'Hitting the sweet spot': dairy commodity prices continue upward trend

  • 03/04/2019
'Hitting the sweet spot': dairy commodity prices continue upward trend
Photo credit: Getty

The positive run for international dairy commodity prices has continued with a ninth consecutive rise.

Overall commodity prices rose slightly at the latest Global Dairy Trade (GDT) event on April 2.

Prices were up 0.8 percent, reaching an average price of US$3,483/t.

Average prices lifted for all commodities except Whole Milk Powder (SMP) and Lactose.

Federated Farmers Dairy spokesperson Chris Lewis told Rural Today's Dominic George that the modest rise was very welcome.

"That is a very good run, and starting to hit the sweet spot, and looking promising for next season," he said.

He was hoping it would translate to a rise in forecast payouts from dairy companies.

"Currently they are in the range of between $6.30 and $6.50, so I am hoping that next season could start with a seven."

'Hitting the sweet spot': dairy commodity prices continue upward trend
Photo credit: Supplied

Lewis said the result illustrated the on-going demand for dairy products.

"Dairy is still a healthy option for the Western diet," he said. "Butter is back in vogue as well."

While most commodities had price rises, whole milk powder (WMP) average prices eased on the previous event to US$3,287/t, with the price index down 1.3 percent. 

NZX dairy analyst, Robert Gibson said a drop in consumer demand was behind the drop.

"The decline in overall prices reflects weaker demand across our markets, particularly North Asia, and follows eight consecutive increases in average prices since December 2018," he said.

He said milk fats lifted on the previous event. 

"Anhydrous milkfat (AMF) average prices increased to US$5,867/t, with the price index up 3.7 percent on the previous event. Butter average prices increased to US$5,374/t, with the price index up 5.8 percent on the previous event."

The price index lifted across all contract periods for both commodities.

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