.1% on April 18.
“There was a 5.2% increase in whole milk powder (WMP) prices to US$3233 (NZ$4670) a metric tonne. There’s widespread agreement that recent market prices support the forecast final payout of $6/kgMS.”
Full results
AMF index up 4.7%, average price US$6,185/MT
Butter index up 1.1%, average price US$4,911/MT
BMP index up 21.8%, average price US$1,859/MT
Ched index up 4.6%, average price US$3,666/MT
LAC index up 1.1%, average price US$941/MT
RenCas index up 10.4%, average price US$6,775/MT
SMP index down 0.9%, average price US$1,982/MT
WMP index up 5.2%, average price US$3,233/MT
