Futures markets points to another major rise in Global Dairy Trade

Quotes for dairy products on futures market are pointing towards a bumper Global Dairy Trade auction next week.

There were significant gains on the NZX in recent days with whole milk powder futures August contract gaining US$5 to US$2245 a tonne, September rising US$90 to US$2530 and the October contract rising by US$120 to US$2650.

Meanwhile, November was up US$85 to US$2680, December was up US$100 at US$2700 and January was up US$90 at US$2710.

Last week, dairy product prices rose 6.6% at the Global Dairy Trade auction, after several weeks of flat prices.

The average price paid for dairy product at the event stood at US$2,436/MT with 34,928t of product traded.

The auction saw whole milk powder (WMP) up 9.9% while rennet casein (RenCas) was the main mover, posting a 16.3% increase.

Skimmed milk powder (SMP) posted a small increase of 2.1% and butter prices were up by 6.6%. The only negative price was cheddar, which was down 0.8%.

The three previous Global Dairy Trade auctions all held steady, with two auctions posting no increases or decreases in prices, while the other was down marginally at 0.4%.

The general improvement in EU dairy products’ prices continued last week compared to the previous 4 weeks’ average with prices up 3.9% for cheddar and 3.0% for butter.

Furthermore, spot milk prices increased both in Italy (34 c/kg) and in Netherlands (27.5 c/kg) last week.

In terms of production, indications from the UK are that the July milk supply was 10% back on the previous year, coupled with reductions of between 1.5% and 4% in substantial producers like Germany, France, Poland and Denmark.