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.
The Global Dairy Trade (GDT) auction overnight saw the price index slump 7.4%.
But of more concern to farmers will be the 10.9% drop in whole milk powder prices to US$2,548/metric tonne, the lowest in five years.
One year ago, WMP prices were around US$3,733/MT.
But subdued buying from Chinese customers has seen demand wane over the past 12 months.
A slow recovery of China’s food service sector has left Fonterra’s biggest market buying less products on GDT.
Fonterra recently slashed $1 off its forecast milk price range mid-point – from $8/kgMS to $7/kgMS. The latest GDT result means another revision may be on the cards.
GDT results
Global Dairy Trade Event 338 concluded with the GDT Price Index down 7.4%
Key Results
- AMF index down 5.3%, average price US$4,452/MT
- Butter index down 3.0%, average price US$4,539/MT
- BMP index not available, average price not available
- Ched index up 5.8%, average price US$4,127/MT
- LAC not offered
- SMP index down 5.2%, average price US$2,333/MT
- WMP index down 10.9%, average price US$2,548/MT
