Dairy product prices rally, led by milk powder

Dairy product prices rose at the Global Dairy Trade auction, moving higher for the fifth consecutive time.

The GDT price index rallied 6.7 per cent from the previous auction three weeks ago. The average price was US$3,265 a tonne, compared with US$3,057 a tonne three weeks ago. Some 23,326 tonnes of product was sold, down from 27,909 tonnes three weeks ago.

Whole milk powder jumped 8.4 per cent to US$3,027 a tonne.

Offer volumes for whole milk powder were down on the previous event, even though they were up 19 per cent on the previous year, NZX dairy analyst Robert Gibson said in a note.

"Firm demand from Asian countries is likely to have helped to support prices," according to Gibson.

At the latest GDT auction, rennet casein surged 10.9 per cent to US$5,596 a tonne, while anhydrous milk fat climbed 5.8 per cent to US$5,579 a tonne.

Butter rose 4.2 per cent to US$4,445 a tonne, while skim milk powder gained 3.9 per cent to US$2,534 a tonne.

"Skim milk powder offer volumes leading into this event were down on the previous event, but up on the previous year," Gibson noted.

Cheddar added 1.4 per cent to US$3,565 a tonne, while lactose advanced 1.3 per cent to US$1,035 a tonne.

Bucking the trend, butter milk powder declined, sliding 3.1 per cent to US$3,158 a tonne.

The gain in rennet casein was "contrary to the decrease in value at the previous event and likely due to smaller volumes," according to Gibson. Meanwhile, the decline in buttermilk powder "could have been due to a lift in volumes at the event. With relatively smaller quantities of these commodities sold at the event, volume changes can have a bigger impact on prices."

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 68.32 US cents as of 1.42pm in New York, compared with 68.96 US cents at the previous close in Wellington.

There were 106 winning bidders out of 177 participating at the 15-round auction. The number of registered bidders was 529, up from 524 at the previous auction.