Dairy product prices surge to highest since June 2011 in GDT auction as drought weighs
March 6 (BusinessDesk) – Prices of dairy products surged to the highest since June 2011 in Fonterra's latest GlobalDairyTrade auction with the prospect of New Zealand production curtailed by drought in the North Island.
The GDT-TWI Price Index rose 10.4 percent compared to the last sale two weeks ago, the biggest increase since the June 5, 2012, sale and the sixth straight gain. The average winning price rose to US$4,216 a metric tonne, the highest in almost two years. Whole milk powder, the biggest product by volume, led the advance, soaring 18 percent to US$4,298 a tonne.
Economists are already assessing the impact of drought on New Zealand’s economic growth, which is likely to trim the amount of milk powder that Fonterra, the world’s biggest dairy exporter, can ship overseas. The company kept its forecast farmgate milk payout unchanged last month, in in the face of rising prices.
The total volume of dairy products sold at the latest auction was 21,922 tonnes, down from 33,467 tonnes a fortnight ago.
The price of anhydrous milk fat rose 4.9 percent to US$3,820 a tonne and butter milk powder rose 14.3 percent to US$4,200 a tonne. Butter rose 9.6 percent to US$4,081 a tonne and cheddar gained 8.3 percent to US$3,827 a tonne.
Lactose wasn’t offered. Milk protein concentrate climbed 11 percent to US$6,749 a tonne. Rennet casein rose 1.2 percent to US$8,930 a tonne and skim milk powder rose 4.6 percent to US$3,759 a tonne.
There were 105 winning bidders over 16 rounds. There were 200 participating bidders out of a total number of qualified bidders of 782.