World dairy prices firmed at the latest GlobalDairyTrade auction, the GDT price index gaining 1.4 per cent and ending a four-sale losing streak.
Wholemilk powder prices, which are a key component of Fonterra's farmgate milk price, rose by 5.5 per cent to US$1974 a tonne. Another important product, skim milk powder, gained by 1.3 per cent to US$1802 a tonne. Firm whole milk and skim milk powder prices will be supportive for Fonterra 's farmgate milk price forecast for this season of $4.15 a kg of milksolids - which is still short of an estimated break-even point of $5.25 a kg.
The start of a trend?
It's too early to say if this morning's auction signals a reversal of the downward trend that has plagued the market so far this year and for much of last year. A sustained price recovery looks to be some way off.