International dairy prices
May 2012
Market report from Oceania USDA Marketing Service
Butter markets and prices are weak. AMF price at latest auction fell again dramatically to $2499 US . Production past peak and minimal uncommitted stocks for spot buyers. The NZ price is at $4173/tonne and US price $3200/tonne.
Skim milk powder markets are weak with buying volumes only to near term deals. Auction prices fell again to US $2573 curtailing predictions the market may be about to bottom out. NZ price is at $3700/tonne, US $2837.
Whole milk powder prices are unsettled and weak with production surplus directed to this product but still able to be adsorbed into the market. Caution has affected the market. NZ price at $4010/tonne. Prices fell at auction to $2546 US, which is the lowest level since August 09 in NZ dollar terms at auction.
Cheddar The cheese prices are now weak but stable with sufficent stocks to last for new season. NZ price $4760/tonne. Cheese weaker at auction US $2857/tonne
Medium term weather forecasts seem to be running true with settled conditions returning, and pasture growth still double the average for this time of year, as this stellar production season comes to an end. Dairy forecasts are anything but settled, as the US and Danish Co-Ops record big drops in profits as the world supply growth of milk products surges ahead of global demand. The price falls have dampened the countries investment appetite for dairy and the Pastoral Dairy Investment failed to attract enough capital and the float was withdrawn.
NZ Dairies was placed into receivership as the troubled ownership issues with this plant came to a head, and farmers have been left short of millions of dollars of milk payments until officials can sort out the mess. Receivers report they are well down the track to finding new owners, and it is reported that Chinese interests and Synlait are looking at the proposals.
The globalDairytrade auction with increased volumes of product, attracted prices that were 3 year lows, and have resulted Fonterra reducing this years payout by 30cents. Oceania pricing also reflected falling demand with the Euro zone meltdown and Chinese slowdown being blamed, and the Fonterra 2012/13 payout prediction starts in the $5.95-$6.05 range.
A sharp currency correction and easing interest rates will help compensate for some of the price falls, but farmer’s budgets will need to be severely scrutinized as the new season approaches. Last year’s break even costs have been estimated at $5.73/kgms, so once again those with heavy indebtedness will be nervous of next years projected payout.
- Commodity prices
- Farm cost indexes
- Interest rate trends
- Rural credit aggregates
- Farm sales activity
- International dairy pric
for saleyard and processor price trend graphs, see