New Zealand’s dairy futures market is pointing to a significant increase in prices at this week’s Global Dairy Trade Auction.
Current futures trading is suggesting that whole milk powder will rise between as much as 7% at this week’s auction.
Whole Milk Powder (WMP) prices increased by a massive 19% at last months GDT auction the highest price for WMP in almost 12 months.
WMP traded at US$2,695/MT which is the equivalent of 30.51c/L in Irish constituents.
All dairy product prices were positive at last month’s Global Dairy Trade, with skimmed milk powder (SMP) and lactose up 3% and 3.5%.
The last two GDT auctions have outperformed the trade on the futures market indicating a swing in dairy market sentiment back into positive territory.
‘Milk price 30c/L next year’
One of the country’s top dairy bosses, Dairygold’s Jim Woulfe expects the average price of milk to be in the region of 30c/L next year.
The Dairygold CEO said that ‘green shoots’ are appearing in global dairy markets and he expects next year’s milk price to be close to the previous nine-year average price of just over 31c/L.
This would be a considerable improvement on the average price paid to producers during 2016, which currently sits at 23-24c/L.
Woulfe also said that the current dairy market sentiment is going in the right direction.
Speaking at a joint Dairy Information Seminar hosted by Bank of Ireland and Teagasc today, he said that the global dairy markets are beginning to balance, helped by a fall off in milk production.
He told the 100 strong crowd in attendance that the southern hemisphere is a major producer of skimmed milk products and this is likely to fall, mainly due to a reduction in milk supplies from New Zealand, Australia and South America.
Woulfe also said that lower prices have helped to constrain milk production in the European Union, particularly in France and Germany.
All this comes as demand for dairy products on the global stage continues to increase, he said, with demand for dairy expected to rise by 1.7-2% on an annual basis.