Dairy product prices dip for first time in five auctions
Tempered outlook.
ASB's Nathan Penny talks about dairy prices on NBR Radio and on demand on MyNBR Radio.
What's the story behind the story? Click the NBR Radio box for on-demand special feature audio.
See also: Dairy markets 'taking a breath'
Dairy product prices slipped in the latest GlobalDairyTrade auction, declining for the first time in five auctions, tempering expectations about the outlook.
The GDT average winning prices fell 3.1% to $US2735, down from $US2834, which marked the highest level since March, at the previous auction two weeks ago. Some 34,519 tonnes of product was sold, down from 35,243 tonnes of product two weeks ago.
The AgriHQ 2015-16 Farmgate Milk Price decreased 13c to $5.26 per kilogram milksolids, compared with Fonterra's 2015-16 milk price forecast of $4.60/kgMS.
"The slowdown in the recovery of the dairy markets will be disappointing for dairy farmers whose cashflows have been squeezed by two seasons of low milk prices," AgriHQ dairy analyst Susan Kilsby said in a note.
Two weeks ago, New Zealand dairy futures showed expectations whole milk powder would climb to $US3000 a tonne by the end of 2015 but this price now is not expected to be achieved until May 2016.
"While the market had generally eased, the results of the latest GDT auction still came as a surprise," Ms Kilsby noted. "The NZX Dairy Derivatives market had predicted both whole milk powder and skim milk powder prices would lift again" at this auction.
Butter sank 11.1% to $US2850 a tonne, while whole milk powder dropped 4.6% to $US2694 a tonne. Skim milk powder fell 4.5% to $US2178 a tonne, while lactose retreated 3.8% to $US507 a tonne, and cheddar declined 2.2% to $US3163 a tonne.
Rennet casein gained 2.1% to $US6178 a tonne, anhydrous milk fat increased 2.4% to $US3856 a tonne, while butter milk powder added 3.2% to $US2064 a tonne.
The New Zealand dollar last traded at 67.55USc at about 1.05pm in New York, compared with 67.91USc at 5pm in Wellington the previous day.
There were 127 winning bidders out of 163 participating bidders at the 12-round auction. The number of qualified bidders rose to 639, up from 635 at the last auction.
(BusinessDesk)
What's the story behind the story? Click the NBR Radio box for on-demand special feature audio.
Margreet Dietz
Wed, 21 Oct 2015
Wed, 21 Oct 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Dairy product prices dip for first time in five auctions
52674