When will global milk production hit a tipping point?
With global milk prices falling, the question is when will key exporting countries reach a tipping point where production starts to dip.
The GDT price index rose 3.2% compared to the previous auction; a strong demand for fat products saw big rise butter and anhydrous milk fat prices.
Surprisingly, the price for Fonterra’s flagship product, whole milk powder- rose 1.3% over the previous auction, despite the market forecasting a 2% drop. WMP price index now sits at US$3312/tonne.
Westpac senior market strategist Imre Speizer says the rise in GDT price index was led by fat products (butter up 11.2%).
“WMP was more subdued, up 1.3% which was slightly above futures prices which implied a 2% fall. The positive outturn has implications for analysts’ forecasts of the milk payout for the next season (2017-18),” he says.
Key Results
AMF index up 8.2%, average price US$6,631/MT
Butter index up 11.2%, average price US$5,479/MT
BMP index up 7.0%, average price US$1,980/MT
Ched index up 0.6%, average price US$3,726/MT
LAC index up 2.0%, average price US$967/MT
RenCas index down 3.7%, average price US$6,259/MT
SMP index up 1.0%, average price US$1,998/MT
WMP index up 1.3%, average price US$3,312/MT
