Futures market points to another Global Dairy Trade slump
Latest dairy futures market trading suggests another fall for dairy prices at tomorrow’s Global Dairy Trade auction.
Latest futures trading is pointing to a 10% fall in key whole milk powder prices. According to New Zealand bank ASB, if it sees another price fall at the Global Dairy Trade it will likely revise lower its current season milk price forecast as well as its 2016/17 milk price forecast.
According to ASB, dairy prices fell a sharp 7.2% in USD terms last week, with whole milk powder leading the charge, and falling 11.4% in USD terms.
All remaining components also recorded falls other than casein, which was flat over the week.
Futures foresee 4th fall! WMP prices likely to fall up to 10% @ this wk’s auction; overall may be a little less ^NP pic.twitter.com/KzsemSaiy1
— ASB Markets (@ASBMarkets) February 15, 2016
Dairy product prices decreased by 7.4% at the last Global Dairy Trade (GDT) auction.
This was the third consecutive drop in 2016.
All dairy products recorded declines at the auction, Whole milk powder (WMP) recorded the biggest deficit with a decline of 10.4%.
Butter and butter milk powder (BMP) were also down 8.3% and 6.7% respectively.
Skimmed milk powder (SMP) recorded a drop of 2.2%.
In Europe, dairy prices continue to hover around intervention levels with farmgate milk prices across the EU continuing to be under pressure.
The market returns for Irish dairy products fell again January as dairy markets globally continue in a downward spiral.
The Ornua Purchase Price Index (PPI) the monthly indicator of market returns on dairy products sold by Ornua fell another basis point on December returns to stand at 85.7.
The January return is down some 7% on the same month last year and a massive 35% on returns posted in January 2014.
Last week Ireland offered 1,769t of skimmed milk powder (SMP) into public intervention, the highest amount offered by a country to the measure last week.
This now brings Ireland’s total amount of SMP in the measure to 3,273t for 2016, figures from the Milk Market Observatory (MMO) show.
Ireland began offering product back into the measure in January when it offered 170t of SMP to the intervention and it has steadily continued to offer product since then.