GDT auction results of Nov. 17, 2015 - an once again back-setter - 7.9%
The most recent global dairy trade auction has brought not the hoped-for recovery, but a further setback the average auction results-7.9%. Despite a 10% return of the handled quantities seems to be not sufficient demand, to create something more on the current price level on average.
In the run-up to the auction by the New Zealand dairy FONTERRA announced production cuts amounting to 5.5% for the current fiscal year have left apparently no impression on buyers. Rather, it is assumed that currently increase milk production in the highlight of the New Zealand season expect leaves enough dairy products, buying only what is necessary. Butter is the exception.
Faced with the most setback with 11% had whole milk powder . The results in each delivery month however that in the rear dates in 2nd quarter 2016 price pressure less pronounced than in the front months. Total whole milk powder has lost half of its previous price recovery and is back halfway from the bottom up to the 5-year average.
For skimmed milk powder was the-setter of back - 8.1% while less serious, but the obtained auction surcharges showed continuous price reductions. Skimmed milk powder prices will remain at a low level. This is true all over the world.
Butterfat listed average - 5.9%, with particularly unfavourable section the date of Jan. 16. Overall, it is however to determine that the fats already just below the 5-year average level.
Normal butter scored, on average, a positive result with + 5.6% and rising in the second half of the dates until may 2016. However, the deep setback at the previous auction, however, is to keep. However, the butter prices are close to the average.
The strong price spread between the milk fat and the milk powders is located on the high US butter prices that are almost twice as high than the competitors.
The cyclical upswing in milk prices is indeed visible, but the way is not always smooth upwards. Should New Zealand milk production continues to lag behind the previous line, is expected to price increases. Still, the EL Nino weather event not at its peak arrived and can be effective until March 2016. Drought on the New Zealand pastures quickly leads to loss of production. The use of feed and feed canned food to compensate is hardly practiced in New Zealand.
In the meantime, you should consider that international stocks are still not so far shrunk, that there is an urgent need to catch up.
