Monday, April 22, 2024

Dairy price movements add up to nought

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Flat result was not unexpected by market.
The value of milk powder, butter and cheese exports increased by $170 million.
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The Global Dairy Trade price index remained unchanged after the second fortnightly June auction, underpinned by whole milk powder prices that were unmoved.

Within the components of the GDT index, falls in skim milk powder and cheddar were balanced by a 5.5% increase for butter.

SMP was down 2.3%, cheddar down 3.3% and anhydrous milk fat up 0.5%.

Before the GDT event, analysts had forecast that prices would fall and so the sideways movement collectively was a good result to help stabilise the farmgate milk price forecasts for farmers.

NZX dairy analyst Alex Winning said the lack of supply/demand fundamentals provided no momentum to the market.

“Prices seem to be bouncing around in a channel, and this auction provides more weight to that.”

The SGX-NZX Dairy Derivatives market beforehand had indicated price reductions in every commodity except AMF.

Winning said the flat result was not unexpected by market participants.

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