Futures market points to rise in dairy prices at today’s Global Dairy Trade
The latest dairy futures market from New Zealand suggests that whole milk powder (WMP) prices at today’s Global Dairy Trade auction could rise between 6-8%.
This could in turn bode well for the overall prices at the Global Dairy Trade after last month’s 3% drop.
Along with a 3% drop in overall prices, WMP prices fell 3.8% at the last auction, however this had been anticipated by the futures market.
Nathan Penny, Rural Economist with ASB Bank said that in view of the recent price surge, it was not surprising dairy markets wanted to catch their breath.
He gave the example of WMP prices, which had spiked 35% over August and September.
Previous to the last negative auction, dairy product prices rose four times in a row, bringing dairy market sentiment back into positive territory.
‘Co-ops are holding back on milk price improvements’
Meanwhile, Irish milk processors have been accused of holding back on milk price improvements for farmers by the ICMSA Dairy Committee Chairman Gerald Quain.
Speaking to Agriland last week, he said that the Ornua PPI now stands at 92.2 which is equivalent to 26.6c/L and that’s based on a 6.5c/L processing cost.
“This, in itself, is an excessive figure in our opinion and one which certain co-ops have confirmed as being below their processing costs.
“The PPI is based on returns from Ornua to member co-ops and, on this basis, a milk price of at least 27c/L is clearly and demonstrably justified.”
This month several Irish co-ops have increased their milk prices, with the average milk price standing at 26c/L, including VAT.