Milk powder prices may reach new heights in 2017
Prices dipped marginally at the Global Dairy Trade auction this week.
Overall prices slipped 0.5%, with Whole Milk Powder (WMP) prices falling 0.8%.
However, according to Rural Economist, Nathan Penny from ASB bank in New Zealand four out of the seven products he monitors posted rises, and SMP prices were unchanged.
“The relative WMP weakness reflects Fonterra’s move to increase its offerings of WMP at the expense of SMP and milkfats.
“This move is not surprising given that WMP is now trading at a premium to SMP of a little under US$1,000/MT.
Looking over the year, Penny highlights that prices have surged, particularly since July.
For example, he says after trading at very low levels over the first half of the year, WMP prices jumped over 76% over the final six months.
“In our view, WMP prices have further to go, and may challenge US$4,000/MT in the New Year.”