Global dairy prices rebound from prolonged winter slump

For dairy farmers waking up to snow yesterday, this morning's lift in the Global Dairy Trade auction is a welcome flip in fortunes.

Strengthened demand led to a 4.9 per cent increase in the overall GDT index - putting a halt to the downward momentum that had seen ten declines in the last 11 auctions.

Whole milk powder (WMP) - which has the biggest influence on Fonterra's farmgate milk price - gained 5.1 per cent to an average US$3610/MT.

Skim milk powder (SMP) - Fonterra's second-biggest reference product - built on a slim 0.1 per cent lift at the previous event, with a 1.5 per cent increase to an average US$3575/MT.

Despite the lift, both products are still commanding well below their March peaks of US$4757/MT for WMP and US$4481/MT for SMP.

Anhydrous Milk Fat stole top billing - leaping 13.9 per cent to an average US$5677/MT, following a 9.8 per cent plunge three weeks ago.

Cheddar remained relatively steady, with a 1.0 per cent lift to an average US$5046/MT.

Butter - which commanded US$7086/MT in March - continued its slow but steady climb back up the value ladder, with a 3.3 per cent increase to an average US$5369/MT.

Butter milk powder - which was not offered three weeks ago - experienced the only slide of the event, falling 5.1 per cent to an average US$3537/MT.

Lactose and sweet whey powder were not offered at this event.

27,127 MT of product was purchased by 112 successful bidders.

On August 26, Fonterra dropped its 2022/23 forecast Farmgate Milk Price range from NZ$8.75-$10.25 per kgMS to NZ$8.50-$10.00 per kgMS.

This reduced the midpoint of the range from NZ$9.50 to NZ$9.25 per kgMS.

The current advance payment rate of NZ$5.70 per kgMS was left unchanged.