Tuesday, 28 May 2019 11:55

No surprise in softer WMP price

Written by  Pam Tipa
Emma Higgins. Emma Higgins.

Softer whole milk powder (WMP) prices are not surprising given China’s strong import activity recently and the steadily increasing WMP pricing, says Rabobank dairy analyst Emma Higgins.

“We have been expecting China’s import growth to seasonally slow, combined with our expectation that inventory pipelines are full,” Higgins told Dairy News. 

She was commenting on the final GDT Event last week for the 2018-19 production season. The GDT price index dropped 1.2% to US$3414/tonne. It ended a good run of 11 positive GDT Events since December 2018, says Higgins.

WMP prices moved lower by just over 2% to US$3180/t.  Skim milk powder saw a small lift of 0.5% to US$2529/t. 

“This was a good result given that more SMP was on offer for this GDT Event by 17% on prior forecasts and the last GDT Event. Oceania SMP prices are leading international prices, with NZ product retaining a premium over both European and US product.” 

Fats dived. AMF results were lower by 1.4% to US$6140/t.  Butter was softer by 3.2%, landing at an average price US$5297/t.  

“Despite this, Oceania butter is still priced ahead of US and EU product. Part of the recalibration of fat prices seen in this GDT Event comes down to the affordability of European product compared to Oceania butter, in particular.

“The other factor is that the northern hemisphere season is well underway, with reports of improved milk flows from earlier in the year….

“We are moving into the quieter months for NZ production and therefore fresh product for the GDT.  Any major price movements over the next GDT Events will be influenced by the urgency of buyers looking to obtain product over NZ’s seasonal hiatus period.”  

She notes EU milk production for March 2019 was higher by 1.1%. This brings total EU milk production for the first quarter 2019 to a small decline of -0.1%  year on year.

BNZ senior economist Doug Steel says the small decline at last week’s event was in line with expectations and “fits with our broader view that prices will drift lower over coming months”.

“Not all prices fell. Cheese bucked the trend with a massive 15.2% gain [from already elevated levels] and casein prices also rose strongly,” he notes.

More like this

Banking on gumboot move

It's a change of scenery, customer and supply chain for Skellerup’s incoming agri division head, Hayley Gourley.

Farmers confidence plummets

Farmer confidence has plummeted in the last quarter, with Government policy cited as the chief reason, says Rabobank.

China still hungry for NZ dairy

Demand for New Zealand dairy products should remain solid despite China’s mixed economic outlook, says Imre Speizer, Westpac.

» The RNG Weather Report

Featured

Vaccinations protect people, animals

As we struggle to fathom how we ended up in the throes of a measles outbreak again, we’re reminded of the importance of vaccinations to protect us from life-threatening diseases.

 

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Lack of interest

The final list of candidates for Fonterra’s board election is out. Surprisingly only one candidate came through the farmer nominated…

DairyNZ poll

Talking about elections, the DairyNZ board election is shaping up to be a much more exciting affair.

 

» Connect with Dairy News