Business Dairy
Global Dairy Trade damper for dairy market
The previous edition of the Global Dairy Trade gave the dairy market hope, but yesterday's Fonterra internet auction (April 21) is pushing the dairy market deeper and deeper.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
The index lost 4,2% to $2,836 per tonne, its lowest level in 14 months. The milk powders in particular performed poorly. Whole milk powder fell 3,9% to $2.707. The price of skimmed milk powder recorded a reduction of as much as 4,9% to $2.380. The price spurt that took place in the second half of 2019 has now almost been wiped out. GDT quotations have now become more in line with levels in Europe and the US.
All in all, the milk powder market is in a negative vacuum, now that oil prices worldwide have fallen to historically low levels. A barrel of Brent oil lost another 13% yesterday to just €17. A year ago, oil was still trading at more than four times as much.
Milk fat in the min
Bright spots on the GDT were cheddar (+1,9% to $4.480) and lactose (+12% to 1.078), although these are relatively small trade flows in terms of volume and therefore do not determine the overall picture. Especially because the milk fat also disappeared. AMF fell 7% to $4.083, while butter prices lost 3,6% to $4,117.
The result is even more reason to fear a lower milk price. In the run-up to the auction, organizer Fonterra already expressed gloomy views the prognosis for next season. The member dairy farmers of the New Zealand dairy cooperative were therefore called upon to be careful when making investments.