Latest Fonterra Auction Gives Comfort for 2014 Milk Prices

IFA National Dairy Committee Chairman Sean O’Leary said this week’s Fonterra auction results (+1.4% weighted average price increase) showed continued significant price increases for the majority of dairy products, and a stabilisation in powder prices.

“Butter and cheddar prices both rose by over 10%, while whey protein concentrate went up 7.2% and casein 4.2%. Powder prices, which had been easing in recent auctions, have stabilised (SMP -0.5%, and WMP -0.1%). As product involved in this auction is for trade in the next 3 to 6 months, co-ops should be strongly encouraged to hold their milk prices at least past peak,” he said.

Commenting on the detailed auction results, Mr O’Leary said: “The continued rise in butter prices in the last few auctions, to a current level of US$4,657, is narrowing the price gap which had existed for most of 2013 between EU and global markets. As we progress towards the EU seasonal peak, this should help minimise potential EU butter price decreases”.

“Co-ops should take significant comfort from this development, and commit publicly to holding current milk price levels at least until after the June peak,” he concluded.