Average prices of dairy products fell for the sixth straight sale in Fonterra Cooperative Group’s latest online auction, reaching the lowest level in 10 months.
The GDT-TWI Price Index fell 1.4% to US$3,580 a metric tonne, according to results posted on the globalDairyTrade auction website. Whole milk powder fell to its lowest level since August last year.
Milk powder prices have declined 16% from their peak in March, based on the ANZ Commodity Price Index and last week Fonterra confirmed its forecast for a decline in payments to farmers for the 2012 season, after what is expected to be a record payout for 2011.
The company first flagged the payment drop in May and chairman Henry van der Heyden said last week that it is sticking to the forecast even in the face
of “volatile economic and market conditions.”
Whole milk powder fell an average 1.6% to US$3,314 a tonne in the latest sale. Skim milk powder rose 0.3% to US$3,444 a tonne. Anhydrous milk fat rose 2% to US$4,353 a tonne and milk protein concentrate rose 4.9% to US$6,263 a tonne.
Rennet casein fell gained 0.9% to US$9,547 a tonne. Butter milk powder dropped 12% to US$2,988 a tonne.
There were 128 winning bidders from 166 participants over 11 rounds. The platform has 387 qualified bidders, up from 355 at the last auction.
(BusinessDesk)
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6 Comments
Keep up the positive spin BusinessDesk.
GlobalDairyTrade prices (USD) reached a peak on the 1st of March this year. Then the NZD:USD rate was at 0.7533 (RBNZ) which also gives the same exchange rate for the 6th September as 0.8280.
From globalDairytrade data, comparing values from the 1st of March to the 6th September (with the percentage change in brackets):
In USD prices
Weighted average price, all products: 4,826 : 3,580 (-26%)
Weighted average price all WMP products: 4,619 : 3,314 (-28%)
Contract1 (spot) WMP: 4,958 : 3,235 (-35%)
Prices in NZD (converted from USD at RBNZ's rate for the respective days)
Weighted average price, all products: 6,406 : 4,324 (-32%)
Weighted average price all WMP products: 6,132 : 4,002 (-35%)
Contract1 (spot) WMP: 6,582 : 3,907 (-40%)
A downward revision would not be a surprise. Let's face it this prediction is less than the just completed season anyway. The farmers I know who are not in a financial bind, are all budgeting on $4.50-$5kgms but are more than happy to have the higher payout and for it to continue in the meantime. You may be surprised at the extent of the cash holdings of some of them. If 20% of farmers are in strife, it means that 80% are doing ok.
Welcome home CO. Its nice to read some glass half full stuff within the mire of negativity.
The tone of comments on this site which are urban dominated, do not reflect the sense of optimism that is prevalent in rural NZ at the moment. I genuinely cannot recall a time when theres been such universal positivity. Hopefully it will flow through to our urban cousins shortly!
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