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

Editorial: Time for common sense

OPINION: The case of four Canterbury high country stations facing costly and complex consent hearing processes highlights the dilemma facing the farming sector as the country transitions into a replacement for the Resource Management Act (RMA).

National

DairyNZ Farmers Forum underway

Over 300 farmers and rural professionals have gathered in Hamilton for the first DairyNZ Farmers Forum for this year.

Machinery & Products

Shearing legend hooked on CanAm

Sir David Fagan, world-renowned competitive sheep shearer with 642 shearing titles worldwide and a knighthood to his name, now runs…

50 years of tractor pull

This year, the Fieldays Tractor Pull, in association with PTS Logistics, mark a major milestone – 50 years of crowd-thrilling…

The Wrangler's birthday bash

It's the Wrangler Limited’s 30th birthday and to celebrate the milestone a prototype of the E Series Wrangler - a…

» Latest Print Issues Online

Milking It

Free speech

OPINION: The Free Speech Union is taking this one too far.

Drug survey

OPINION: New national data from The Drug Detection Agency (TDDA), a leading workplace drug tester, shows methamphetamine (meth) use is…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter