Farm Ireland

Wednesday 22 November 2017

Global Dairy Trade prices lift a 'touch' but whole milk prices down

Prices are predicted to remain firm.
Prices are predicted to remain firm.
Margaret Donnelly

Margaret Donnelly

The latest Global Dairy Trade auctions results saw overall prices lift a touch, but whole milk prices were back.

Nathan Penny, a Rural Economist with ASB bank in New Zealand said the impact of global demand was beginning to have an impact on prices at the Global Dairy Trade (GDT).

"...this season, we anticipate that demand is going to play a much larger role in determining prices. In fact, that is already the case."

Prices at the GDT were up 0.6pc this week, with butter up 3.3pc, while cheddar was up 14.5pc and skim milk powder was up 7.9pc. However, whole milk powder was down 2.9pc.

Penny went on to say that the drop in whole milk powder prices was expected and that butter prices set a fresh auction record high.

He put the surge in global demand for milk fats down to an acknowledgement by the scientific community that fats are no longer as bad for your health as once feared.

Five out of the seven products monitored by ASB were up, he reported.

The whole milk price (WMP) fall, he said, can be put down to better than expected New Zealand production.

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"Dairy markets had pushed WMP prices around 16pc higher since March, as they factored in the possibly of disrupted New Zealand supply.

"However, if anything New Zealand production has held up; for example, April New Zealand production was 6.8pc higher than in April 2016."

He went on to say that global demand appears firm, in particular, milk fat demand is very high, as indicated by the auction-record high for butter and at the last auction for AMF.

Priced, he predicted will remain firm at or near current levels. In terms of the new season milk price forecast.

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