Ahead of tomorrow’s Global Dairy Trade auction, New Zealand bank ASB has suggested that skimmed milk powder (SMP) will pace overall dairy prices by approximately 4-6%.
In its latest dairy futures outlook it expects whole milk powder (WMP) prices to be up by 2-4% at the auction.
Last week, WMP prices remained depressed with prices down between 1-3% since following the last auction on May 3.
#NZXfutures suggest SMP likely to pace overall dairy auction prices ca. 4%-6% higher o/nite Tue; WMP up by 2%-4% ^NP pic.twitter.com/AmnmZHjXua
— ASB Markets (@ASBMarkets) May 16, 2016
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Dairy product prices fell 1.4% at the latest Global Dairy Trade auction which took place on May 3. At the auction previous, on April 19, prices rose 3.8% with whole milk powder (WMP) rising 7.5%.
At the latest auction, only three products posted increases in prices – cheddar (+1.8%), rennet casein (+3.5%) and whole milk powder (+0.7%).
The butter index was down 5.5% as was the butter milk powder index by the same percentage. The skimmed milk powder index was down 3.6%.
ASB bank had suggested that the auction could post a rise and hinted that whole milk powder (WMP) could rise between 3-5%, however this was not the case following the Global Dairy Trade auction.
Global Milk Production Up 3.4% In January-February
With dairy prices remaining low, global milk production continues to increase with a 3.4% increase in January-February 2016, mainly due to strong production growth in the EU, according to the Milk Market Observatory’s (MMO) Economic Board.
EU milk collection was up by 5.2% in January-February, with percentage increases particularly strong in Ireland, Northern Ireland, Luxemburg and Belgium.
There was a 1.8% increase in US milk production in March, which was higher than expected, in light of the US Department of Agriculture (USDA) growth forecast for 2016 of 1.5%.
New Zealand production was also higher than expected in February (up 2%), but it is expected to end up slightly down for the season.
