Farmers welcome GlobalDairyTrade stabilisation

Farmers welcome GlobalDairyTrade stabilisation

Federated Farmers is pleased to see stabilisation in the latest benchmark GlobalDairyTrade (GDT) online auction result but warns price volatility will likely continue until well into the last quarter.

“It is great to see GDT average still in the US$3,000 a metric ton range but that slight 0.6 percent fall means we are on exactly US$3,000,” says Andrew Hoggard, Federated Farmers Dairy Chairperson.

“It seems to underscore how similar this season is to 2012/13. At a similar point two seasons ago, the average winning price was just US$54 more except it had come up from the high 2,000’s.

“But before anyone traipses back to the beginning of the year to make a more dramatic story, any price before 1 June is completely irrelevant when you are talking about this 2014/15 season.

“Prices will oscillate around for the near term but we understand from various experts that prices are expected to rise in the later half of the season. That’s a reflection of Chinese and Northern Hemisphere production winding down as they close out their main season while we ramp up.

“Prices have been flat to falling because of an awesome global production season in the first half of 2014. This put an extra seven billion litres of internationally traded milk onto the export market and was so voluminous, it could have filled 2,800 Olympic sized swimming pools.

“There are also two critical things to look at in the latest auction result. They are the number of winning bidders as well as the volume of product won.

“We are encouraged to see the latest auction sold the second most volume since January in the old season, while the last four auctions this season have seen a large number of winning bidders.

“As we said after the last auction result, “we saw more buyers and they bought more product so things are looking up, if not the price yet.”

“Whilst this result is pleasing, it is just one result, and the messages to farmers remain the same “play it tight for this season,” Mr Hoggard concluded.

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