‘The recent very poor weather has raised concerns about production in the near term, and this is likely to have given prices a lift. Although prices remain lower than the levels that we saw in early 2017, they appear to have found a floor.’ – Satish Ranchhod, Westpac Bank
Dairy product prices rose for the third consecutive time at the latest Global Dairy Trade auction held on Wednesday in New Zealand, surprising both analysts and farmers. The GDT Price Index advanced 3.1%, with an average selling price of $3,139 per tonne, after rising 1.6% at the prior auction. As analysts expected, a 50% rebound since mid-2016 was temporary but, however, prices managed to find a strong footing. Moreover, recent flooding events in New Zealand pointed to possible supply shortages. Therefore, dairy product prices are set to rise further. The whole milk price rose 3.5% to $2,998 per tonne, while the skim milk price climbed 7.1% to $2,044 per tonne. The butter price jumped 2.9% to $4,892 per tonne, whereas prices of cheddar surged 6.0% to $3,462 per tonne. The lactose price increased 1.2% to $935. On the negative side, the price of anhydrous milk fat dropped 0.5% to $5,930 per tonne, while the price of rennet casein fell 3.8% to $6,020. A total of 22,927 tonnes was sold at the Wednesday auction, up 1.3% from the preceding auction. Since the dairy sector accounts for about 7% of New Zealand’s Gross Domestic Product, the Kiwi is expected to trade higher during today’s session. The GDT auction ias owned by New Zealand’s dairy processor Fonterra.
