Last week’s 7% jump in the GDT index was the first real sign of life in the dairy index in months, but it is just the latest signal in a definitive upward swing in global dairy markets. Since early May, prices for butter and cheddar have been rising steadily. Butter quotes from the Dutch dairy board lifted a further 2% this week, to €3,360/t, and are now up almost 40% since the end of April. While butter and cheese quotes have been improving steadily, last week’s GDT was the first positive sign for milk powder prices.Dairy markets have been weighed down by the weakness in milk powders, but the 10% jump in the price of whole milk powder (WMP) at the GDT signals we are in the early stages of a price recovery. In the last week, futures price contracts for WMP have surged 12% as market sentiment for milk powders improves.
Last week’s 7% jump in the GDT index was the first real sign of life in the dairy index in months, but it is just the latest signal in a definitive upward swing in global dairy markets. Since early May, prices for butter and cheddar have been rising steadily. Butter quotes from the Dutch dairy board lifted a further 2% this week, to €3,360/t, and are now up almost 40% since the end of April. While butter and cheese quotes have been improving steadily, last week’s GDT was the first positive sign for milk powder prices.
Dairy markets have been weighed down by the weakness in milk powders, but the 10% jump in the price of whole milk powder (WMP) at the GDT signals we are in the early stages of a price recovery. In the last week, futures price contracts for WMP have surged 12% as market sentiment for milk powders improves.
While WMP prices appear to have turned a corner, skimmed milk powder (SMP) prices are likely to remain variable for some time yet, as huge global stocks continue to overhang the market.
Speaking on New Zealand radio this week, Fonterra chair John Wilson said he expects milk prices to “firm up” over the next six to 12 months, but asked New Zealand farmers to budget on a forecast payout including dividends of $4.65/kg (21c/l) for the 2016/17 milking season ahead.
Similarly, Kerry chief executive Stan McCarthy said he expects a lift in milk prices in early 2017 but warned that expectations need to be tempered.
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