Dairy commodity prices have softened as buyers take note of New Zealand’s delayed El Niño drought prospects for milk production in the spring and summer.
The surge in Global Dairy Trade auction results during September and October was partly due to buyers factoring in the drought risk.
“This was overdone, in my opinion, and may explain the pullback in GDT prices during November,” Westpac senior agri economist Nathan Penny said.
He was commenting on the zero movement in the GDT price index in the second fortnightly November event, which followed the 0.7% fall in the first auction for the month.
The latest GDT results included three up and three down, led by lactose up 6.4%, whole milk powder up 1.9% and anhydrous milk fat up 0.9%.
The falls were skim milk powder, down 3.8%, cheddar down 9.7% and butter down 1.1%.
El Niño Watch : El Niño and livestock markets not behaving as normal
Phil Duncan delves into the spring that was and how the ‘broken’ El Niño system has favoured Kiwi farmers. He also explains why some areas are getting so much rain at the moment, and why some weather reports seem far off the mark.
Then special guest AgriHQ senior analyst Mel Croad unpacks the results from November’s Livestock Outlook, the unusual market activity and what to expect if the country does go dry in the new year.