The Global Dairy Trade market took a breather in the second April auction, the GDT index increasing by only 0.1%.
To make up the index, anhydrous milk fat prices rose 1.7% and whole milk powder was up 0.4%, but on the downside were cheddar minus 8.5%, mozzarella minus 3.8%, and butter minus 1.4%.
Buying activity was very much subdued, results were in line with analysts’ expectations and both bullish and bearish factors were at play, according to NZX dairy analyst Rosalind Crickett.
“Front of mind for this GDT event was the escalating situation in the Middle East, and the implications for purchasing.
“While the Middle East buyers upped their quantities of WMP, they were down across all other products, lowering their total volume bought, both on the last event and last year,” Crickett said.
Westpac chief economist Kelly Eckhold said not much changed in terms of the mix of buyers in the auction.
“Chinese buyers pulled back a touch, but southeast Asian buyers took up a bit of slack.
“Overall prices remain around long-term averages.”
However, the Westpac forecasts of farmgate milk prices have firmed up.
“Futures markets have generally consolidated, making our $7.90 current season and $8.40 2025 season milk payout forecasts look neutral risk-wise.”
