Seven-year high for dairy prices at latest GDT auction

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Prices in the latest Global Dairy Trade auction have reached a seven-year high, as Fonterra looks set to pay farmers a record farmgate milk price for the 2021/22 season.

Overnight, the overall index increased 1.4 per cent to exceed the peak recorded in March 2014.

Whole milk powder - which has the biggest influence on Fonterra's payout - lifted 0.6 per cent to once again break the $4K threshold with an average US$4008/MT.

All other products on offer recorded increases, including skim milk powder - Fonterra's second-biggest reference product – which rose 1.3 per cent to an average US$3721/MT.

Butter experienced another healthy lift - increasing 4.6 per cent to an average US$5791/MT.

Meanwhile, lactose rose 3.5 per cent to an average US$1339/MT, but with very little product traded; and anhydrous milk fat added another 3.0 per cent to its balance with an average US$6668/MT.

Butter milk powder was once again traded, recording a 2.9 per cent lift to an average US$3620/MT; while cheddar, which hiked a remarkable 14.1 per cent two events ago, recorded a more sedate 1.0 per cent increase to an average US$5220/MT.

Sweet whey powder was not offered at this event.

The volume traded exceeded 30,000 metric tonnes for the second time this season, with 31,092 sold.

On May 26, Fonterra announced an opening forecast Farmgate Milk Price range for the 2021/22 season of NZD $7.25 - $8.75 per kgMS, with a midpoint of $8.00 per kgMS.

Last week, the co-op lifted and narrowed this to NZD $8.40 - $9.00 per kgMS, with a midpoint of $8.70 per kgMS, which would exceed the previous record payout of $8.40.