“Results on this occasion exceeded even the NZX dairy team’s and SGX-NZX derivatives market’s own prior bullish expectations,” NZX dairy analyst Rosalind Crickett said.
She said reduced milk supply from Europe was denting production, which was adding to the demand.
“With ongoing trade tensions between the US and Asian economies, and product supply constraints, there is a likelihood that prices will remain firm in the interim.”
The price of whole milk powder, which has the biggest impact on Fonterra‘s farmgate milk price, increased 6.2% to US$4374/MT, the highest since April 2022.
Skim milk powder, Fonterra’s second-biggest reference product, rose 0.5%, to an average of US$2828/MT.
Butter remained in demand as well, with the average price up 3.8% to US$7992/MT, the price for butter milk powder rising 6.2% to an average of US$3060/MT, while cheddar cheese leapt 12.0% to an average of US$5519/MT.
Prices for other products were also strong, with butter prices rising 3.8% to an average of US$7992/MT, anhydrous milk fat up 5.4% to an average of US$7212/MT, and lactose increasing an impressive 16.8% to an average of US$1611/MT.
Mozarella was the only negative result, dipping 0.3% to an average of US$4752/MT.
According to an NZX report, whole milk powder prices are up 24.5% from 12 months ago.
The strength of global prices has supported expectations of record dairy company payouts of at least $10 per kilo of milk solids for the soon-to-end 2024/25 season.
On March 20, Fonterra narrowed its farmgate milk price forecast for the 2024/25 season to between $9.70kgMS - $10.30kgMS, which retained a $10.00kgMS midpoint.
This follows an earlier increase on December 5, when Fonterra’s farmgate milk price forecast lifted to a range between $9.50 and $10.50kgMS, with a midpoint of $10.00kgMS.
The final farmgate milk price for the 2023-2024 season was $7.83kgMS milk solids.
- RNZ
