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Monday, December 11, 2017
 Dairy Prices Rise While Volumes Drop at Latest GDT Auction  

It seems the steam has come out of the dairy market, with only a small lift in dairy commodity prices during the September 20th Global Dairy Trade (GDT) event. This small increase follows three consecutive sharply higher auctions, up 7.7%, 12.7% and 6.6% respectively.

 

The GDT Price Index lifted 1.7%, and the average selling price was up to US$2975/t – an increase of just US$55/t on the September 6th event. While prices did see a small increase, the volume of product sold dropped 4.5% from the September 6th auction to 35,086 tons.

 

Whole milk powder was down 0.2%, while all other dairy commodity prices registered an increase in prices including a 7.0% gain in butter milk powder. Skimmed milk powder (SMP) was up 3%, while butter prices at the latest auction were up 3.6%.


Analysts said price trends over the next two months - the peak of the New Zealand production season - will be important to determine whether or not the market is recovering after two successive seasons of very weak prices.


Dairy prices - aside from a brief spike higher around this time last year - have been depressed for the last two seasons because of world oversupply - particularly from the European Union - and slack demand from China.


Jon Spainhour, a broker and partner at Chicago-based dairy specialist Rice Dairy, said this auction was a sign that prices are consolidating after a sharp run higher over the last month or so.


"The futures market had priced in higher expectations but I think that if we really look at what happened here, this is still a fairly decent result," he said.


"We have moved significantly higher over the course of the last month and a half. We have gained a lot of ground, especially in whole milk powder," he said.


"We have consolidated at a higher price and that to me is a good sign," he said.


There were a total of 129 winning bidders at the September 20th auction out of the 175 participating. The next auction is scheduled for Tuesday, October 4th.

Source: GlobalDairyTrade and New Zealand Herald

 


Posted on Thursday, September 22, 2016 (Archive on Thursday, September 29, 2016)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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