Dairy product prices fell significantly at the most recent Global Dairy Trade auction.
The event represents the first negative auction for prices in 2015.
Average prices paid at the auction fell 8.8% on the last event held two weeks previously.
- AMF index down 8.4%, average price US$3,877/MT
- Butter index down 9.4%, average price US$3,555/MT
- BMP index down 11.6%, average price US$2,635/MT
- Ched index down 7.4%, average price US$3,130/MT
- LAC not offered
- RenCas index down 15.2%, average price US$7,507/MT
- SMP index down 5.5%, average price US$2,731/MT
- SWP index not available, average price not available
- WMP index down 9.6%, average price US$2,928/MT
Recent auctions have been a much more positive result for dairy products than seen at previous Fonterra auctions held since last summer.
However most dairy market commentators have cautioned that we are still dealing with relatively small quantities of milk being traded in the early months of the year.
For most market observers the big unknown for dairy markets remains the response of the market to the extra milk that is projected to come from Europe once quotas expire.
The Irish Dairy Board’s Purchase Price Index (PPI) rose over 4% last month from 93.1 in January to 97.5 in February.
The Index had been trending downwards for most of 2015 and has turned a corner since the start of the new year with positive returns in both January and February.
According to ICOS this is a further indication of confidence in the market, and is significantly ahead of where the IDB had been guiding before Christmas.
Despite this the February return is still over 26% behind the same month last year and ICOS says that it still suggests a milk price below 30c/L.