Dairy prices recorded the most significant increase in four months as demand for products steadily rebounds. The average price surged by 4.2 percent at the overnight auction, reaching US$3571 per tonne, following a 2.3 percent gain in the preceding auction two weeks ago. Notably, the price of whole milk powder, a key determinant of payouts for local farmers, climbed by 3.4 percent to US$3463 per tonne. Additionally, prices for most other dairy products witnessed an uptick, with butter experiencing a notable rise of over 10 percent to US$6516 per tonne.
Most other dairy products, such as cheddar and skim milk powder, saw price increases. However, mozzarella prices declined. Enhanced demand and prices have led local dairy companies to raise projected payouts to an average midpoint of $7.50 per kilogram of milk solids. Rosalind Crickett, an analyst at NZX dairy, described the auction as witnessing “strong bidding demand.”
” The outcome of this auction exceeded the majority of expectations, as the NZX-SGX derivatives markets anticipated flat to bearish outcomes across the board,” she remarked. Crickett noted that the Middle East continued to lead as the primary purchaser of whole milk powder, while North Asia emerged as the leading bidder for skim milk powder, butter, anhydrous milk fat, and lactose.
“Given the persisting tensions in the Red Sea, resulting in prolonged shipping lead times and elevated costs, coupled with the off-season production in the Northern Hemisphere, it remains to be seen whether this purchasing trend will persist in the near future.”
