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Sunday, December 17, 2017
 Global Dairy Prices Rise as Volumes Decline at GlobalDairyTrade Auction  

A rise in global dairy prices offers tentative evidence they may have bottomed out, but any recovery will be gradual and will unlikely offer immediate relief to farmers angry about cuts to the farmgate prices.

 

The May 17th Global Dairy Trade auction prices climbed 2.6 percent to an average selling price of $2,283 per ton, although that came on the back of low offer volumes. In total, there were 155 bidders offering 18,113 tons of product, the lowest amount in three years.

 

Butter Milk Powder posted the highest increase, with the index up 16.2% followed by Anhydrous Milk Fat with an increase of 4.9% while Whole Milk Powder was up only 3.0%.

 

Only two products at auction saw a decrease in price - Skimmed Milk Powder was down 0.9%, while Cheddar prices dropped 0.8%.

 

New Zealand and Australia dairy farmers have been hit hard by dairy prices that have plunged nearly 60 percent since early 2014, dragged down by swelling global supply.

 

An estimated 85 percent of dairy farmers in New Zealand are operating at below break-even levels, while in Australia there has been outcry from farmers after New Zealand dairy co-operative Fonterra and the listed arm of Australia’s biggest milk processor Murray Goulburn cut farm gate prices by up to 15 percent in the past few weeks.

 

Analysts noted that much of the auction’s rise came from volumes dropping 12.1 percent to 18,113 tons.

 

“The GDT result last night was positive with the market now heading in the right direction, but the result was off low volumes,” said AgriHQ dairy analyst Susan Kilsby in a research note. She said the amount of whole milk powder on offer – the main product in the auction – was the lowest in more than three years.

 

“Hopefully the market can sustain this positive direction as offer volumes start to increase in the coming months,” she added.

 

ASB Rural Economist Nathan Penny said the improving global prices didn’t change the outlook for the milk market. “The volumes at this auction were very low and hence make little difference to either this or next season’s milk price,” said Penny.


The Global Dairy Trade auctions are held twice a month with the next one scheduled for June 1.


Source: GlobalDairyTrade & 
Bullvine


Posted on Friday, May 20, 2016 (Archive on Friday, May 27, 2016)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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