June 7, 2012

 

New Zealand's dairy prices back from three-year slump

 

 

New Zealand's dairy prices have recovered from a three-year slump with the return of buyers to the market, posting their largest gain in almost two years, led by skim milk powder and anhydrous milk fat.

 

The GDT-TWI Price Index rose 13.5% compared to the last sale in mid-May.

 

The average winning price rose to US$2,899 per tonne, the highest since April.

 

The price of skim milk powder jumped 21.3% to US$3,011 per tonne. Whole milk powder rose 8.5% to US$2,763 per tonne.

 

The average price at the sales rose for only the third time this year and weakening prices prompted Fonterra last month to cut its forecast 2012 milk pay-out and flag lower payments in 2013.

 

The decline has mirrored a broader trend in commodities amid doubts about global demand.

 

The Thomson Reuters/Jefferies CRB Commodity Index edged up about 0.1% overnight from the lowest in almost two years.

 

Anhydrous milk fat rose 24.4% to US$3,096 per tonne in the latest auction.

 

Cheddar climbed 9.4% to US$3,189 per tonne. Butter milk powder sold at an average US$2,456 a tonne while lactose declined 1.3% to US$1,992 per tonne.

 

Milk protein concentrate rose 10.9% to US$4,339 per tonne. Rennet casein rose 19.6% to US$6,890 per tonne.

 

There were 106 winning bidders over 16 rounds, the longest auction since November last year.

 

There were 170 participating bidders, the highest since the December 6, 2011 sale.

 

The number of qualified bidders rose to 649 from 635.