Wednesday, 22 February 2023 11:57

Butter, cheddar prices surge amid Chinese demand

Written by 

Big jumps in butter and cheddar cheese prices reflect Chinese consumers returning to restaurants, cafes and bakeries, says Westpac’s senior agro economist Nathan Penny.


He says butter and cheddar are key inputs in the restaurant and bakery businesses.


Penny says over time he expects the recovery to broaden into other products, notably whole milk powder (WMP), which is used as the benchmark to set farm gate milk price.


“However, in the short term and as stocks are run down, the price recovery may be stop-start in nature,” Penny says.


He made the comments after last night’s Global Dairy Trade (GDT) auction saw the price index drop 1.5% and WMP prices dip 2%.


However, the biggest mover was butter prices, jumping 3.8%; cheddar was up 1.5%.


Penny points out that butter prices surged by 10.6% over the two February auctions, while cheddar prices are up 5% since the end of 2022.


For February as a whole, prices posted modest gains, with overall prices rising 1.6% and WMP prices lifting 2.1%.


Penny says the latest GDT result was a little below expectations.


“We had pencilled in a 1% WMP price lift ahead of the auction, while the futures market was pointing to a similarly small rise.”


Westpac is sticking to its 2022/23 milk price forecast of $8.75/kgMS.

More like this

Featured

Farmstrong marks 10 years of rural support

Nationwide rural wellbeing programme, Farmstrong recently celebrated its tenth birthday at Fieldays with an event attended by ambassador Sam Whitelock, Farmers Mutual Group (FMG), Farmstrong partners, and government Ministers.

National

Machinery & Products

Farming smarter with technology

The National Fieldays is an annual fixture in the farming calendar: it draws in thousands of farmers, contractors, and industry…

» Latest Print Issues Online

Milking It

110,000 visitors!

OPINION: It's official, Fieldays 2025 clocked 110,000 visitors over the four days.

Sticky situation

OPINION: The Federated Farmers rural advocacy hub at Fieldays has been touted as a great success.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter