increase font size
BNZ senior economist Doug Steel.
Dairy prices extended and quickened their ascent at last week’s GDT auction and were stronger than anticipated, says BNZ senior economist Doug Steel.
The GDT Price Index rose a hefty 6.7%, the largest increase of the five consecutive gains. Prices are up a cumulative 18.8% from the late November lows.
Steel says BNZ’s $6.25/kgMS forecast may be a bit low and those forecasting $6/kgMS are likely to revise upwards. The result was stronger than expected, Steel told Dairy News.
“We wondered if demand may be temporarily disrupted by Chinese new year celebrations bringing some price consolidation; not so.
“Indeed demand appears to have strengthened with decent price gains despite more supply.
“The bigger than expected price gains might also reflect some concern about late season NZ milk supply as it becomes drier than usual in some areas.
“This is important at the margin even if NZ milk production for the season as a whole will be well up on last year. More generally, the overarching fundamental of subdued global milk supply continues to underpin price gains, with strong price gains in the major products.”
Whole milk powder prices rose 8.4% to an average price of US$3027/tonne.
“We had $3000/t forecast by May so the gains have come a bit earlier than expected but still along the lines of our broader view,” says Steel.
“It puts upward pressure on Fonterra’s milk price. Our $6.25/kgMS forecast might be a bit low. Those picking $6 are likely to revise their views higher.
“On our calculations, recent auction results support a milk price at least toward the top of Fonterra’s forecast $6 to $6.30 range if not above it.”
Last week’s result at least removes a negative for the Reserve Bank.
“Whole milk powder prices are back above the Bank’s medium-term view of US$3000/t for the first time since June last year. It is another factor arguing against a rate cut.”
Key results
AMF index up 5.8%, average price US$5579/t
butter index up 4.2%, average price US$4445/t
BMP index down 3.1%, average price US$3158/t
Ched index up 1.4%, average price US$3565/t
LAC index up 1.3%, average price US$1035/t
RenCas index up 10.9%, average price US$5596/t
SMP index up 3.9%, average price US$2534/t
SWP index not available, average price not available
WMP index up 8.4%, average price US$3027/t.
Global Dairy Trade (GDT) and Arla Foods have announced that Arla will begin offering European-sourced skim milk powder (SMP) on GDT Pulse from May 2025 as part of an extension to the GDT Pulse pilot.
Dairy and beef farmers could be eligible for lower interest lending options for financing Halter on their farms, with ANZ, ASB and BNZ now offering a pathway to sustainability loans for New Zealand’s largest virtual fencing provider.
A significant rise in Global Dairy Trade (GDT) auction last week has prompted one bank to lift its forecast milk price for the season to above Fonterra's mid-point.
Whole milk powder prices on Global Dairy Trade (GDT) remains above long run averages and a $10/kgMS milk price for the season remains on the card, says ASB senior economist Chris Tennent-Brown.
The first Global Dairy Trade (GDT) auction drew mixed results, with drop in powder prices and lift in butter and cheeses.
Tractor manufacturer and distributor Case IH has announced a new partnership with Meet the Need, the grassroots, farmer-led charity working to tackle food insecurity across New Zealand one meal at a time.
The DairyNZ Farmers Forum is back with three events - in Waikato, Canterbury and Southland.
To celebrate 25 years of the Hugh Williams Memorial Scholarship, Ravensdown caught up with past recipients to see where their careers have taken them, and what the future holds for the industry.
Among this year’s Primary Industry NZ (PINZ) Awards finalists are rural New Zealanders who advocate for pragmatic regulation and support stressed out farmers.
Rockit Global has appointed Ivan Angland as its new chief operating officer as it continues its growth strategy into 2025.
Nominations are now open for the Horticulture New Zealand (HortNZ) board.
OPINION: Last week's announcement of Prime Minister’s new Science and Technology Advisory Council hasn’t gone down too well in the…
OPINION: At its recent annual general meeting, Federated Farmers’ Auckland province called for New Zealand to withdraw from the Paris…
