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Hot Topic Hawke’s Bay
Hot Topic Hawke’s Bay
2 mins to read

Dairy prices rise for fourth auction in a row

Now close to break-even point for most farmers.

Margreet Dietz
Wed, 07 Oct 2015

Dairy product prices climbed in the latest GlobalDairyTrade auction, increasing for a fourth consecutive time after nearly six months of declines.

The GDT average winning prices rallied 9.9% to US$2834, the highest level since March, up from $US2568 at the previous auction three weeks ago. Some 35,243 tonnes of product was sold, down from 36,050 tonnes of product three weeks ago.

The AgriHQ 2015-16 Farmgate Milk Price increased 74c to $5.39 per kilogram milksolids, compared with Fonterra’s 2015-16 milk price forecast of $4.60/kgMS.

“The lift … is primarily driven by market expectations of further gains in dairy commodity prices through the rest of the season,” AgriHQ dairy analyst Susan Kilsby said in a note.

The NZX Dairy Derivatives market indicates whole milk powder prices will reach $US3000 a tonne before the end of 2015 and remain above this level for the remainder of the season.

“This is good news for dairy farmers as $US3000 a tonne is about the price required for most farms to break even,” Ms Kilsby said.

Source: GlobalDairyTrade.info

Butter milk powder jumped 13.8% to $US1945 a tonne, while skim milk powder gained 13.4% to $US2267 a tonne.

Whole milk powder increased 12.9% to $US2,824 a tonne, while anhydrous milk fat climbed 9.9% to $3,763 a tonne.

Lactose added 5.9% to $US524 a tonne, while rennet casein advanced 4.0% to $US6048 a tonne, and cheddar increased 0.5% to $US3234 a tonne.

Butter slipped 2.3% to $US3037 a tonne.

“The outlook for butter is more subdued,” Ms Kilsby noted. “Anhydrous milk fat was previously undervalued when considered on a milk-fat content basis but is now priced similarly to butter.”

The New Zealand dollar last traded at 65.37USc at about 1.32pm in New York, compared with 64.90USc at 5pm in Wellington the previous day.

There were 119 winning bidders out of 180 participating bidders at the 17-round auction. The number of qualified bidders slipped to 635, down from 639 at the last auction.

Quarterly Average Supply and Demand 

(Click to zoom)

 

GDT Price Index – Six month View 

Percentages on the above chart represent the percentage change from the previous trading event. 

(Click to zoom)

(BusinessDesk)

Margreet Dietz
Wed, 07 Oct 2015
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Dairy prices rise for fourth auction in a row
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