Business Dairy
GDT: milk powder up, breaking trend for cheddar
After 4 auctions in a row with mostly red quotations, the Global Dairy Trade is improving this week. The recovery in milk powder prices can be seen as positive, although cheddar is struggling.
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The average price increased by 1,8% to $3,157 per tonne, mainly due to the higher quotations for milk powder. For example, skimmed milk powder increased by 2,5% to $2.799 per tonne, while the full variety rose by just 2% and thus passed the $3.000 per tonne mark. New Zealand has long benefited from good sales opportunities in Asia, especially for whole milk powder in China. Also the United States taking advantage of the hoarding Asian countries during the corona crisis.
Cheddar down
The price for cheddar was significantly less positive. The price fell 3,5% to $3,641 per tonne. The decline can be seen as a trend break. Since September, cheddar has made significant progress. This decline is not an isolated event, cheese and cheddar prices are also under pressure in Europe and the United States.
An important cause of this is a drop in demand due to the lockdowns. This is also reflected in the number of volumes traded (35.3000 tonnes), which was 7% below last year's level. The GDT may have risen slightly, but the result is not expected to cause a turnaround in Europe, where the dairy market has been feeling weak for a few weeks.
Milk price unchanged
Based on this week's GDT auction, the New Zealand bank ASB maintains the milk price forecast for the current season at $6,75 per milk solids (approximately 11,5 liters of milk). This is almost the same rate that dairy cooperative Fonterra foresees.