The most recent Fonterra dairy products auction, held on Tuesday of this week, showed a 4.0% decrease in the overall auction index. An increase in the forecasted volumes offered for Anhydrous Milk Fat (AMF) and powders may have contributed to the fall in the average winning prices recorded for most of the major dairy commodities. Butter and cheese were up by 3.9% and 0.7% respectively.
The average price for all products across all contracts now stands at US$4,794/tonne. As a consequence, the gDT TWI (Global Dairy Trade-Trade Weighted Index) shows a 4.0% decrease compared to the previous auction, held a fortnight ago.
Significantly, he average butter price was up 3.9% on the last auction, to $4,746. Whole Milk Powder (WMP) averaged $4,703/tonne across all contracts, that’s down 5.7% on the last auction. The weighted Skimmed Milk Powder (SMP) prices were down 3.9% from the previous auction, at $4,586/tonne.
The price for Cheese was up 0.7% on the last auction, at $4,837/tonne while AMF returns decreased by 3.5% on the previous auction, to an average of $5,126/tonne. Prices for Casein averaged $11,791/tonne, down 2.9% from the previous auction.
From an Irish perspective the increase in butter prices will be welcome news. This reverses the downturn recorded at the last trading event. Irish dairies export significant tonnages throughout the year. The recorded consolidation in cheese prices will also come as good news to Irish milk processers.
Sources within the Irish dairy industry have indicated to AgriLand that farmgate milk prices should remain reasonably steady over the coming summer months. New Zealand milk output has been hit by a spell of very dry weather over recent weeks.
Meanwhile in Europe spot raw milk prices in the Netherlands averaged 38.06 Euros per 10 kilos of milk. This was down 1.65% on the previous month. Prices peaked at 49.56 Euros last November
The next Fonterra auction is due to take place on Tuesday 18 March 2014.