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Dairy prices have now fallen on the four GDT events since July.
Fonterra is sticking to its 2020-21 season forecast payout range of $5.90 to $6.90/kgMS as dairy prices slipped further in the overnight auction.
Last night’s Global Dairy Trade (GDT) auction saw the price index fall 1% compared to the previous auction. Dairy prices have now fallen on the four GDT events since July.
Whole milk powder price slipped 2% to US$2,884/metric tonne.
In an email to shareholders Fonterra chairman John Monaghan said that the global market was finely balanced at the moment, with both demand and supply increasing but it has the potential to change.
“There is good demand in market at this stage of the season, however, the forecast economic slowdown is likely to increase global unemployment and reduce consumer demand.
“The potential for additional waves of COVID-19 is also impacting the confidence of some of our foodservice customers.”
On the supply side, global milk production has bounced back stronger than expected and volumes in the key dairy production regions of the EU and US are anticipated to be up on last year.
Monaghan says at this early stage of the season, any movement in the market can have a significant impact on the milk price.
“For that reason, we recommend caution with your on-farm financial decisions.”
Key results
AMF index down 0.5%, average price US$3,852/MT
Butter index down 1.2%, average price US$3,334/MT
BMP index up 3.9%, average price US$2,356/MT
Ched index down 0.4%, average price US$3,428/MT
LAC index up 0.8%, average price US$1,314/MT
SMP index up 1.8%, average price US$2,663/MT
SWP index not available, average price not available
WMP index down 2.0%, average price US$2,884/MT
Global Dairy Trade (GDT) and Arla Foods have announced that Arla will begin offering European-sourced skim milk powder (SMP) on GDT Pulse from May 2025 as part of an extension to the GDT Pulse pilot.
A significant rise in Global Dairy Trade (GDT) auction last week has prompted one bank to lift its forecast milk price for the season to above Fonterra's mid-point.
Whole milk powder prices on Global Dairy Trade (GDT) remains above long run averages and a $10/kgMS milk price for the season remains on the card, says ASB senior economist Chris Tennent-Brown.
The first Global Dairy Trade (GDT) auction drew mixed results, with drop in powder prices and lift in butter and cheeses.
Weaker milk production in the Northern Hemisphere is keeping dairy prices high.
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