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Dairy product prices advance less than expected

Dairy product prices moved higher at the Global Dairy Trade auction, rising for the sixth straight time, though gains were less than expected.

The GDT price index rose 0.9 percent from the previous auction two weeks ago. The average price was US$3,271 a tonne, compared with US$3,265 a tonne two weeks ago. Some 25,324 tonnes of product was sold, up from 23,326 tonnes two weeks ago.

“Overall, while the direction of change was in line with the NZX Dairy Derivatives market expectations leading into the event, the final results were not as bullish as expected,” NZX dairy analyst Robert Gibson said in a note.

Whole milk powder eked out a 0.3 percent advance to US$3,022 a tonne.

“The increase in volumes available is likely to have moderated any further lift in whole milk powder prices,” said Gibson.

At the latest GDT auction, cheddar climbed 2.9 percent to US$3,667 a tonne, while skim milk powder increased 2.8 percent to US$2,580 a tonne.

“Despite a lift in volumes, prices continued to increase which indicates strong demand side pressure for skim milk powder,” Gibson noted.

Rennet casein gained 2.7 percent to US$5,740 a tonne, while butter rose 1.2 percent to US$4,495 a tonne, and anhydrous milk fat inched 0.7 percent higher to US$5,620 a tonne.

Meanwhile, lactose dropped 2.9 percent to US$998 a tonne.

Butter milk powder was not offered at this event.

For sweet whey powder, no product was offered or sold, or no price was published for the last event, or on both of the two previous events.  

The New Zealand dollar last traded at 68.82 US cents as of 1.20pm in New York, compared with 68.48 US cents at the previous close in Wellington.

There were 120 winning bidders out of 169 participating at the 14-round auction. The number of registered bidders was 513, down from 529 at the previous auction.

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