White gold

Dairy prices reach new heights on drought fears, lower volumes offered, rising demand

Rural News

Dairy prices reach new heights on drought fears, lower volumes offered, rising demand

3rd Apr 13, 7:55am by David Chaston

In the globaldairytrade auction overnight, dairy prices continued their dramatic surge higher.

The volumes sold were only 13,912 MT, half of what it was in the same auction a year ago.

Only a quarter of qualified bidders actually made a bid, in signs buyer resistance is growing.

The GDT index rose 14.2% from the previous auction two weeks ago which itself was up 14.8%.

Since the beginning of 2013, prices are up 54% in US$ terms and up 50.5% in NZ$ terms.

Over the past year they are up by two-thirds in US$ terms and up more than 60% in NZ$ terms.

The gdtindex is at a record high of 1,693.5 although in NZ$ terms it was actually higher in September 2007.

Key results:

AMF index up 6.7%, average price US$4,695/MT
BMP index up 0.8%, average price US$4,595/MT
Butter index down 2.7%, average price US$4,425/MT
Cheddar index up 6.6%, average price US$4,622/MT
RennetCasein index up 4.4%, average price US$9,489/MT
SMP index up 27.8%, average price US$5,142/MT
WMP index up 7.0%, average price US$5,100/MT

Dairy prices

Select chart tabs

Source: GlobalDairyTrade and USDA

Source:

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5 Comments

by powerdownkiwi | 3rd Apr 13, 12:48pm 1364946510

Lemme see............ 7 billion people crowding the planet, all wanting fed (t'is a funny thing, but you cann'ae eat money).

Hmmmmm - and it's not 'white gold', either. It's black gold - point me to one litre that would be produced, processed or profferred, without oil being involved in an essential manner. That goes for the underwrite of any real money used to do the paying.

This is what we will see increasingly more of: bidding in the face of ultimate scarcity. The poor are bidding with their lives, and will drop out first. The irony is that the rich are bidding with debt.

But the average dairy farmer will see this as justification for their own indebtedness. That'll be the limit of the depth of thinking. Maybe they're right. Maybe all numerical wealth representation will inflate away quick-time, when the collective penny drops.

so to speak.

by powerdownkiwi | 3rd Apr 13, 2:28pm 1364952521

Mist - remember Comprehension? From your schooldays?

I didn't say 'they were getting richer'. I merely noted that their outbidding was not underwritten. You could regard eating as getting richer - most species do, and members of ours look decidedly poorly if they don't - but I was just pointing out the irony; that it's all smoke and mirrors.

by powerdownkiwi | 3rd Apr 13, 2:31pm 1364952691

GS - that's one for the 'stupid' bin.

Gold is only a proxy, as is 'legal tender'. Both have been left behind by collapsing civilisations, neither can be eaten.

by steven | 3rd Apr 13, 3:09pm 1364954947

Yes and no or maybe its a maybe.

;]

LOL.

If you agree with Nicole Foss that we will see a huge neg financial event coming first with 75% even 90% losses happening in property and shares then traditionally gold protects your wealth through a catestrophic event like nothing else.

The Q is is that historic safety capability valid through the early stages of whats coming? I mean the decision to buy gold given everything else is hugely bubbled may not be that bad a call, but this is unique. It maybe better to wait in cash (literally in your home safe) until we are at the bottom of this and buy something then. Then maybe as I suspect you think something else is more valuable like skills, tools, usable land, no crystal ball Im afraid.

regards

by Donker | 4th Apr 13, 8:28pm 1365060511

Glad there is some relief for the farmer