Wednesday, 02 September 2020 09:23

Fonterra sticking to payout despite another GDT price drop

Written by  Sudesh Kissun
Dairy prices have now fallen on the four GDT events since July. Dairy prices have now fallen on the four GDT events since July.

Fonterra is sticking to its 2020-21 season forecast payout range of $5.90 to $6.90/kgMS as dairy prices slipped further in the overnight auction.

Last night’s Global Dairy Trade (GDT) auction saw the price index fall 1% compared to the previous auction. Dairy prices have now fallen on the four GDT events since July.

Whole milk powder price slipped 2% to US$2,884/metric tonne.

In an email to shareholders Fonterra chairman John Monaghan said that the global market was finely balanced at the moment, with both demand and supply increasing but it has the potential to change.

“There is good demand in market at this stage of the season, however, the forecast economic slowdown is likely to increase global unemployment and reduce consumer demand.

“The potential for additional waves of COVID-19 is also impacting the confidence of some of our foodservice customers.”

On the supply side, global milk production has bounced back stronger than expected and volumes in the key dairy production regions of the EU and US are anticipated to be up on last year.

Monaghan says at this early stage of the season, any movement in the market can have a significant impact on the milk price.

“For that reason, we recommend caution with your on-farm financial decisions.”

Key results

AMF index down 0.5%, average price US$3,852/MT

Butter index down 1.2%, average price US$3,334/MT

BMP index up 3.9%, average price US$2,356/MT

Ched index down 0.4%, average price US$3,428/MT

LAC index up 0.8%, average price US$1,314/MT

SMP index up 1.8%, average price US$2,663/MT

SWP index not available, average price not available

WMP index down 2.0%, average price US$2,884/MT

More like this

Prices expected to wax and wane

Expect more of the same as dairy prices on Global Dairy Trade (GDT) broke a two-month drought and posted an increase last week.

Featured

Back the sector that backs NZ

OPINION: The biggest issue currently facing our industry is environmental policy, writes Beef+Lamb NZ chief executive Sam McIvor.

 

National

Machinery & Products

Let aura feed the mob

In a move that appears to have been repeated by many equipment manufacturers, Kuhn confirms it currently working on several…

Battery charger range recharged

Projecta's popular ‘Charge N’ Maintain’ automatic battery charger range has now been recharged – with the introduction of new features…

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Eyes have it

OPINION: Painting eyes on the backsides of cows could save their lives, according to new research by Australian scientists.

Walkers versus cows

OPINION: A North Yorkshire teacher has become at least the second member of the public to be trampled to death…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter