Dairy prices defy ample supply as market momentum builds
Global dairy prices continue to rise despite ample supply from key milk producing countries including New Zealand.
The overnight Global Dairy Trade auction saw its third consecutive price index rise of over 4%. The price index rose 4.2% compared to the last auction.
Whole milk powder prices, which form the basis of Fonterra’s milk price to farmer suppliers, jumped 4.2% to US$4503/MT – its highest level in over seven years.
The latest rise will put upward pressure on the forecast milk price.
Fonterra is forecasting a milk price range of $8.90 to $9.50/kgMS for this season, with a mid-point of $9.20.
The highest previous milk price paid by Fonterra was $8.40 in 2013-14 season.
Strong gains were also recorded in butter index (5.1%) and skim milk powder (6%).
