Dairy commodity auction points to higher prices in 2012

International dairy commodity values increased at Fonterra’s auction on Tuesday (15 November), for only the second time since 1 June.

The weighted average price at GlobalDairyTrade’s fortnightly auction rose by 2.6%, to US $3,617/t (£2,286/t) after four months of weakening trade. That was $95/t (£60/t) more than the same time last year. The auction sold 39,317t of products – 5% less than the previous sale but 26% more than last year’s equivalent.

All products showed greater interest in the forward months, with very little sold for December movement, and most sales made for January-April 2012. Across all contract periods, milk protein concentrate showed the greatest price rise, up by 11.3%.

Anhydrous milk fat increased by 8%, with Cheddar cheese up by 3.7%, butter milk powder by 3.6%, and whole milk powder up by 2.4%. Skimmed milk powder increased by 1.7% on average, with the greatest demand for May-July 2012 contracts. Rennet casein was the only product to record a drop in price, down by 9.7% on average.

Across all products, the May-July 2012 period showed the strongest increase, up by 3.4% on average.