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Sunday, December 17, 2017
 Milk Powder Climbs to Record High as Drought Scorches New Zealand  

Whole milk powder climbed to an all-time high as New Zealand’s most widespread drought in at least 30 years curbs supply in the world’s largest exporter, according to Fonterra Cooperative Group Ltd. (FCG)

The GlobalDairyTrade TWI Price Index surged a massive 14.8% compared with the last sale two weeks ago, marking the seventh straight gain for the basket of dairy products. It now sits at its highest point since December 2007.

In particular, the price of whole milk powder - the biggest product by volume - jumped 21% to US$5116 a ton at the auction.

Westpac economist Nathan Penny said that the price increase is due the New Zealand North Island drought, which is slowing milk production and forcing dairy prices upwards.

"The tight supply conditions in New Zealand induced by drought, coupled with improving Asian growth, particularly in China, are providing significant, although temporary, upward pressure on dairy prices" he said.
Westpac economists are now forecasting that total milk production could drop for the first time in five years, with the 2012/2013 season potentially declining as much as 2%.

Earlier this week, Finance Minister Bill English said that the Government has lifted its estimate for the drought impact on the economy to $2 billion, as dairy farmers are drying off their herds earlier than usual and sending livestock for slaughter because of stunted pasture.

The total volume of dairy products sold at the March 19th auction was 15,994 tons, down from 21,922 tons two weeks ago and the smallest since the May 17, 2011, sale.

The price of anhydrous milk fat rose 16.3% to US$4416 a ton and butter milk powder rose 8.6% to US$3904 a ton.

Butter rose 11.5% to US$4550 a ton and cheddar gained 13.7% to US$4315 a ton. Rennet casein rose 3.1% to US$9242 a ton and skim milk powder rose 7.7% to US4050 a ton. This rise is the biggest increase since September 2010, and is the seventh straight rise.

Lactose and milk protein concentrate were not offered. There were 82 winning bidders over 17 rounds. There were 185 participating bidders out of a total number of qualified bidders of 785.
 


Posted on Thursday, March 21, 2013 (Archive on Thursday, March 28, 2013)
Posted by bsutton@adpi.org  Contributed by bsutton@adpi.org
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