Milk Glut Drags Fonterra Forecast Down to $9.20/kgMS
A milk glut around the world shows no sign of easing, putting downward pressure on farmgate milk prices for the next few months.
The GDT price index was down 2.6%, compared to the previous auction, which had seen a 2.7% lift in the price index.
Worryingly for farmers, there was a 1.7% fall in whole milk powder prices. Prices for AMF and butter were also down, falling by more than 5%.
Westpac economists note that although not a large decline, one possible explanation could be China’s weakening of its currency in response to the US-China trade war.
Key results
AMF index down 5.1%, average price US$5,246/MT
Butter index down 5.5%, average price US$4,165/MT
BMP index down 5.6%, average price US$2,405/MT
Ched index down 2.0%, average price US$3,838/MT
LAC index down 11.5%, average price US$767/MT
RenCas index down 1.3%, average price US$6,885/MT
SMP index down 1.6%, average price US$2,482/MT
SWP index not available, average price not available
WMP index down 1.7%, average price US$3,039/MT
