Dairy markets 'taking a breath'
Today's GDT auction marks the end of the strong rally in dairy prices on the platform.
ASB's Nathan Penny talks about dairy prices on NBR Radio and on demand on MyNBR Radio.
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This morning’s 3% dairy price decline at the GlobalDairyTrade (GDT) auction is primarily down to the market “taking a breath,” ASB rural economist Nathan Penny says.
“It’s really just about how far prices have come over the prior four auctions. Whole milk powder, for example, was up more than 80%; that was a massive move,” he says.
Today’s GDT auction marks the end of the strong rally in dairy prices on the platform, with prices increasing by double digits in three of the four prior auctions – with prices up 9.9% two weeks ago.
This morning's GDT average winning price fell to $US2735, down from $US2834 at the last auction. Some 34,519 tonnes of product was sold, down from 35,243 tonnes of product two weeks ago.
Mr Penny says it is likely the dairy price rises which were observed in the previous four auctions won’t again get to that level over the summer.
“[Today’s GDT auction] signals that price rises are going to be more gradual – but nonetheless are still going to be rises,” he says.
“We expect prices over the next few months to grind higher as opposed to the surging prices we had in the four previous auctions."
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Jason Walls
Wed, 21 Oct 2015
Wed, 21 Oct 2015
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Dairy markets 'taking a breath'
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