Friday, November 16, 2018
 Global Dairy Trade Prices Increase After 13-Year-Low  

Prices at the Fonterra-owned Global Dairy Trade (GDT) auction platform rose  for the first time since March and mark a recovery from the previous auction’s 13-year price low.. The GDT Price Index increased 14.8% at the August 18th auction, with an average selling price of US$1,974 per ton. However, volumes offered were 36,904 tons a drop of 20.7% from the August 4th auction. 


Product prices for anhydrous milk fat (AMF), butter, cheddar, rennet casein, skim milk powder (SMP), and whole milk powder (WMP) all increased, while butter milk powder (BMP) and lactose prices decreased.


Fonterra continues to cut its offerings by 62,930 tons over the next three months, but will add 6,885 tons on later this year in anticipation of changing market conditions.


In a statement issued August 13th, Kelvin Wickham, managing director of global ingredients for Fonterra stated, “In response to current conditions in the global dairy markets, we have further modified our product mix to shift volumes away from base whole milk powder (WMP) and into our other products in our portfolio such as value-add ingredient, consumer and foodservice.”


Eric Meyer, president of Chicago-based risk management, advisory and brokerage firm HighGroundDairy, said it looked like prices had finally bottomed but that he did not expect prices to race higher from here.

"I'm not sure if this is the turning point because supply and demand has not changed," he said. "On the demand side, there is still concern about China and the impact that devaluation may have there," he said.

Meyer said the gain appeared to be more about Fonterra's decision to take product off the GDT platform than any other influence, and he doubted the market was about the make a sharp run higher from here.


Seven sellers – Amul (India), Arla Foods (Denmark), Arla Foods Ingredients (Denmark), DairyAmerica (USA), Euroserum (France), Fonterra (New Zealand) and Murray Gouldburn (Australia) all continue to offer commodity dairy products. Land O’Lakes (USA)  formally withdrew from the auction platform on August 7th two days following the tenth consecutive fall in prices at the August 4th auction. The next auction is scheduled for September 1st.

Source: GlobalDairyTrade


Posted on Thursday, August 20, 2015 (Archive on Thursday, August 27, 2015)
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