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Saturday, December 16, 2017
 Global Dairy Prices Get Lift From Tighter Supply  

Global dairy prices rose during the latest auction held October 18th paring losses from the previous auction earlier this month, and adding to economists’ expectations prices are recovering as supply tightens.

Prices at this latest global dairy trade auction rose 1.4 percent to an average selling price of $2,965 per ton, resuming a two-month rally briefly blemished by a 3 percent fall in the October 4th auction.

Whole milk powder, which makes up the bulk of the auction, rose 2.9 percent. Longer-dated contracts saw the biggest gains.

The latest auction “adds some confidence that most or all of the previous price gains will be maintained,” BNZ Senior Economist Doug Steel stated.

Steel said declining milk production in many key areas around the world had underpinned price gains over recent months, including New Zealand “where far too much rain is denting production in the run up to peak in October.”

Fonterra, the world’s largest dairy exporter and one of the participants in the auction, recently cut back its supply for the auction as wet conditions crimped production.

A total of 31,525 tons was sold at the latest auction, down 7.1 percent from the previous one.

The price gains are feeding farmers’ hopes that the worst is over following a major slump in dairy prices due to China’s economic slowdown and global oversupply.

ASB Senior Rural Economist Nathan Penny said while prices may remain choppy over the coming auctions, New Zealand’s “weak production is largely locked in.”

Auction participants include Fonterra, Amul, Arla Foods, Arla Foods Ingredients, Dairy America, Euroserum and Murray Goulburn. Products traded include whole milk powder, skim milk powder, butter, cheese, and anhydrous milk fat.

Source: Global Dairy Trade


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