Wednesday, October 17, 2018
 Whole Milk Powder Prices Fall to Two-Month Low at GlobalDairyTrade Auction  

Whole milk powder auction prices fell to the lowest in more than two months as higher U.S. production boosted global milk supply and recent high prices curbed demand.

Powder for December delivery fell 2 percent from two weeks earlier, according to a trade-weighted price index calculated by Fonterra Cooperative Group Ltd. after its GlobalDairyTrade auction on October 21st. The average price fell to $3,485 a ton, the lowest since early August and the second decline following a 15-week high set at the Sept. 15 sale.

Fonterra accounts for about 40 percent of the global trade in butter, milk powder and cheese, selling $12 billion of product a year in 140 countries. U.S. milk production climbed 3.3 percent in September from a year earlier to 15.53 billion pounds (7 billion kilograms), the U.S. Department of Agriculture said in a report yesterday.

“An increased volume of U.S. product will enter the global market, the same market that New Zealand and Australian products are entering,” said Susan Kilsby, dairy analyst at NZX Agrifax in Wellington. “Those increased volumes are coming into a market that is showing signs of slight weakening at current high prices.”

Buyers will show “more resistance” as milk trades at historically high prices and supply increases as Australia and New Zealand head toward their peak production season, she said.

Fonterra Payout
Last month Fonterra raised its farmer payout forecast citing rising global prices. There are signs that international dairy supply and demand are “moving more in balance at prevailing prices” amid international market volatility, Chief Executive Officer Andrew Ferrier said in a statement on Sept. 23.

Fonterra sells whole and skim milk powder and dried milk fat at its fortnightly Internet-based auctions. It offers one- month contracts with delivery starting two months after the sale, and two three-month contracts with delivery starting three and six months later.

Whole milk powder for delivery from January through March fell 0.3 percent, Fonterra said. Powder for shipment from April through June declined 0.9 percent. Across all contracts prices fell 1.1 percent.

The winning first-contract price for regular New Zealand whole milk powder, which is the reference point for NZX Ltd.’s futures contract, fell to $3,455. The October futures contract last traded at $3,525 on Oct. 18.

Posted on Monday, October 25, 2010 (Archive on Monday, November 01, 2010)
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