Global Dairy Trade: Double digit surge on milk market

The international dairy index surged overnight by a whopping 15 per cent overall — reaching a seven-year high.

The Global Dairy Trade index jumped by 15 per cent overnight. Picture: Zoe Phillips

INTERNATIONAL dairy prices skyrocketed by an astounding 15 per cent overnight, the biggest jump in the fortnightly average since the upward trend started in mid-November.

The double-digit bump in the Global Dairy Trade (GDT) index resulted in an average price of $US4231/MT ($5414/MT).

Last night’s bounce is the eighth consecutive increase in the average price and the eleventh out of the last twelve fortnightly auctions.

Fuelling the overall rise was the whole milk powder (WMP) index, which rocketed by 21 per cent to an average $US4364/MT ($5585) — the highest WMP figure since May 2014.

The butter index also rose by double digits — 13.7 per cent — to an average $US5826/MT ($7455) contributing to the overall spike.

Last month, Fonterra lifted its 2020-21 forecast farmgate milk price range in New Zealand by 20c/kg milk solids to between $6.90 and $7.50.

The move across the Tasman prompted fierce debate within the Australian dairy sector over stagnant farmgate prices, particularly in Victoria.

Both Bega and Burra Foods moved on their respective farmgate figures last week while Saputo and Fonterra Australia remain at $6.40/kg milk solids, a price locked in before the start of the 2020-21 season.

Bega now pays $6.50/kg milk solids for southern Victorian suppliers and $6.66/kg milk solids for northern Victoria suppliers.

Burra now similarly pays $6.50/kg milk solids to its suppliers on average.

MORE

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BURRA MOVES AT FARMGATE, CITING INTERNATIONAL RISE

Originally published as Global Dairy Trade: Double digit surge on milk market