Dairy prices got off to a winning start at last night's GlobalDairyTrade auction, where prices rose at their quickest pace in more than a year, lifting hopes of an end to the market doldrums.
Prices at the first auction of the year rose by +3.6% from the previous auction, the biggest increase since December 2013.
It is the first time in 11 months that prices have risen at two successive auctions.
The rises juiced up the New Zealand currency, bolstering its value despite international woes.
There were gains in all products.
However, volumes sold of 33,669 tonnes was the lowest in a year and a half.
Nonetheless, the performance raised expectations that dairy prices, having halved during 2014, may at least have found a floor.
The largest rises were for milk powders, with whole milk powder rising by +1.6% from the previous auction. This increased its unusual discount to skim milk powder, which rose by +2.8%.
Prices of anhydrous milk fat rose by +6.8%.
Butter prices soared by +13.2%.
Cheese prices were up by +3.2%.
Because of similar changes in the exchange rate, these US$ price increases were very similar to the rises in NZ dollars.
Dairy prices
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4 Comments
Very true JB, but it always needed a few auctions of bouncing along the bottom (hopefully) before getting any real upside. But I agree its then going to have to be a big move to make the $4.70 price this season and so that is a real stretch. My thoughts have been that would probably be a surprise to get to that level, but it should assist in getting near to $6 in the following season, and if we can get that, one poor season is more than mangeable for dairy farmers who by and large in my observation have been very conservative in the more recent boom period as compared with say 2006/07.
The ones I know havent exactly been scrooge with their big payout of last season. I think there was a feeling of invincibility...and keep in mind the last two seasons were atrocious for many areas with serious dry weather affecting much of the north island. Production was bought with feed. Now are we heading for another big dry, with a payout that will not cover purchase of feed?
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