The evening of 20 August, the price index for dairy products on the Global Dairy Trade auction was sustainable. The decline was slight – only 0.2%, writes Farmonline.
Despite the stable situation on the market, analysts have expressed concern over the rising tensions in global trade.
One of the largest banks of Australia, part of the “big four” banks, and is considered the second largest Bank in New Zealand Westpac NZ has declined from the initial forecast for the price per kg of new Zealand milk powder in 2019/2020 MG they will fall from 6.7$ 6.5$ per kilogram.
On Tuesday, prices for whole milk powder rose 2.1%, reaching 3100$ per ton. The price of popular English Cheddar cheese increased by 0.8%, but on the other “milk” has decreased. The above applies to butter (-3,4%) and anhydrous milk fat (-3.7 percent).
According to experts, prices on fatty dairy products were established on the lower than in 2017/2018 MG level. However, this statement does not apply to everything. Something prices have risen substantially. Compared to last August Cheddar rose by 10.7%, and nonfat dry milk by 27%. Futures contracts for whole milk powder (WMP) prevail, despite the experts ‘ forecasts on the decline.
Despite higher prices for some dairy products, experts do not exclude that in the future they will start to fall. The fall will cause the deterioration of relations between the U.S. and China over trade war. Previous predictions of its imminent end look implausible in the background of mutual sanctions by the parties. A trade war between the US and China will be delayed indefinitely. It will affect other market participants. Therefore, we cannot exclude falling of the prices for dairy products in the short term.
Before analysts expect modest demand in the dairy market in major regions-exporters. As a result, in Europe it rose slightly in the first half, in the United States remained the same, and have fallen in Australia. The price for whole milk powder has not affected the growth of production of new Zealand milk in the spring. Now the market situation is stable. The conditions of pastures in many parts of New Zealand favorable. They are fully consistent with this time of year. In 2019/2020 MG dairy farmers will try to repeat the success of the 2018/2019 MG in production.
Market demand fell due to the announcement Fonterra nonpayment of dividends for the season 2018/2019 MG and strengthening of environmental standards to limit the growth of livestock. On the background of this statement, Westpac NZ has predicted an increase in milk production by 0.5% compared to 2017/2018, the Bank has shown in his careful forecast. If the demand for dairy products from China will fall sharply, then the limited growth in supply will not be enough to curb the fall. Prices may fall more than previously expected.
The index of exports of dairy products increased due to the fall in the Australian dollar. It rose by 0.1 percentage point up to 216.6. The price of butter fell by 36$ 4,250 and$ per ton. Prices for nonfat dry milk (SMP), whole milk powder (WMP) Cheddar and remained unchanged.
As passed earlier, “КазахЗерно.kz” the Ministry of agriculture of the USA has published a new report on the forecast of supply and demand in the U.S. and the world for milk. In this lowered milk production for 2019/2020 MG because information on the reduction in the number of cows and a decrease in average milk yield per cow in the world.
For reference: Global Dairy Trade is a platform of online-auctions for commodity dairy products traded on the international market.