UPFRONT MARKET VIEW
INSIGHT
Commodity prices soar in March of the March 16 event as a result of the price rise at the March 2 event. The Co-op he March 2 Global Dairy added 11,500t of WMP over the next 12 Trade (GDT) event took months, with 3500t of that volume the entire industry by added to the March 16 event, and surprise, delivering an extra 7000 to the April and an incredible 15% jump May events. And, there was 200t in the index. This is the of skim milk powder added to largest increase in the GDT each event from March 16 to price index since September May 18. Fonterra also removed 2015. Whole milk powder 1000t of anhydrous milkfat from Amy Castleston. (WMP) prices soared 21% - the the March and April events and 1130t largest increase on the day – but of cheese – leaving just 80t of cheddar we also saw some significant increases in on offer at the March 16 GDT event. most other commodities on offer on the Prices did correct a bit at the March platform. 16 event, easing 3.8% overall. Price The rise at the March 2 GDT prompted movements were mixed by commodity, Fonterra to revise its milk price forecast but the fall in the index was led by a 6.2% up by 40 cents, with the new range now fall in WMP prices. Commodity prices $7.30-$7.90/kg MS, making the midpoint still remain high compared to historical $7.60/kg MS. Fonterra reaffirmed this milk averages. A bit of a fall in prices was price forecast when it released its interim expected at the March 16 event, after such results in mid-March. The NZX milk price a spectacular rise at the previous event and forecast at the time of writing remained at the extra milk powder volume. the top end of Fonterra’s range, sitting at Overall, commodity prices are still $7.88/kg MS. This forecast is dependent on expected to remain relatively high. At the commodity prices for the remainder of the time of writing, the NZX Dairy Derivatives season remaining at relatively high levels, market was indicating a fall in prices though there is some room for downside. over the coming months, particularly Fonterra also significantly adjusted its as New Zealand heads into the 2021offer volumes on the GDT platform ahead 22 dairy season. In saying this, prices
Words by: Amy Castleton
T
Milk production seems to have bounced back in most regions through March, with some better rainfall encouraging pasture growth. aren’t expected to fall dramatically, and a reasonable milk price still looks to be on the cards for next season. Milk production seems to have bounced back in most regions through March, with some better rainfall encouraging pasture growth. The NZX Pasture Growth Index shows that conditions dropped to a low in early March but have started to track back up and are forecast to continue improving over the remainder of the month. North Island production in particular is looking better than last season in several places, with the South Island being a bit more variable due to weather conditions. There is plenty of feed around, though demand for supplementary feed has been slow over the past few months. • Amy Castleton, senior dairy analyst at NZX Agri.
DAIRY COMMODITY PRICES 7000
US$/tonne
6000 5000 4000 3000 2000 1000 Jan 19
Jul 19 WMP
22
Jan20 SMP
Jul 20 AMF
Jan 21 BUTTER
Dairy Exporter | www.nzfarmlife.co.nz | April 2021
