Milk prices across several commodities have risen at the latest Global Dairy Trade auction.<\/p>\n
The average price rose almost 2.3% overnight to US$3873(NZ$6597). It followed prices holding steady at the last auction with just a 0.1% price increase two weeks ago.<\/p>\n
In a note, New Zealand Exchange dairy analyst Rosalind Crickett said it was another bullish result for most dairy commodities.<\/p>\n
“Sentiment in the market over the last couple of weeks remains centred around the same thing,” she said.<\/p>\n
“While global milk production may have been strong in the year-to-date out of most regions, record high temperatures in the Northern Hemisphere, paired with the potentially strongest El Ni\u00f1o weather<\/a> on record for the Southern Hemisphere in the months to come, could change the supply side dynamic.”<\/p>\n Adding to this, she said it was a key time for buyers to get orders over the line ahead of the festive season.<\/p>\n The important whole-milk powder price rose 3% to US$3591 (NZ$6116). It was the same for skim milk powder which rose 7.6%, hovering near 12-month highs seen in May this year.<\/p>\n Crickett said this was “in line with expectations” as there were concerns about future milk production.<\/p>\n “While Europe and the US most recent data showed continued growth, reports on the ground are depicting farmers are already starting to dip into winter feed reserves amid drought conditions.”<\/p>\n Butter meanwhile was down 2%, and anhydrous milk fat was down 6%- attributed to ample global supply of milk fats.<\/p>\n Last week Fonterra lifted its 12-month butter volumes forecast by 4.7%, while US butter was production up 8.5% year on year in June and Europe’s rose 5.4% in May.<\/p>\n Crickett said New Zealand milk production figures due out later this week will likely to confirm the year on year growth story, with on-the-ground anecdotes from farmers around the country as pasture conditions remain robust, and with plenty of supplementary feed to go around currently.<\/p>\n