Dairy prices posted an eight month high increasing 4.2 % in the latest overnight auction. Overall prices and Whole Milk Powder prices have lifted 12% and 10%,
respectively since August with prices in both cases 30% or more above year ago levels and around 20% above their five- year average. Here’s the detail:

  • A rise of 4.2 % for Anhydrous milk fat to $US6,384 per metric tonne
  • Butter – up 4.7% per cent $US5,350
  • Butter mIlk down 3.8% $3,513
  • Cheddar surging a massive 14.1% to $US 5,058
  • Lactose up 1.6% at $1,272
  • Skim Milk Powder up by 6.6% to $US 3,627
  • Whole Milk Powder dow 2.7% to $US 3,921

Westpac Agri. Economist Nathan Penny says the ongoing weakness in global dairy production will continue to underpin global dairy prices. September production in NZ was down 4.0% compared to September 2020 and this weakness has continued through October. He says The strong result introduces some upside risk to Westpac’s farmgate milk price forecast of $8.50/kg. He says anything at this price level or above is a record high and makes it harder for Fonterra’s consumer businesses to afford the milk. The other factor is Fonterras limited processing capacity for its various products.