Dairy prices hit six-month high
Source: The DairyNews
Following the latest Global Dairy Trade (GDT) auction overnight, dairy prices are now sitting at their highest since June.
The GDT price index rose 2.3%compared to the previous auction. Whole milk powder (WMP) price was up 2.9% to US$3207/MT. Butter was up 9.9% and cheddar 6.9%.
Kelly Eckhold Westpac’s chief economist in NZ says the WMP price result was in line with their expectations.
“The futures market had pointed to a WMP price rise of around 3% ahead of the auction, and we had also pencilled in a 2.3% rise last week,” says Eckhold.
Prices have now lifted by around 21% since this year’s low in August. Overall prices are now down just 3% on a year ago, 7% below their 5-year average levels and broadly in line with the 10-year average.
Following the lift in dairy prices, Westpac has lifted its forecast milk price for the season to $7.50/kgMS, bringing it in line with Fonterra’s forecast mid-point.
Eckhold says that expectations of reduced production data in NZ and offshore may still be supporting prices.
On the demand side, last night’s auction saw improved demand from China and solid support from Southeast Asian buyers, he noted.
“We remain cautious on prospects for the Chinese economy and associated Chinese dairy demand - recent data confirms ongoing deflation in consumer and producer prices in China.
“Previously, we had seen some upside risks for the milk price outlook given the stronger run of auction outcomes since August.”
Dairy prices have reached a six-month pinnacle following the latest Global Dairy Trade (GDT) auction. The GDT price index witnessed a 2.3% increase compared to the preceding auction, with the price of Whole Milk Powder (WMP) rising by 2.9% to reach US$3207/MT. Butter and cheddar prices also experienced substantial gains, surging by 9.9% and 6.9%, respectively.
Kelly Eckhold, Chief Economist at Westpac in New Zealand, commented that the WMP price outcome aligned with their expectations. She stated, “The futures market had indicated a WMP price rise of approximately 3% before the auction, and we had also projected a 2.3% rise last week.”
Since hitting this year's low in August, prices have soared by approximately 21%. Overall, prices are now only 3% lower than a year ago, 7% below their five-year average, and broadly consistent with the ten-year average.
Following the surge in dairy prices, Westpac has revised its forecast milk price for the season to $7.50/kgMS, aligning it with Fonterra's forecast mid-point. Eckhold suggested that expectations of reduced production data in New Zealand and offshore may still be bolstering prices.
On the demand front, the recent auction revealed an upturn in demand from China and robust support from Southeast Asian buyers. However, Eckhold urged caution, stating, “We remain cautious on prospects for the Chinese economy and associated Chinese dairy demand - recent data confirms ongoing deflation in consumer and producer prices in China. Previously, we had seen some upside risks for the milk price outlook given the stronger run of auction outcomes since August.”
Kelly Eckhold Westpac’s chief economist in NZ says the WMP price result was in line with their expectations.
“The futures market had pointed to a WMP price rise of around 3% ahead of the auction, and we had also pencilled in a 2.3% rise last week,” says Eckhold.
Prices have now lifted by around 21% since this year’s low in August. Overall prices are now down just 3% on a year ago, 7% below their 5-year average levels and broadly in line with the 10-year average.
Following the lift in dairy prices, Westpac has lifted its forecast milk price for the season to $7.50/kgMS, bringing it in line with Fonterra’s forecast mid-point.
Eckhold says that expectations of reduced production data in NZ and offshore may still be supporting prices.
On the demand side, last night’s auction saw improved demand from China and solid support from Southeast Asian buyers, he noted.
“We remain cautious on prospects for the Chinese economy and associated Chinese dairy demand - recent data confirms ongoing deflation in consumer and producer prices in China.
“Previously, we had seen some upside risks for the milk price outlook given the stronger run of auction outcomes since August.”
Dairy prices have reached a six-month pinnacle following the latest Global Dairy Trade (GDT) auction. The GDT price index witnessed a 2.3% increase compared to the preceding auction, with the price of Whole Milk Powder (WMP) rising by 2.9% to reach US$3207/MT. Butter and cheddar prices also experienced substantial gains, surging by 9.9% and 6.9%, respectively.
Kelly Eckhold, Chief Economist at Westpac in New Zealand, commented that the WMP price outcome aligned with their expectations. She stated, “The futures market had indicated a WMP price rise of approximately 3% before the auction, and we had also projected a 2.3% rise last week.”
Since hitting this year's low in August, prices have soared by approximately 21%. Overall, prices are now only 3% lower than a year ago, 7% below their five-year average, and broadly consistent with the ten-year average.
Following the surge in dairy prices, Westpac has revised its forecast milk price for the season to $7.50/kgMS, aligning it with Fonterra's forecast mid-point. Eckhold suggested that expectations of reduced production data in New Zealand and offshore may still be bolstering prices.
On the demand front, the recent auction revealed an upturn in demand from China and robust support from Southeast Asian buyers. However, Eckhold urged caution, stating, “We remain cautious on prospects for the Chinese economy and associated Chinese dairy demand - recent data confirms ongoing deflation in consumer and producer prices in China. Previously, we had seen some upside risks for the milk price outlook given the stronger run of auction outcomes since August.”
