Dairy product prices rebound from five-year low
Dairy product prices rose in the latest GlobalDairyTrade auction, recovering from the lowest level in five years, as gains in anhydrous milk fat and sweet whey powder outweighed declines in rennet casein and butter milk powder. The GDT average winning price rose 1.4 percent to US$2,640, up from US$2,599 two weeks ago. Some 50,816 tonnes of product was sold, down from 55,057 tonnes of product two weeks ago. Some traders had been expecting prices to rise after falling to their lowest since 2009 in the last auction two weeks ago, given prices of other commodities including wheat, corn and sugar have gained this month and the latest auction didn’t fall on a Chinese public holiday. Fonterra has said prices will find a base as global supplies come back into balance and China resumes buying. Even so, the AgriHQ Seasonal Farmgate Milk Price for the 2014-15 season has decreased by 30 cents to $4.75 per kilogram of milksolids following the October 15 GlobalDairyTrade auction. This compares to Fonterra’s current forecast for the season of $5.30/kgMS. The AgriHQ Snapshot Farmgate Milk Price indicates that if the latest GlobalDairyTrade prices were achieved across the entire season the milk price would be just $3.90/kgMS. “The improvement in prices at last night’s auction result is a good start but we need to see a continuation of this upward trend in order to for farmgate milk prices to improve,” AgriHQ dairy analyst Susan Kilsby said in a note. “Despite a higher whole milk powder price the AgriHQ Seasonal Farmgate Milk Price has fallen further as the recovery in dairy commodity prices is now expected to be slower.” In the latest GDT auction, anhydrous milk fat climbed 7.4 percent to US$3,346 a tonne, sweet whey powder advanced 4.3 percent to US$1,225 a tonne, while butter rose 3.9 […]