Dairy markets finely poised as markets ease

Dairy commodity prices eased again at Fonterra’s latest auction on Tuesday (4 January). On average, values fell by 0.7% against the previous fortnight’s sale and were 2.2% down on the month at US $3,654/t (£2,334/t).

Milk values also weakened at United Dairy Farmers’ first auction of 2012 supplies, down by 0.5p/litre on the month, to 28.51p/litre. However, that was still 1.5p/litre above the same time last year, making it a good start to the year, given the weaker euro and increasing production, said chief executive David Dobbin.

“Global milk supplies are surging, particularly in New Zealand, where supplies were 11% ahead of last year in October. Dairy markets are finely poised; the big question is whether Southern Hemisphere countries will sell out their 2011-12 output before the EU and US production ramps up in the spring.”

In the UK, commodity markets eased slightly in December, with skimmed milk powder down by £50/t to £2,100 and butter dropping by £150 to £3,000/t. This pushed DairyCo’s actual milk price equivalent down to 29.9p/litre – 1.2p down on the month but still 1.8p ahead of last year.

market report