Dairy commodity prices continue to lift

There's good news for dairy farmers, with another lift in global dairy commodity prices.

Prices rose by 4.2 percent at the January 15 Global Dairy Trade (GDT) event.

The index has continued to increase since the December 5 GDT event in 2018, which was the first rise in seven months. 

NZX dairy analyst Robert Gibson said prices increased for all commodities except rennet casein, which was down 1.4 percent.

"Overall, the results were in line with the NZX Dairy Derivatives market expectations leading into the event," he said.

Whole milk powder (WMP) prices at the January 15 GDT event lifted 3.0 percent on the previous event to US$2,777/t, while regular grade WMP to ship in February was also up, rising by 3.2 percent. 

Skim milk powder (SMP) prices at January 15 GDT lifted 10.3 percent on the previous event to US$2,405/t with medium heat SMP for February shipping up 12 percent. 

"SMP offer volumes leading into this event were unchanged on the previous event at 4,965t, with the lift in the SMP price index also indicating strong demand side pressures," said Mr Gibson.

Price indices for anhydrous milk fat (AMF) and butter increased 3.2 percent and 4.6 percent respectively. 

Regular grade AMF and unsalted butter to ship in February lifted 18 percent and 19 percent respectively. 

"Ahead of the event, the derivatives market had expected lifts for milk fats, with offer volumes also down for AMF (-6.3 percent) and butter (-10 percent), compared with the previous GDT event."

Rennet casein, which makes up a significantly smaller portion of dairy commodity sales volumes, decreased 1.4 percent at the January 15 event. 

"On average, rennet casein prices have been in decline since the October 2 GDT event in 2018, with this event likely reflecting some lift in volumes sold, which could have placed further downward pressure on prices," Mr Gibson said.