Auckland, New Zealand—The price index on this week’s semimonthly Global Dairy Trade (GDT) dairy commodity auction increased 1.4 percent from the previous auction, held three weeks ago.
That marked the fourth consecutive increase in the GDT price index. Prior to those four increases, the index didn’t change in October’s first auction, but increased in the three auctions prior to that. Thus, the GDT price index hasn’t declined since the first auction in August.
In this week’s GDT auction, which featured 167 participating bidders and 104 winning bidders, prices were higher for Cheddar cheese, skim milk powder, whole milk powder, butter, anhydrous milkfat, lactose and buttermilk powder.
An average price wasn’t available for sweet whey powder.
Results from this week’s GDT auction, with comparisons to the auction held three weeks ago, were as follows:
Cheddar cheese: The average winning price was $5,220 per metric ton ($2.37 per pound), up 1.0 percent. Average winning prices were: Contract 1 (January), $5,353 per ton, down 4.1 percent; Contract 2 (February), $5,265 per ton, down 0.6 percent; Contract 3 (March), $5,233 per ton, up 3.6 percent; Contract 4 (April), $5,084 per ton, up 1.2 percent; Contract 5 (May), $5,227 per ton, down 2.9 percent; and Contract 6 (June), $5,510 per ton, up 12.3 percent.
Skim milk powder: The average winning price was $3,721 per ton ($1.69 per pound), up 1.3 percent. Average winning prices were: Contract 1, $3,732 per ton, unchanged; Contract 2, $3,699 per ton, up 0.8 percent; Contract 3, $3,709 per ton, up 1.3 percent; Contract 4, $3,776 per ton, up 2.1 percent; and Contract 5, $3,765 per ton, up 3.2 percent.
Whole milk powder: The average winning price was $4,008 per ton ($1.82 per pound), up 0.6 percent. Average winning prices were: Contract 1, $4,025 per ton, up 1.2 percent; Contract 2, $3,991 per ton, up 0.5 percent; Contract 3, $4,011 per ton, up 0.5 percent; Contract 4, $4,009 per ton, down 0.5 percent; and Contract 5, $4,134 per ton, up 1.2 percent.
Butter: The average winning price was $5,791 per ton ($2.63 per pound), up 4.6 percent. Average winning prices were: Contract 1, $5,893 per ton, up 4.9 percent; Contract 2, $5,775 per ton, up 5.1 percent; Contract 3, $5,793 per ton, up 4.1 percent; Contract 4, $5,780 per ton, up 3.6 percent; and Contract 5, $5,775 per ton, up 5.1 percent.
Anhydrous milkfat: The average winning price was $6,668 per ton ($3.02 per pound), up 3.0 percent. Average winning prices were: Contract 1, $6,700 per ton, up 1.3 percent; Contract 2, $6,701 per ton, up 3.4 percent; Contract 3, $6,687 per ton, up 3.0 percent; Contract 4, $6,609 per ton, up 2.2 percent; Contract 5, $6,649 per ton, up 3.8 percent; and Contract 6, $6,630 per ton, up 3.8 percent.
Lactose: The average winning price was $1,339 per ton (60.7 cents per pound), up 3.5 percent. That was for Contract 2.
Buttermilk powder: The average winning price was $3,620 per ton ($1.64 per pound), up 2.9 percent. Average winning prices were: Contract 1, $3,650 per ton, up 1.8 percent; Contract 2, $3,599 per ton, up 3.8 percent; Contract 3, $3,630 per ton, up 0.8 percent; Contract 4, $3,665 per ton, up 2.2 percent; and Contract 5, $3,650 per ton, up 2.0 percent.
ASB Bank noted that, at this point in the New Zealand dairy season, a record-high farmgate price is practically guaranteed and every GDT auction where whole milk prices simply hold onto the gains they’ve already made supports that prospect.
Whole milk powder generally accounts for over half of the total quantity traded on the GDT auctions every year.
There is little to suggest that whole milk powder prices will be correcting in the near future, ASB Bank said.
Most obviously, the WMP contract slope continues to point to prices maintaining momentum from here.
October New Zealand production was softer than anticipated and, while ASB Bank still expects an improvement over the rest of the season, the near-term demand and supply balance will continue to favor sellers.
Relatively soft European Union (EU) dairy exports are a factor here, too.
ASB Bank is retaining its $8.75 per kilogram of milk solids milk price forecast for the season. Last week, Fonterra increased and narrowed its 2021/22 forecast farmgate milk price range to $8.40 to $9.00 per kilogram of milk solids, which increased the midpoint of the range to $8.70 per kilogram of milk solids.
