Fifth consecutive rise for Global Dairy Trade auction index

Wednesday, 20 November 2019

by Kat Jack

The overall price index rose 1.7% at the latest Global Dairy Trade (GDT) event. This is the fifth consecutive rise for the New Zealand based dairy commodity auction. WMP and SMP, which make up the bulk of volumes sold, rose 2.2% and 3.3% respectively. Cheddar was up 2.5%, while the butter price index was down 1.3%.

After being on a slightly downwards trend through the middle of the year, the WMP and All Products price indexes are back to levels seen in April 2019. SMP has exceeded this and has been on a strong upwards trend over the last two months. Following a price spike earlier in the year, butter prices are currently more subdued.  

On the 22 October Fonterra increased their forecasted farmgate milk price to NZD $6.55-$7.55 per kg solids. This price is linked to the GDT, and at the time of the increase the GDT index was slightly below where it had been when the opening forecast was made. The company pointed towards good SMP prices and tightening global WMP supplies in its reasoning for the price increase. Since then, GDT prices have improved for powders and most other products, helping to support this decision.

Katherine Jack

Analyst - Dairy

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