(Australian Associated Press)
Dairy product prices have soared at Fonterra’s GlobalDairyTrade auction amid signs that the worldwide supply glut is easing, bolstering optimism about the outlook.
The GDT price index gained 12.7 per cent with the average price to $US2731 ($A3,548), up from $US2436 at the previous auction two weeks ago. Some 37,766 tonnes of product was sold, up from 34,928 tonnes.
“It was a stunning result and it couldn’t have come at a better time for our farmers,” AgriHQ dairy analyst Susan Kilsby said in a note. “I think it is now safe to say the market has turned a corner.”
Whole milk powder surged 18.9 per cent to $US2695 a tonne.
The derivatives market had anticipated an increase of 11.5 per cent, according to Ms Kilsby.
It was an impressive result, given Fonterra’s offerings of whole milk powder were at their highest level for the season, at 21,500 tonnes, Ms Kilsby said, adding that whole milk powder prices are now 45 per cent above year-ago levels.
“Last year, we saw a similar result with prices lifting at this time of the season only to fall away again in October,” she noted.
“This season I am more confident that prices will be able to hold up as global milk supply is now retracting rather than growing.”
At the GDT auction, butter milk powder jumped 18.1 per cent to $US1983 a tonne, while butter increased 14.1 per cent to $US3274 a tonne.
Cheddar climbed 8.9 per cent to $US3157 a tonne, while anhydrous milk fat gained 8.4 per cent to $US4148 a tonne.
Lactose rose 3.5 per cent to $US763 a tonne, while skim milk powder added three per cent to $US2028 a tonne, and rennet casein rose 2.5 per cent to $US6326 a tonne.
There were 119 winning bidders out of 177 participating bidders at the 17-round auction. The number of qualified bidders rose to 606, up from 605 at the previous auction.