Middle East demand cushions global dairy price drop at latest GDT auction
The upheaval in the Middle East may have eased the fall in global dairy prices last week.
Expect more of the same as dairy prices on Global Dairy Trade (GDT) broke a two-month drought and posted an increase last week.
The GDT price index rose 3.6% while whole milk powder (WMP) prices rose 3.2% to US$2,985/metric tonne. WMP prices now sit 8.5% below their recent peak in July.
Westpac senior agri analyst Nathan Penny says prices continue “to wax and wane as expected”.
“The pattern of price falls followed by prices rises is in line with what we have been expecting,” he told Rural News.
Covid outbreaks over August and early September put pressure on market confidence and in turn on prices. But as Covid case numbers settle, confidence has returned to dairy markets and prices have stabilised once again.
Penny expects this pattern to continue.
“By and large most key dairy markets (notably China) continue to manage Covid well, but outbreaks are likely to occur from time to time,” he says.
“On the flipside, if the virus surges in key markets, then prices are likely to fall below recent ranges. Stepping back, global dairy demand, particularly from China, continues to underpin dairy prices. We do note though that milk fat prices are softer given their exposure to restaurant and café demand more than other products. On the supply side, global supply growth is relatively contained.”
RaboResearch dairy analyst Thomas Bailey says the price rise signals continued volatility.
But he notes that farmers will be happy with last week’s results.
“The results should support broader increases in prices around the world, boosting profitability for dairy farmers, and eventually resulting in a bump in milk supplies,” he says.
One factor playing on buyers’ minds would be security of supply from New Zealand. A weather calamity in NZ would drive prices higher.
However, ASB senior analyst Chris-Tennent Brown says with good spring weather, data shows production is up on last year.
“We don’t think buyers will be too worried about availability of product from New Zealand over the coming months.
“With that in mind, the WMP prices achieved last week are encouraging.”
Federated Farmers is joining major industry-good bodies in not advocating for the Government to withdraw from the Paris Agreement.
Managing director of Woolover Ltd, David Brown, has put a lot of effort into verifying what seems intuitive, that keeping newborn stock's core temperature stable pays dividends by helping them realise their full genetic potential.
Within the next 10 years, New Zealand agriculture will need to manage its largest-ever intergenerational transfer of wealth, conservatively valued at $150 billion in farming assets.
Boutique Waikato cheese producer Meyer Cheese is investing in a new $3.5 million facility, designed to boost capacity and enhance the company's sustainability credentials.
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
Compensation assistance for farmers impacted by Mycoplama bovis is being wound up.
OPINION: Dust ups between rural media and PR types aren't unheard of but also aren't common, given part of the…
OPINION: The Hound hears from his canine pals in Southland that an individual's derogatory remarks on social media have left…