Monday, 25 June 2018 10:15

WMP price falls slightly, butter up

Written by 
Emma Higgins. Emma Higgins.

Dairy prices softened slightly again at last week’s Global Dairy Trade Event but results were again mixed, says Rabobank dairy analyst Emma Higgins. 

Before the auction the prices had been expected to fall. 

The average sale-price index was down by 1.2% (to an average sale price of US$3481/tonne) and follows a fall at the previous event.

The whole milk powder (WMP) index was down 1%, average price US$3189/t, while the butter index was up 0.8%, average price US$5611/t.

“Fonterra had lifted its offer volumes of skim milk powder (SMP) ahead of this event with an extra 200t on offer, and volumes increased over the next 12 months by 6000t.

“Both SMP and WMP prices eased slightly. Butter prices held steady but Oceania prices continue to trade at a discount to European wholesale prices, meanwhile cheddar prices saw the largest declines -- falling 3.6%.

“This is a quiet period with New Zealand milk production largely on hold until August, so another muted auction event is not unusual for this time of year.” 

NZ milk production numbers for May 2018 were released last week. 

The data confirmed a strong finish to the season with 6.2% growth year-on-year in volume (up 5.7% in May on a milk solids basis) versus the prior year. 

“This brings the 2017-18 season into line with the prior year: production is up 0.1% [in tonnes, but on a milk solids basis full-season production is down 0.6%],” says Higgins.

ASB’s senior rural economist Nathan Penny says they suspect the price weakness was driven by a late season rally in production and a stronger US dollar. The US dollar index lifted about 1% since the last auction, making dairy more expensive in most buyers’ local currency terms.

ASB is maintaining its 2018-19 milk price forecast at $6.50/kgMS.

 

More like this

Forecasts steady as demand holds

Banks are mainly holding firm on their forecasts of $7/kgMS despite last week’s flat Global Dairy Trade result – a small decline of 0.4% in the overall price index.

$7 payout still on the cards

Economists are still sticking to a 2019/20 season forecast of around $7/kgMS despite the 3.8% drop in the Global Dairy Trade overall price index last week.

Dairy prices tumble

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

 
 

» The RNG Weather Report

» Latest Print Issues Online

Milking It

No tea, we’re vegan

UK vegans are demanding a law change to ban discrimination against plant-based eaters in workplaces.

Fake cows

Even more fibreglass cows may join those seen ‘grazing’ Morrinsville streets for four years.

» Connect with Dairy News