Dairy prices hit a fresh seven-year high, as tight milk supply boosted demand for New Zealand’s biggest export commodity. The overall index was up another 1.4 % to $US4290 per metric tonne in the latest overnight auction. The volume exceeded 33,000 metric tonnes for the first time this season, with 31,092 sold. The highlights of the auction:

  • Anhydrous milk fat up 3 % to $US6,668 per metric tonne
  • Butter – up 4.6% per cent $US5,791
  • Butter Milk up 2.9% $US3620
  • Cheddar up 1% to $US 5,220 although far less cheddar was sold at this auction compared to the last.
  • Lactose up 3.5% to $1,339
  • And the powders Skim Milk up 1.3% to $US 3,721
  • And Whole Milk 0.6% to $US 4,008 per metric tonne

And it seems demand is very global, with the market no longer heavily reliant on Chinese buyers to do all the heavy lifting. South East Asia the Middle East and Africa were all prominent in the auction. Fonterra expects to pay its farmer suppliers between $8.40 and $9 per kilogram of milk solids this season. The $8.70 per kgMS midpoint, which farmers are paid off, would be the highest level since Fonterra was formed in 2001 and would contribute more than $13.2 billion to the economy.