Lift in dairy prices
Prices for all dairy commodities raced ahead for the third auction in succession at Fonterra's Global Dairy Trade (GDT) online event.
This week the price index was up by 6% to US$3,174/ tonne after a 7.8% increase at the previous event.
Although prices in New Zealand are catching up fast, they still lag behind the butter price of $4,222/tonne in the US.
Contract prices for AMF (butteroil) at this auction were up by 11.8% to $3,530/tonne and prices showed a bigger increase for contracts as far forward as next March where the contract price for the premium product reaches $4,180/tonne, a 17.1% hike.
Prices for BMP (buttermilk powder) also increased by 15.8% to $3,091/tonne.
Overall, the contract prices of $3.211/tonne for skim milk powder (SMP) were 7.5% higher than the previous event but the surprising aspect of this sale was the fact that both the Arla and Dairy America SMP sold at this auction for higher prices than the Fonterra product.
There was 38,000 tonnes of whole milk powder (WMP) sold at this event.
This was 8,000 tonnes more than previously forecast but this did nothing to dent the 4.3% price increase, which brought the average price to $2,978/tonne. Lactose was also up by 5.2% to $2,090.
Prices for MPC70 (milk protein concentrate) were up by a massive 15.5% to $6,173/tonne, with Rennet Casein up by 10.1% to $7,825/tonne.
Quotes for all dairy commodities on the Dutch Dairy Board site were also higher again this week with butter up by €100 to €3,100/tonne, WMP by €70 to €2,870/tonne and SMP by €50 to €2,700/tonne.
The prices for butter and SMP products at this event would yield a milk price of 31c/l to Irish farmers at 3.3% protein and 3.6% fat, while the WMP would return a milk price of 26c/l on the same basis.
Butter and SMP prices in Europe would return 33.25c/l and WMP would yield 32.5c/l using the same criteria.
Irish milk processors have an obligation to pass on some of these price increases to their suppliers who have to deal with the cost implications of the worst weather and ground conditions since 1985.