GDT auction of the 01 Sep.-15: + 10.9% additional price increase - solid ground well done
After months of plummeting un of increased first Center are Aug. 15 at the recent global dairy trade auction the 01 Sep.-2015 the average prices for milk products again to + increased by 10.9%. The offer was again lower than at the previous auction. The expectations of further supply cuts of New Zealand milk production suggest that the decline of in milk prices to end is gone.
The price of the milk market is back in a rising trend as a result offer throttling and slight revival of in demand, even if the level far from multi-year average values removed is.
The best result achieved full cream milk powder + 12.1% on average of all delivery months compared to the previous auction. The clamping width ranges from spectacular 42.4% to the Oct. 15 delivery up 6.8% for the delivery in March 2016. This dairy product made the biggest impact on the overall result in a share of two thirds of the auction volume.
Skimmed-milk powder an average price increase of + 11,7%, in a span of + 16.9 reached % % in the Oct. 15 to + 8.7 in the March 16. A significant backlog in demand in a tight supply looming with two results in the milk powder.
Butterfat has trumped up in the prior action with high double-digit growth rates. The average results of + 11.7% can look but also this time. The delivery month Nov. 15 was only 7.5%, but the remaining months were all in the double-digit range between 14 to 15% increase in the previous auction.
Normal butter reached 84% fat at an average premium of rd. + 8.1% while the smallest success of the recent auction, where the month of Nov scored the lowest bid with + 3.5. The other delivery months did % consistently better with increases of + 13 to + 13.8.
The upcoming auctions must show whether the upward trend continues. The Milchsaison is seeking in New Zealand with the month of Oct. 15 her high point against. Milk deliveries to fall back in the northern hemisphere with the focus regions EU and United States. Low prices and a weather conditions impaired feed basis will be effective as the brake factors. The El Niño weather phenomenon could still provide dry periods in Australia and New Zealand.
New Zealand Ministry of agriculture forecasts a considerable decrease in the number of dairy cows from around 7 million to 5.6 million animals for the first time after more than 10 years of exclusive increase of the herds in the year 2016. The essential reason is the price differences between milk and beef. Beef and veal prices move for 1 year at the highest level, while milk prices experience a ruinous decline. Many New Zealand farmers use their pastures again increasingly for the suckler-cow to beef production.
A reduction of the dairy cow population has direct impact on the entire supply at a basic feed-oriented economic way without appreciable force feed usage.
For a sustainable trend reversal in milk prices the demand especially from China must increase significantly. Given the economic difficulties in the Kingdom of the middle and the multiple devaluation of the Chinese currency will need to Park even a prolonged period of patience.
You can not rely on Russia for the time being.
