Thursday, 14 May 2020 09:48

Dairy prices ‘hanging in for now’

Written by  David Anderson

Rabobank says NZ dairy prices are “hanging in there” following last week’s Global Dairy trade auction.

This saw the overall price index fall by only 0.8% compared with the auction held a fortnight earlier. Total volumes sold were 20% lower, associated to seasonal declines and within market expectations. 

The NZ dairy sector’s all-important whole milk powder price (WMP) increased by 0.1% to US$2,745/MT compared with the previous GDT. The WMP price was much stronger than the 4% fall indicated by the futures market.

However, prices for butter and AMF took a hit – down 5.8% and 2.4%, respectively.

US-based RaboResearch dairy analyst Tom Bailey says volumes in the last week’s GDT were largely unchanged for both WMP and SMP. 

However, there was an increase in butter and AMF volumes, 42% and 3.5% respectively – which explains their price falls.

Bailey adds that North Asian (primarily Chinese) demand was back, with total product volumes down by 45% compared to the previous GDT. He says increased buying from Southeast Asian and Middle Eastern countries buoyed last week’s auction, with purchased quantities up 46% and 37% respectively, against the prior auction.

However, Bailey has sounded a note of caution about the premiums Oceania product is currently maintaining over the international market. 

“Oceania’s premiums are somewhat alarming,” he says.  “Last week’s prices settled at an average premium of 36% compared to international markets. “Specifically, Oceania butter, SMP, WMP, and Cheddar prices are at 56%, 27%, 13%, and 46% respectively, above the combined average EU and US prices.”

Bailey says these premiums are well above their 2019 comparisons of -3%, 12%, -5%, and 7% respectively. However, it is not unusual for Oceania product to earn price premiums compared to global competitors. 

Bailey says there is also a seasonal component and historically Oceania premiums show a tendency to peak February through April, as the region’s milk volumes slow and its products become scarcer.

More like this

NZ household food waste falls again

Kiwis are wasting less of their food than they were two years ago, and this has been enough to push New Zealand’s total household food waste bill lower, the 2025 Rabobank KiwiHarvest Food Waste survey has found.

Featured

Australia develops first local mRNA FMD vaccine

Foot and Mouth Disease outbreaks could have a detrimental impact on any country's rural sector, as seen in the United Kingdom's 2000 outbreak that saw the compulsory slaughter of over six million animals.

NZ household food waste falls again

Kiwis are wasting less of their food than they were two years ago, and this has been enough to push New Zealand’s total household food waste bill lower, the 2025 Rabobank KiwiHarvest Food Waste survey has found.

Editorial: No joking matter

OPINION: Sir Lockwood Smith has clearly and succinctly defined what academic freedom is all about, the boundaries around it and the responsibility that goes with this privilege.

DairyNZ plantain trials cut nitrate leaching by 26%

DairyNZ says its plantain programme continues to deliver promising results, with new data confirming that modest levels of plantain in pastures reduce nitrogen leaching, offering farmers a practical, science-backed tool to meet environmental goals.

National

Machinery & Products

JDLink Boost for NZ farms

Connectivity is widely recognised as one of the biggest challenges facing farmers, but it is now being overcome through the…

New generation Defender HD11

The all-new 2026 Can-Am Defender HD11 looks likely to raise the bar in the highly competitive side-by-side category.

» Latest Print Issues Online

Milking It

Full cabinet

OPINION: Legislation being drafted to bring back the controversial trade of live animal exports by sea is getting stuck in the…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter