Wednesday, 04 July 2018 08:39

Dairy prices tumble

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Dairy prices tumbled overnight. Dairy prices tumbled overnight.

Dairy prices have tumbled in the latest Global Dairy Trade (GDT) auction.

The GDT price index dropped 5% compared to the previous auction.

Surprisingly, whole milk powder prices dropped a whopping 7.3% to US$2905/MT.

According to Westpac head of NZ Strategy Imre Speizer, last night’s GDT result was “a decent surprise relative to futures market predictions of a 1% fall”. 

“One reason could be trade war fears, with local production increases a weaker secondary explanation,” he says.

Key results

AMF index down 1.7%, average price US$5,937/MT

Butter index down 4.0%, average price US$5,390/MT

BMP index up 6.4%, average price US$2,480/MT

Ched index down 4.3%, average price US$3,713/MT

LAC index not available, average price not available

RenCas index up 3.6%, average price US$5,089/MT

SMP index down 4.6%, average price US$1,913/MT

SWP index not available, average price not available

WMP index down 7.3%, average price US$2,905/MT

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$7-plus still on the cards

Despite four consecutive drops in Global Dairy Trade (GDT) prices, analysts are sticking with a payout of around $7.20/kgMS for this season.

Is China back?

There was a silver lining to the fourth straight drop in global dairy prices last week: demand in China is recovering.

Dairy fundamentals looking good

Independent economist Cameron Bagrie says dairy fundamentals are looking pretty good, despite the GDT dropping in the past three auctions.

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