GDT: Dairy prices rise for the fourth time in a row

The last four Global Dairy Trade events have been on an upward trajectory. Photo / DairyNZ

Prices have risen for the fourth time in a row in the latest Global Dairy Trade auction, held overnight, with a 4.3 per cent increase across the board.

It follows similar lifts of 4.4 per cent on October 3 and 4.6 per cent on September 19, as well as a 2.7 per cent increase on September 5.

Encouragingly, whole milk powder has surpassed the US$3000 “psychological threshold” again - reaching an average of US$3059/MT, thanks to a 4.2 per cent increase.

Skim milk powder - Fonterra’s second-biggest reference product - gained 4.3 per cent and over US$100/MT from two weeks ago, to command an average of US$2659/MT, while butter firmed 2.9 per cent to an average of US$4940/MT.

The biggest percentage hike came from anhydrous milk fat, which soared 7.1 per cent and over US$330/MT to an average of US$5310/MT.

Lactose - with a slight 0.2 per cent increase to an average of US$5562/MT - and cheddar - also up 0.2 per cent to an average of US$3858/MT - rounded out a clean sweep of positive results for all commodities on offer.

35,974 MT of product was purchased by 117 successful bidders, compared to 38,350 MT and 114 winning bidders last time.

On October 9, Fonterra raised its forecast farmgate milk price for 2023/24 - to a range of $6.50–$8.00 per kgMS, with a midpoint of $7.25.

This followed downgrades on August 18 to between $6.00 and $7.50 per kgMS, with a midpoint of $6.75, and August 4 of between $6.25 to $7.75 per kgMS.

On the strength of last night’s auction, ASB has added another 75c onto its milk price forecast, taking it to $7.35 per kgMS.

Jarden Head of Derivatives, Mike McIntyre said that while the economic situation in China remained difficult, the activity on the GDT platform was “encouraging.”

“[This] is forcing reticent participants into the game.”

He said the lift above US$3000 for whole milk powder “highlights that if the price gets too cheap someone will eventually step in and find a home for the product.”