Global dairy auction ends on positive note for 2018

There was good news for farmers at the final Global Dairy Trade auction of the year, with another increase in prices.

Global dairy commodity prices lifted 1.7 percent overall at the December 18 Global Dairy Trade (GDT) event - the second increase since prices started their decline in May 2018. 

Prices increased for all commodities except Rennet Casein (-2.1 percent).

The whole milk powder (WMP) price index was almost unchanged (+0.3 percent). 

Regular grade WMP to ship in February was also slightly up 0.2 percent on the December 4 auction.

"This result was likely due to higher volumes (+2.3 percent) on offer compared with the previous event, preventing any further increase in price," said NZX Dairy Analyst Robert Gibson.

Price indices for anhydrous milkfat (AMF) and butter increased 4.0 percent and 4.9 percent respectively. 

Regular grade AMF and unsalted butter to ship in February lifted 3.5 percent and 4.7 percent. 

"Ahead of the event, the Derivatives market had expected lifts for milkfats, with offer volumes also down for AMF (-6.7 percent) and butter (-5.9 percent), compared with the previous GDT event," said Mr Gibson.

Skim milk powder (SMP) increased 3.4 percent, with medium heat SMP for February shipping up 3.6 percent on the previous event. 

"This result was in line with NZX Dairy Derivatives market expectations leading into this event, for this grade and contract of WMP," he said.

Mr Gibson said this is likely due to tighter availability of stocks on offer compared with the previous event.