New Zealand commodity prices surged 7.4 per cent in March, the third-biggest gain since at least 1986 as drought drove up the price of whole milk powder by almost a quarter. The kiwi dollar price rose even more as the currency gained.
The ANZ Commodity Price index rose 7.4 per cent last month to be within 6 per cent of the all-time record set in April 2011. Ten of the 17 commodities in the index rose in March, five were unchanged and two fell.
Last month Fonterra Cooperative Group lifted its forecast payout to farmers to $5.80 per kilogram of milk solids from an earlier forecast of $5.50, after prices on the GlobalDairyTrade platform rose 27 per cent since February. The worst drought in the North Island in almost seven decades prompted the company to trim its forecast annual milk volume, which will match last season's compared to an earlier forecast 1 per cent gain.
Whole milk powder prices climbed 23 per cent last month, the price index showed, prices for pelts gained 16 per cent, butter rose 15 per cent and skim milk powder gained 11 per cent.
Cheese was up 5 per cent, wool rose 3 per cent, logs gained 2 per cent and lumber, Casein and beef all rose 1 per cent.
Prices of seafood, wood pulp, kiwifruit, apples and venison were unchanged in March while aluminium fell 7 per cent and lamb dropped 1 per cent.
The gains weren't lost on New Zealand producers. The ANZ NZD Commodity Price Index rose 8.7 per cent as the kiwi dollar fell against the US and Australian dollars, nudging the trade-weighted index lower.
The latest GlobalDairyTrade auction is held tonight.