Dairy product prices rise, bolstered by whole milk powder
Dairy product prices rose at the GlobalDairyTrade auction, increasing for the third time in seven auctions, amid stronger-than-expected demand for whole milk powder.
The GDT price index rose 0.9% from the previous auction two weeks ago to $US3368. Some 34,117 tonnes of product was sold, up from 33,501 tonnes at the previous auction.
Whole milk powder increased 0.6 % to $US3122 a tonne.
"Price gains [were] recorded in the nearby delivery contract but weaker prices [were] recorded in the later delivery contracts," AgriHQ dairy analyst Susan Kilsby says, referring to whole milk powder.
"The price for regular grade whole milk powder for November delivery fell less than 0.2%," Ms Kilsby says.
"Extra product was added into this contract last week so it was good to see that the market was able to absorb the additional whole milk powder without too much of a negative impact on the price."
"It was surprising to see more product added to the auction given the weak start to New Zealand's milk production season," Ms Kilsby says.
Anhydrous milk fat gained 5.3% to $US6764 a tonne, while butter rose 1.2% to $US6026 a tonne.
Meanwhile, skim milk powder fell 1.2% to $US1920 a tonne, while cheddar declined 1.9% to $US4032 a tonne.
"Skim milk powder pricing remains weak and this is unlikely to change while there is so much stock held in Europe," Ms Kilsby says.
Rennet casein slid 2.4% to $US6036 a tonne, while lactose dropped 3.8% to $US759 a tonne.
Buttermilk powder was not offered at this event.
The New Zealand dollar last traded at 73.20USc at 12.24pm in New York, compared with 72.63USc at 5pm in Wellington yesterday.
There were 134 winning bidders out of 174 participating at the 17-round auction. The number of qualified bidders rose to 539, up from 537 at the previous auction.