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Latest GDT prices weaken on rising New Zealand milk production
Thursday, 3 June 2021
By Charlie Reeve
Milk production in New Zealand (NZ) has seen strong growth in recent months. Milk collections during April are reported to be up 12% compared to the same month last year, according to industry sources. Based on the first 11 months of the 2020/21 season, milk collections are up by 2.4% on last season.
Favourable weather conditions in the North Island of NZ has encouraged excellent grass growth, which has been behind this increase in milk production. The South Island weather conditions have been more adverse with dry conditions during the summer months, followed more recently with floods.
The strong production levels in April, combined with seasonally rising production as NZ moves towards its peak, is likely to be putting some pressure on global prices, as seen in at the latest Global Dairy Trade (GDT) event. However, it is worth noting, global dairy prices have been high so far in 2021 and although there’s a slight downwards turn at the latest GDT event they still remain relatively high compared to previous years.
The latest GDT event took place on 1 June and coincided with the start of the 2021/22 milk season in New Zealand. The overall GDT Index dropped back 0.9% compared to the previous trading event to average $4,128 USD/tonne. There were declines in all of the major product groups with the exception of Cheddar, as product volumes increased at the event. Butter had the most significant drop back declining by 5.4% on the previous event.
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